Tuesday, October 31, 2006

Role of PPP in infrastructure development

PPP (Public Private Participation) framework is simply the securing of public outcomes through contractual arrangement involving multiple stakeholders outside Government.

It enables the Government to leverage the infrastructure projects by a factor of 10 times. That is for every one rupee of investment the government comes up with, the PPP arrangement could mobilize about Rs. 10 for a project.

But PPP entails thorough design engineering, assessing its financial viability, contractual framework, project financing, environmental and social assessments etc. In the absence thoroughness, the government will find it difficult to support the project, the bidders will add hefty risk premia and financing agencies will the project un-bankable.

PPP is a sustainable and proven method for government to accelerate the provision of infrastructure services in our country.

Infrastructure investments envisaged in the country:
Highways 1,72,000 cr by 2012
Airports 40,000 cr by 2010
Ports 50,000 cr by 2012
Energy 5,40,000 cr by 2012