With the new government keen to push through infrastructure projects, the finance ministry has called a meeting to discuss ways to create an enabling environment for public -private partnerships.
“Over the last few years, PPP projects across sectors have not registered the kind of response that was earlier seen. It is not just a question of funds and approval but also creating the right regulatory regime for those implementing such projects,” said a government official.
Providing connectivity across the country through roads, railways and sea links is one of the main priorities for the NDA government. Listing out the government’s agenda, President Pranab Mukherjee had outlined plans on Monday to build a ‘Diamond Quadrilateral’ of high-speed trains, develop low cost airports in small towns and construct a ‘Sagar Mala’ project to connect ports to the hinterland.
Accordingly, the finance ministry has called a meeting of officials from all infrastructure ministries including roads, railways, shipping and ports as well as the Planning Commission to discuss the issue on Wednesday.
“The meeting will look at sector specific challenges as well as other issues that are hindering investors from participating in PPP projects,” said the official. With $1 trillion investments required in the infrastructure sector during the 12th Five-Year Plan period, the government was banking heavily on the private sector to finance the country’s gaping infrastructure deficit.
But private sector interest in constructing infrastructure projects through the PPP mode has progressively dwindled. While the National Highways Authority of India had started preferring the EPC (engineering-procurement-construction) contracts due to failed bids and poor response to PPP road projects, several other large projects such as the Mumbai Trans-Harbour Link have also moved to the EPC route where the responsibility of funding, getting approvals, among others, lies on the government.
Concerned by the lack of response from developers, the UPA government too had initiated a review of PPP projects and had also set up a Cabinet Committee on Investments to ensure timely implementation of core sector projects.