Leading infrastructure players have pitched for a neutral regulator to look into all issues in public-private-partnership (PPP) projects across sectors. They highlighted the point to the Vijay Kelkar Committee that is looking into ‘revisiting and revitalising the PPP model of infrastructure development’.

Top Indian players are reluctant to participate in these projects and there are barely any foreign investors, said an industry player, who made a presentation before the committee. “What is required is a PPP model involving all stakeholders in the decision-making process. The element of risk in the business should not just rest with the private sector,” said another source. L&T, Reliance Infrastructure, GMR and GVK are the leading players in the segment.

“There are regulators specific to the infrastructure sector, but their work is restricted to looking into just one or two components, like tariffs in the case of power. What is required is a regulator that would look into the nuances of a contract as well and ensure quick decision-making,” he added.

Committee formed He said the “the biggest problem in the existing PPP is the last word ‘partnership’.

Despite putting in money and knowledge, a private player is treated as just a ‘contractor, not as an equal partner”.

In his 2015-16 budget speech, Finance Minister Arun Jaitley said the PPP mode of infrastructure development had to be revisited and revitalised, in which the major issue involved is rebalancing of risk. 

Consequently, the Government constituted the Kelkar committee, whose terms of reference included a review of the PPP policy, analysis of the risks involved and the existing framework of risk-sharing between the project developer and the government.

The committee, which is expected to submit its report soon, is understood to have taken individual presentations of key infrastructure players.

Some of the players have pointed out that it is unfair to hold them responsible for delays in project implementation, if the reasons for delay are beyond their control.

For instance, if the delay is because of land acquisition, environment clearances or any such regulatory approvals then the developer should not be held responsible.

“Delay, of course, is a culmination of various things so it could be either land or right-of-way, or utility shifting or environment clearances. Or it could be inter-ministerial squabbling or change of law . In such circumstances it is not fair to hold only the private player responsible,” he pointed out.

It is clear that the government is concerned, but to make PPP a success it has to do rebalancing of the risk -- share the risk between the partners, another player said, adding that “one suggestion made is that contracts and commitments made by the public sector partner should be hardwired in black and white, though we agree that making contracts open to renegotiations will be tough.”

Related Topics
comment COMMENT NOW