The Hindu Business Line : Call to promote PPP in infrastructure projects

Kochi, Oct. 5 Speakers at a workshop on public-private partnership have stressed the need to promote PPP as the preferred mode for implementation of infrastructure projects.

Addressing the conference, jointly organised by the Confederation of Indian Industry (CII) and the Department of Economic Affairs, Union Ministry of Finance, Mr Arvind Mayaram, Joint Secretary, pointed out that though the PPP mode was encouraging, it is limited only to few sectors.

He said that weakness in enabling policy and regulatory framework in most of the infrastructure sectors continued to be a constraint. There was a need to make sector policies and regulations PPP-friendly.

A large number of projects were in the States and without the active participation of the States, it would not be possible to achieve the desired results, he said.

Mr Mayaram also spoke about the various schemes to finance infrastructure projects and especially on the Finance Ministry’s scheme of Viability Gap Funding.

The Ministry of Finance has also encouraged four credit rating companies ICRA, Crisil, Fitch and CARE to rate infrastructure projects and, also the SPVs. He said that the limiting factor to take PPP process forward was capacity limitation in public institutions to manage and inadequate capacity in the private sector.

Delivering the keynote address, Mr K. Jose Cyriac, Additional Chief Secretary (Finance), Kerala, highlighted the issues involved in PPP projects at the State level. He spoke at length, on project management capabilities in the Government sector and the related issues such as land acquisition, financial structuring, documentation etc.

Mr Rohit Modi, Chief Executive, L&T Infrastructure Development Projects Ltd, said that success in PPP project was closely linked with a strong champion within the government.

He also projected strong growth for the next 20 years – thanks to broadening of PPP, deepening of markets and demographic profile. He, however, cautioned against disputes arising out of tariff revisions and called for the creation of an independent tariff regulator.

Earlier in his welcome address, Mr Umang Patodia, Chairman, CII Kerala State Council, said that for PPPs to be successful, the Central and State Governments would have to create policy frameworks for private investment, develop political will and mechanism to collect user charges and develop long-term debt and equity financing mechanisms.

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