The Hindu Business Line : ‘States must be encouraged to adopt public-pvt partnership’

The Finance Minister, Mr P. Chidambaram, has urged the members of Parliamentary Consultative Committee attached to his Ministry to persuade the State Governments to mainstream public private partnership (PPP) in infrastructure development.

Addressing the Consultative Committee meeting here, Mr Chidambaram said that the States should take full benefits of the various schemes and initiatives of the Finance Ministry. He highlighted that many of the States have not caught up with the PPP idea and that most of the current PPP projects are confined to a few States only.

Mr Chidambaram suggested that help could be taken from a panel of 11 expert transaction advisors notified by the Finance Ministry. He said that PPP issue has been discussed in detail at the two national and four regional level conferences organised by the Ministry.

Infrastructure deficiencies

The Finance Minister said that the country’s infrastructure deficiencies have become more visible because of high growth and that the most visible indicators of overstretched infrastructure are India’s congested highways, airports and ports.

Mr Chidambaram said that the Government was actively pursuing PPPs to bridge the infrastructure deficit in the country.

He said that the appraisal mechanism for the PPP projects has been streamlined to ensure speedy appraisal of projects, eliminate delays, adopt international best practices and have uniformity in appraisal mechanism and guidelines.

Many projects

Since its constitution in January 2006, PPP Appraisal Committee (PPPAC) has granted in-principle/final approval to twenty-eight projects, with a total project cost of Rs 16,729.28 crore. Under the Viability Gap Funding Scheme so far, 23 proposals have been granted in-principle/final approval with a total project cost of Rs 10, 097.45 crore and an estimated viability gap funding of Rs 2,571.97 crore.

So far, term loan, amounting to Rs 12,487.0 crore, for 57 infrastructure projects (with a total project cost of Rs 90,612.53 crore) have been sanctioned, of which 42 (total project cost of Rs 45,409.31 crore; loan amounting to Rs 7,025 crore) are PPP projects, he added.

The Finance Minister also said that for providing financial support for quality project development activities to the States and the Central Ministries, a corpus fund titled ‘India Infrastructure Project Development Fund’ (IIPDF), with initial contribution of Rs 100 crore is being set up. It would be a revolving fund that would get replenished through the refund of ‘investment’ through success fee earned from successful bid projects, he added.