UP topped in roads, bridges projects under PPP mode

UP is followed by Maharashtra, Gujarat, Karnataka and TN; the five states together make up half the Rs 6,70,000 cr investment under PPP

Uttar Pradesh has accounted for the highest number of projects under the public private partnership (PPP) mode.

UP is followed by Maharashtra, Gujarat, Karnataka and Tamil Nadu. The five states together comprise half of the Rs 6,70,000 crore investment under PPP, an ASSOCHAM study has noted.

The study, which analysed data up to September 2015, pointed out a total of 1,191 projects under PPP (public-private partnership) with 67 per cent pertaining to roads and bridges, while 12 per cent were accounted for by ports and about six per cent in energy.

However, other areas with yawning gaps in infrastructure had not been too attractive under PPP, such as water sanitation, education, healthcare, railway tracks and cold chains.

"In the last two decades, the private sector has invested nearly 300 billion US dollars in infrastructure, which is praise-worthy. However, PPP has taken a backseat temporarily because several projects faced delays in getting multiple permissions, while others got stuck due to disputes resulting in time and cost overruns", ASSOCHAM president Sunil Kanoria said.

In terms of state-wise valuation, UP scored maximum investment worth over Rs 99,000 crore , accounting for 14.8 percent of total investment in 21 states under PPP. Mahrashtra came second with 12.1 percent and Gujarat third with 10 percent share. The top five states accounted for 50 per cent of total PPP projects in India.

Other states which have realised investments under PPP included Haryana, Madhya Pradesh, Andhra Pradesh, Odisha, West Bengal , Rajasthan, Telangana, Kerala, Bihar, Himachal Pradesh, Chhattisgarh, Jammu and Kashmir, Punjab, Jharkhand, Assam and Uttarkhand.

While the PPP model has proved successful in certain sectors and states reaching a state of inflexion, different problems have cropped up in the absence of clear institutional mechanism for negotiating a good partnership model, which could stand the test of time, the study noted.

It mentioned issues like flawed risk sharing, inappropriate business models and fiscal uncertainties had led to development of skewed qualification criteria.

The paper showed a major chunk of projects (478) worth Rs 3,30,000 crore accounting for 49 percent of total value of work done under PPP, were under the construction stage. Of these, roads and bridges sector alone accounted for 72 per cent share.

Common infrastructure for industry (SEZ) and ports, accounted for 9.4 percent and 8.2 percent share respectively.

The sectors which had not taken off well under PPP include tourism, airports (barring Delhi, Mumbai, Hyderabad, Bengaluru), healthcare, education, and railway tracks.

"It could possibly be due to the lack of attractiveness of the PPP model in these sectors. The private sector does not participate in less lucrative projects", the paper pointed out.