Experts note PPP model on building highways

Indian authorities need to modify its Public Private Partnership (PPP) model, ensuring transparency in contractual terms and long-term dividends from contracts for investors to venture into other projects.

Investors need clarity and consistency in regulations and rules for implementing projects which banks are backing on the basis of long-term contracts, stretched over 25-30 years.

Underlining the importance of fixed terms, experts support PPP model for the massive development being undertaken in India.

The PPP has been a successful model for building roads and highways as well as some mega power plants and ambitious water projects.

But it needs to be revisited and modified as per international standards, according to Sanjiv Nanda, Member, Board of Trustee of the India Think Council (ITC).

He pointed out that India needs a lot of investments for infrastructure and PPP seems the right way to attract foreign investments and contractors, which will bring in razor sharp competition and introduce efficiency of highest standards, helping implement projects cost effectively.

A transparent PPP model would give better return to investors, stressed Nanda at the World Bank Group-Asia Competitiveness Institute’s annual conference held in Singapore 23-24 Nov 2017.

PPP model has succeeded on National Highway Authority of India as well as some power and port projects.

But Nanda wants to see more done in engaging the private sector.

Elaborated on the need to make PPP a more effective model, Dr Cledan Mandri Perrott, Head of Infrastructure, Finance and PPP at the World Bank, on the suitability of PPP models in India.

“India’s PPP market has been picking up over the past three to five years,” noted Dr Perrot, citing the model being used in some contracts on the ambitious programme to clean up Ganga River.

But there needs to be consistent policy support for the model as assurances to investors and contractors. For now, the PPP model is bias. It favours Indian contractors in implementing projects.

The model draws full commitment from its participants to deliver projects efficiently, cost effectively and on deadlines as it involves their investments, resources and responsibility to stake holders.

Foreign contractors’ participation in Indian projects would stimulate the highest level of competition, resulting in higher efficiency on project implementation and lower costs, according to Dr Perrott.

Such commitments and policy consistency with assurance from government will convince banks and international financial institutions to continue funding projects, some of which are just too huge to be funded through public budget. fii-news.com