Public Private Partnerships (PPPs) is an effective tool for
bringing private sector efficiencies in creation of economic and social
infrastructure assets and for delivery of quality public services. The extent
of private sector participation in creation of infrastructure, especially
through PPP, has shown a promising increase in the recent years. As on January
2012, there were 881 PPP projects with Total Project Cost of Rs. 543,045 crore
as compared to over 700 projects with TPC of Rs.371,239 crore by March 2011.
These projects are at different stages of implementation i.e. under bidding,
construction and operational stages. The broad sectors encouraged under the PPP
framework are Highways, Railways, Ports, Airports, Power and Urban
Infrastructure etc.
PPP Projects Approved by the PPPAC
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. The appraisal mechanism notified includes setting up of the Public
Private Partnership Appraisal Committee (PPPAC) responsible for the
appraisal of PPP projects in the Central Sector. Since its constitution in
January 2006, PPPAC has granted approval to 223 projects, with a total project
cost of Rs. 212,819.50 crore.
Standardized bidding and contractual documents have
been notified. These include model Request for Qualification (RFQ);
Request for Proposal (RFP) and RFP for technical consultants; Model Concession
Agreements (MCAs) for different sectors including Highways (both National and
State Highways), Ports, Urban Transport (Metro), Power sectors and Manuals of
Standards & Specifications have been developed and standardized. Further,
Project Sponsors are encouraged toward projects through a transparent open
competitive bidding process, which leads to greater transparency and
consistency to the bid process and terms of contract.
Sectoral Distribution of PPP Projects
The
maximum number of PPP projects have been undertaken
in the Road sector with 447 projects, constituting 51.6% of the total
projects. This was followed by Urban Development sector with 177
projects (22.4%), Energy sector with 77 projects (8.9%), Ports with
62 projects (7.2%) and the Tourism sector with 55 projects (6.4%). 225
projects have been completed whereas 410 are under various stages of
construction and 184 under bidding stage and the remaining in other various
stages. State-wise, Karnataka had the maximum of 105 projects with total cost of
Rs. 44,459.85 crore under PPP followed by Andhra Pradesh 98 projects with
project cost of Rs. 67,696.31 crore, Madhya Pradesh 86 projects (Rs.
14,928.7 crore), Maharashtra 76 projects (Rs. 45,916.34 crore), Gujarat 72
projects (Rs. 45,315.02 crore), Rajasthan 65 projects (Rs. 16,479.5 crores),
Tamil Nadu 50 projects (Rs. 21,491.04 crores), Haryana 35 projects (Rs.
67,840.57 crore), West Bengal 34 projects (Rs. 6,849.8 crore) and Orissa (Rs.
22,652.88 crore), Kerala (Rs. 22,281.54 crores) and Punjab (Rs. 4,653.7 crores)
with 32 projects each.
Viability Gap Funding Scheme
A unique characteristic of infrastructure projects is that
the positive externalities caused by projects cannot be captured by project
revenues alone. Hence, a project may be economically essential but commercially
unviable. Such projects, which are marginally viable or unviable, can be made
financially attractive through a grant. Viability Gap Funding (VGF) Scheme was
devised for Financial Support to PPPs in Infrastructure. It provides VGF
support to PPP projects up to 20 per cent of the Total Project Cost (TPC). So
far, 131 projects have been granted approval with TPC of Rs. 67,237.47 crore
and VGF support of Rs. 13,077.28 crore. An amount of Rs. 617.00 crore has been
disbursed as Viability Gap Funding (VGF) under the Scheme for Financial Support
to PPPs in Infrastructure.
The following sub-sectors have been included in the list of
sectors eligible for VGF support under the Scheme for Financial Support to
Public Private Partnerships (PPPs) in Infrastructure i.e. Viability Gap Funding
Scheme.
· “Capital
investment in the creation of modern storage capacity including cold chains and
post-harvest storage” vide Department of Economic Affairs (DEA) Notification
dated March 17, 2011.
· “Education,
health and skill development, without annuity provision” vide DEA Notification
dated May 4, 2011.
· “Infrastructure
projects in Special Economic Zones and internal infrastructure in National
Invest and Manufacturing Zones” vide Notification dated February 2, 2012.
· “Oil/Gas/Liquefied
Natural Gas (LNG) storage facility (includes city gas distribution network);
Oil and Gas pipelines (includes city gas distribution network); Irrigation
(dams, channels, embankments etc.); Telecommunications (fixed Network)
(includes optic fibre/wire/cable networks which provide broadband/internet);
Telecommunication towers; Terminal markets; Common infrastructure in
agriculture markets; and Soil testing laborites” vide Notification dated May
24, 2012.
Scope of Viability Gap Funding (VGF) scheme to support PPP
projects in infrastructure has also been extended to attract private
investment. The Delhi Mumbai Industrial Corridor (DMIC) is being developed on
either side along the alignment of the Western Dedicated Rail Freight Corridor
with Central assistance of Rs. 18,500 crore spread over a period of 5 years.
Projects Approved under India Infrastructure Project
Development Fund (IIPDF)
The IIPDF assists projects that closely support the best
practices in PPP project identification and preparation. The IIPDF supports up
to 75% of the project development expenses. So far, 51 projects have been
approved with an IIPDF assistance of Rs. 64.51 crore.
National PPP Capacity Building Programme
To intensify and deepen the capacity building of public
functionaries at the State and municipal level and to integrate the capacity
building programme on PPPs in the ongoing programmes at the State level, a
comprehensive National PPP Capacity Building Programme has been developed by Department
of Economic Affairs (DEA), which has been rolled out at the State level in
collaboration with KfW German Development Bank. Under it, eight different
programmes have been conducted and 155 Trainers of Trainers (ToTs) have been
covered. 15 States and two Central Training Institutes viz. Indian Maritime
University and Lal Bahadur Shastri National Academy of Administration have
rolled out training programmes on PPPs and have trained over 700 public
functionaries who deal with PPPs in their domain.
National PPP Policy and Rules
Pursuant to the announcement by the Finance Minister in the
Budget Speech for the year 2011-12 to come up with a “Comprehensive Policy on
PPPs, DEAhas prepared the draft ‘National Public Private Partnership
Policy’ which is under finalization. Further, pursuant to the recommendations
of the Committee on Public Procurement, and to ensure that the PPP projects are
procured and implemented by following laid down process and observing
principles of transparency, competitive bid process, affordability and value
for money, the draft ‘PPP Rules’ have been prepared. These are
undergoing extensive consultation process at the Central and State Governments
level before their finalization.
Online
Database
An online database on PPP projects www.pppindiadatabase.com and
the website www.pppinindia.com in
the country have been developed. The purpose of the website is to provide
comprehensive and current information on the status and extent of PPP
initiatives in India at the central, state and sectoral level. The potential
use of PPPs in e-governance, health and education sectors remains largely
untapped across India as a whole, though of late there have been some
activities shaping in these sectors.
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