Hospitals to flyovers: Delhi BJP govt has a new plan to develop big infra projects

“Currently, departments face funding problems in executing big projects that solely use public funds. Due to this, several projects get delayed… Thus, the government is planning to implement high-cost projects, especially capital projects, through the PPP model,” said a senior PWD official.

Officials explained that the PPP model is often adopted to develop projects in transport, health, education and water sectors to construct flyovers, bridges, office complexes, hospitals, educational institutions, and schools, among others.

“Under this model, the government hires a private company and enters into a contract with it. It hands over land parcels to the company, which implements the projects and maintains it. The company generates revenue through payment of user charges by commercialising spaces available, like through advertisements, by setting up petrol pumps, collecting toll tax, and leasing out land to shops,” said the official.

Officials said the National Highway Authority of India has successfully implemented some highway and expressway projects through the PPP model.

“On similar lines, the PWD has been asked to come up with a proposal for implementing all big budget projects through the PPP model… So, projects on flyovers, underpasses, hospitals or schools, which cost over Rs 500 crore, will be executed through this model… The budget has not been set, it can be for over Rs 100 crore also, but this model is for developing high-cost projects only…,” the official said.

“…The plan is at an initial stage but the contract period between the government and private sector is likely to be for 30 years… Once the proposal is ready, it will be sent to the Cabinet. Then a transaction advisor or consultant will be appointed for analysing and deciding technical, financial and legal modalities,” the official added.

Maintaining that a project to build 11 new hospitals in Delhi — taken up for construction in 2020 and 2021 — has been delayed due to non-availability of funds, officials said the government requires Rs 9,000-10,000 crore for this. While work on the project had started during the pandemic, due to delays, the cost has escalated by 50%, officials added.

They further said the government has to follow a cap while sanctioning public funds for developmental projects. “So, the PPP model, we believe, will benefit the people, the government, help deliver projects in time… avoid cost escalation and corruption,” said an official.

Another senior official said the Transport department is also leasing out its spaces on a PPP model to generate revenue.

Officials said, for instance, the Delhi Transport Corporation is implementing AI-based water cooler projects at bus stops on a PPP model, where the private company it has hired will install water ATMs. In return, the company will use the space for advertisements.

Similarly, the government is using the PPP model to execute projects like the installation of small sewage treatment plants on drains, with the private companies using these plants to advertise.