Govt developing flexible model to boost infrastructure: Mayaram

Nitin Gadkari says no road projects without 80% land acquisition

3P India, the proposed public-private institution of the Union government, will look into issues relating to regulation, finance structure and management of contracts, Finance Secretary Arvind Mayaram said here on Wednesday. He added the framework for the public-private partnership (PPP) has to be formulated in such a manner to allow flexibility because contracts are spread over 20-25 years.

3P India would help build capacity, both within the government and the private sector, he said at India PPP summit organised by industry body Ficci. As of March 31, 2013,  693 projects with an investment of Rs 1,61,400 crore had been completed, while 794 projects with investment of Rs 4,68,900 crore were at the implementation stage and another 1,076 projects worth Rs 5,92,100 crore were in the pipeline.

The finance secretary also called for the definition of a “stressed” project, reasons behind projects getting stuck, and a methodology for stress assessment and risk apportionment.

3P India will look at issues related to regulation, financing structures, stress in projects, management of contracts over a period of time, and issues related to capacity building in public as well as private sector, Mayaram said.

In his Budget speech, Finance Minister Arun Jaitley had proposed the setting up of an institution to provide support to mainstream PPPs called 3P India with a corpus of Rs 500 crore. “It will be a unique and powerful institution, which will rejuvenate the entire universe of PPP, which seems to be slowing down at the moment,” said Mayaram.

In the road and highways sector, after bidding out many projects, the government is finding it hard to attract private players. Many bid-out projects have now been stuck due to various issues related to environment and forest clearances, land acquisition, among others.

According to a report by Ernst & Young, the private sector’s share in infrastructure projects has increased from 22 per cent in the 10th five-year Plan to 37 per cent in the 11th Plan and is expected to rise to 48 per cent in the 12th Plan.

PPP in India witnessed tremendous growth in the last decade because of the thrust provided by the government to infrastructure development in the 10th and 11th five-year Plan, the report added.

In the same summit, road, transport and shipping minister Nitin Gadkari said he would sort all issues related to stuck road projects by August 15 and no road projects would be bid out without acquiring 80 per cent of the land.

About 300 projects are being readied with all clearances, which will be bid out in next five to 10 years, the minister said. “DPR (detailed project reports) for these projects will be prepared in advance. Time is the most important concept in infrastructure and business. Delays cost the country Rs 15 crore a day. Files are kept pending for three months to one-and-half-years. I have asked highways officials to fast-track decision and requested the prime minister to issue directions to all officials.”