Pegging the stuck liquidity with government bodies at Rs 1.25 lakh crore, industry body CII has sought setting up a ‘Renegotiation Commission’ to revive private sector investment in infrastructure.
It has also pressed for introduction of Public Utilities Dispute Resolution Bill in Parliament besides implementation of Kelkar Committee report.
“Right now there is a downplay of sentiment on PPP and public expenditure on infra … There is huge stuck liquidity with government… Good guesstimate today is it ranges from a figure of Rs 75,000 crore to Rs 1.25 lakh crore,” Chairman, CII National Committee on Infrastructure & PPP, Vinayak Chatterjee said.
He was briefing media after the first meeting of the committee.
“The key issue that we discussed was how to take private sector sentiment up again for enthusiasm-led investment in the infrastructure sector,” he added.
Seeking urgent intervention from the government, Chatterjee said most of the liquidity was stuck in roads and power sector with the government, and include disputed amounts as well as the bills not paid by the government.
The key expectation of the private sector is implementation of key recommendations of Kelkar Committee report that has provided solutions for a large number of problems including need for dispute mechanism resolution.
“All that needs to be set right away because you cannot wish away private sector. The first budget of the current Finance Minister on July 14, 2014 saw that Rs 500 crore was allocated for 3P India.
“It was a clear indication by the NDA government as soon as it came to power but government is midway in its tenure and urgent steps are needed now,” he said.
Dispute resolution mechanism can solve many of the problems that the private sector is battling with, he said.
Chatterjee said stuck liquidity is astronomically large and when cleared, will pump in a huge quantum of money.
He said ‘Renegotiation Commission’ should have a quasi judicial structure with representation from stakeholders as well as civil society besides retired judges that will look into the “existing basket of stressed projects and give dispensation”.
This will be a massive signal to domestic and foreign investors for reviving investment.
With inadequate infrastructure choking economic growth, the Kelkar Committee has suggested easier funding of projects and a dispute resolution tribunal in its report.
The eight-member Vijay Kelkar Committee has also suggested setting up of an Infrastructure PPP Project Review Committee (IPRC) to deal with the problems being faced by such projects.