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— Kamal Narang

The Union Finance Minister, Mr P. Chidambaram, with the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, at the conference of Chief Secretaries on public private partnerships, in the Capital on Saturday.

Our Bureau

New Delhi, July 21

The Union Finance Minister, Mr P. Chidambaram, said on Saturday that a project development facility with initial corpus of Rs 100 crore was being set up to provide assistance to State governments in public private partnership (PPP) projects.

It would be a revolving fund that would be used to contribute, in the form of interest free loans, up to 75 per cent of the project development costs incurred by the States for the PPP projects.

Inaugurating a conference of Chief Secretaries on PPPs, Mr Chidambaram also came down on the State governments for not having an adequate pipeline of bankable and implementable infrastructure projects.

“Today money is not the problem. There is money. But the problem is we do not have enough projects”, he said.

At present, 224 PPP projects in infrastructure sectors at an estimated project cost of Rs 69,893 crore are under implementation in the country. About 76 PPP projects in various infrastructure sectors at an estimated project cost of Rs 34,724 crore are in the pipeline, official sources said.

Stating that large private funds are looking at India with interest, the Finance Minister said that initiatives on the lines of ‘India Infrastructure Financing Initiative’ (took off in February this year) are waiting to be launched in the country. He also pointed out that the Government has already announced intent to examine in consultation with RBI the use of forex reserves for infrastructure financing.

“This will make available an additional $5 billion annually for infrastructure. Given the kind of money that is available and preparatory work that has been done, given the promise of Viability Gap Funding, given the support for project development cost, I wonder why there is not adequate number of projects,” he said.

Stating that quality of project design was poor and quality of execution was poorer, Mr Chidambaram said that this was one of the reasons why infrastructure projects completed in the country do not measure up to the requirements of the economy.

He also announced that the Finance Ministry would soon notify a panel of transaction advisors for PPP projects. States could utilise the services of these transaction advisors. Already 11 firms have been short-listed for this purpose after technical qualifications, a Finance Ministry official said.

Mr Chidambaram said that the Finance Ministry had in fiscal 2006-07 received 25 proposals for viability gap funding (VGF) from Madhya Pradesh, Gujarat, Maharashtra, Punjab, Andhra Pradesh, Rajasthan, Kerala, Karnataka and West Bengal. Out of the 25 proposals received, 18 have been given in-principle approval so far. This would entail VGF of Rs 2,268 crore. These proposals cover highways, ports, mass rapid transport projects, solid waste disposal and railway projects.

More Stories on : Infrastructure | States

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