The Hindu Business Line : Infrastructure projects: Not dime a dozen

It is no secret that substituting for, rather than supplementing, Government resources is now the main attraction for the Government in taking the public-partnership route in the construction of infrastructural projects.

The terms and tenures of build-operate-transfer projects are designed to yield a sufficient margin of profits to the private `partners' to make it worthwhile for them to make large offers for the award of contracts to them. Many of the largest infrastructure projects are now awarded to the highest bidder rather than to the lowest tenderer.

As shown in the accompanying graphic, the total cost of the 86 infrastructural projects taken up so far under public-private partnerships is about Rs 34,000 crore. Sixyt-four of the 86 projects awarded, under construction or completed, relate to roads and bridges. The average cost of such a project is, however, only Rs 193 crore, a tad below the Rs 197 crore spent on each of the two rail projects. It is a different matter that the total outlay on roads and bridges, at Rs 12,200 crore, is second only to the Rs 18,700 crore that is being invested in upgrading/constructing 8 ports.

Interestingly, the average seaport costs two-and-a half times the cost of an average airport; the two airport contracts that have been awarded cost less than Rs 1,000 crore each. Ports, on the other hand, averaged Rs 2,400 crore.