While public private partnership projects have taken off smoothly on a national level, Finance Minister P Chidambaram has expressed concern that many of the state governments have yet to embrace the PPP idea, with most of the projects being confined to some states only. As such, the minister has urged the members of the parliamentary consultative committee attached to his ministry to persuade state governments to mainstream PPPs in infrastructure development and take advantage of various schemes being offered by the ministry. Chidambaram said that infrastructure deficiencies in the country have become more visible as a result of a high economic growth rate. Traffic at ports has grown at a 13 per cent rate, air passenger movement at 25 per cent and air cargo at 10 per cent. To meet the Eleventh Five Year Plan (2007-12) growth requirements, 40,000 km of highways need to be developed by 2012 and the present capacity of 737 million tones (mt) at ports has to be doubled. With the Deepak Parekh report projecting an investment of $475 billion in infrastructure over the next five years, it is necessary to bring in private partnership into the sector. Chidambaram said that states should avail of initiatives like the Viability Gap Funding (VGF) and the Public Private Partnership Appraisal Committee (PPPAC). He added that since its constitution in January 2006, the PPPAC has granted in-principle or final approval to 28 projects, with a total project cost of Rs 16, 729.28 crore.Chidambaram noted that the country needs to step up investment in infrastructure and raise it to 8 per cent of GDP from 4.6 per cent to sustain a growth rate of 9 per cent during the eleventh plan. In addition to freeing government resources to expand investments in other sectors, he said, PPPs bring in private sector expertise and efficiencies in operation and maintenance, leading to increase in the quality of public services.The minister further said that the government has set up the India Infrastructure Project Development Fund (IIPDF) with an initial corpus of Rs 100 crore to provide financial support to developmental activities in the states. IIPDF, he said, would be a revolving fund that would get replenished through the refund of “investment” through success fee earned from successful bid projects.
