The Hindu Business Line : ‘PPP model needs fine-tuning’

With the Public Private Partnership model gaining acceptance with the private sector, there is a need to assess the long-term risk to provide comfort for the lending institutions and other stakeholders to pursue PPP as a viable business model for investment in infrastructure projects.

From an initial aversion to investing in infrastructure sector, private sector gained confidence with the availability of long-term financing from lending agencies, which however, need to stretch to 20 to 30-year tenure.

“Today 12 to 14 years lending for infrastructure projects under the PPP model has been commonly accepted. Term beyond this is slightly difficult,” said Mr Somak Ghosh, Group President, Corporate Finance& Development Banking, YES Bank.

Mr Ghosh said with a huge projected investment of $350 billion on infrastructure during the 11th Five Year Plan, a new policy framework should be evolved for risk mitigation for a longer tenure of 20 to 30 years finance mechanism.

Expressing their views on the model’s benefits in helping the economy achieving a sustained growth at 9 per cent to, other speakers also stressed on drawing the synergies of the government’s long reach and private sector’s efficiencies to utilize the PPP model.

Addressing a seminar organized jointly by YES Bank and the Bangalore Chamber of Commerce and Industry (BCIC), Mr Gaurav Gupta, Managing Director, Karnataka State Tourism Corporation and Special Secretary, Infrastructure Development said the state had taken several initiatives to strengthen the PPP model resulting in 86 projects worth Rs 95,000 crore were being pursued under the model.

The Bangalore International Airport was one such project. Several other proposals in the roads, railway, tourism and industrial infrastructure sectors were being implemented, he said.

Mr A. Ravindra, former Chief Secretary, Karnataka, said PPP should shed its shyness from looking at urban infrastructure projects alone and take a serious look at rural sectors, particularly in agriculture sector.

More Stories on : Infrastructure | Karnataka

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