The Economic Times 02.09.2013
Planning Commission to come up with cabinet note next month for PPP
In a move that will revive the languishing public private partnership (PPP) projects in the country, Planning Commission will come up with a Cabinet note next month, clarifying the existing PPP framework.
NEW DELHI: In a move that will revive the languishing public private partnership (PPP) projects in the country, Planning Commission
will come up with a Cabinet note next month, clarifying the existing
PPP framework. This would include clarity on approvals needed for such
projects, the scope of renegotiation in such projects and the available
exit option for developers of these projects.
Revival of PPP projects in the country has become extremely essential after several big players withdrew from such projects this year, citing lack of clarity in the model concession agreements. This had happened at a time when government is expecting at least 50% investment of the $1 trillion estimated for infrastructure development in the country from private players during the 12th five year plan (2012-17 ).
This year GMR and GVK had walked out of mega-highway projects, collectively worth Rs 10,700 crore, with the National Highway Authority of India while most recently Reliance Infrastructure had pulled out of the Rs 5,800 crore Airport Express Line of the Delhi Metro.
Besides, there are problems brewing up at the Gurgaon Expressway while the big ultra mega power projects in the country by Tata PowerBSE -1.78 % and Reliance PowerBSE 3.03 % are struggling to transform their imported coalbased projects into profit-making ventures on account of changes in input costs. Hence, to arrive at a consensus with stakeholders, Planning Commission Deputy Chairman Montek Singh Ahluwalia, on Friday, held a meeting with secretaries of infrastructure ministries to discuss the note on PPP projects.
"This was a first review meeting about PPP projects. Prime Minister has asked planning commission to come up with an assessment of PPP programmes, problems associated with them and suggestions to address these issues," Ahluwalia told reporters after the meeting. "We had a draft paper which was discussed with all secretaries. This will now be revised to incorporate their views after which we will discuss it with finance ministry before going to Cabinet," he added.
The meeting was attended by economic affairs secretary Arvind Mayaram and road transport and highways secretary Vijay Chhibber along with representatives power, coal, civil aviation and urban development ministry. Though private sector participation in infrastructure projects has grown substantially from 10% in the 10th Plan period to 37% during the 11th plan period, government feels it will be difficult to attract the estimated 50% of the $1trillion investment in infrastructure in the country during the 12th plan period from private players unless these issues are resolved.
Revival of PPP projects in the country has become extremely essential after several big players withdrew from such projects this year, citing lack of clarity in the model concession agreements. This had happened at a time when government is expecting at least 50% investment of the $1 trillion estimated for infrastructure development in the country from private players during the 12th five year plan (2012-17 ).
This year GMR and GVK had walked out of mega-highway projects, collectively worth Rs 10,700 crore, with the National Highway Authority of India while most recently Reliance Infrastructure had pulled out of the Rs 5,800 crore Airport Express Line of the Delhi Metro.
Besides, there are problems brewing up at the Gurgaon Expressway while the big ultra mega power projects in the country by Tata PowerBSE -1.78 % and Reliance PowerBSE 3.03 % are struggling to transform their imported coalbased projects into profit-making ventures on account of changes in input costs. Hence, to arrive at a consensus with stakeholders, Planning Commission Deputy Chairman Montek Singh Ahluwalia, on Friday, held a meeting with secretaries of infrastructure ministries to discuss the note on PPP projects.
"This was a first review meeting about PPP projects. Prime Minister has asked planning commission to come up with an assessment of PPP programmes, problems associated with them and suggestions to address these issues," Ahluwalia told reporters after the meeting. "We had a draft paper which was discussed with all secretaries. This will now be revised to incorporate their views after which we will discuss it with finance ministry before going to Cabinet," he added.
The meeting was attended by economic affairs secretary Arvind Mayaram and road transport and highways secretary Vijay Chhibber along with representatives power, coal, civil aviation and urban development ministry. Though private sector participation in infrastructure projects has grown substantially from 10% in the 10th Plan period to 37% during the 11th plan period, government feels it will be difficult to attract the estimated 50% of the $1trillion investment in infrastructure in the country during the 12th plan period from private players unless these issues are resolved.
