PPP and Infrastructure ================== The performance of PPP in the past is not very encouraging and the Budget has not come out with anything concrete to dtreamline the PPPin this sector. McKinsey has come out with a good report on India’s infrastructure. As per the Report India requires infrastructure investments of UD$ 500 billion is in transport and utility sectors. These are 11th Plan targets and onefourth is expected to be through the PPP route. This requires (a) creation of adequate projects for tender by government agencies; (b) interests in available projectsby private developers and cash contractors; (c) financial closure and start of construction; and (d) execution of projects on time and within the Budget. For the first three, McKinsey has constructed an integrated measure and benchmarked it against targets set by the 11th Plan. This shows that only the power sector has achieved 100 per cent of planned capacity. The other figures are 85 per cent for ports, 75 per cent for airports (including PPP in Bangalore, Delhi, Hyderabad and Mumbai) and 50 per cent for roads. Within roads, NHDP has only achieved 10 per cent of planned capacity. Even if all the bottlenecks are resolved, there will be an infrastructure deficit of between $150 and $190 billion. This equals 35 per cent of the investment planned in power, roads, ports, airports, irrigation, water storage and natural gas in the five years leading up to March 2012. Further it has been understood that slow and delayed progress in awarding and executing infrastructure project over the next nine years could cost India $200 billion in lost Gross Domestic Product (GDP). It has been pointed out that Projects are often delayed because of poor planning and engineering design in the tendering phase. And some projectsare rendered unviable because cost estimates are dated. In the construction phase, ineffective dispute resolution and performance management also has mentioned nothing significant and undermines the basic of the PPP operations.
Posted on: Fri, 14 Jun 2013 06:07:43 +0000
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