Mr. Nitin Gadkari, Hon’ble Union Minister for Road Transport & Highways and Shipping emphasized the importance of private sector in building India’s infrastructure at the PPP Summit organized by CII. A lot of innovative initiatives like use of waste material for road construction, preparing precast designs et al are being implemented to reduce the cost of construction and improve the overall quality of road building.
He shared with the participants that major challenges be it land acquisition, environment/forest clearances, Railway over bridge related clearances etc. have all been resolved. He mentioned that 21 cabinet decisions have been taken in the last year and a half to revive and strengthen of the sector. In the Hybrid Annuity Model, Government plans to award 21 road projects by March 2016 of which 3 have already been awarded. Further, State Governments have been roped in for preparing DPRs for roads worth 20000 kms which would help in achieving 1.5 lakh km road construction target per year. Moreover he stressed on the need to develop 101 important rivers in the country for inland waterways, something which has much higher economic potential and viability than Roads or Rail. He also urged private sector to come forward to develop lighthouses and islands in and around waterways to improve water transport which would reduce logistics cost and spur tourism in the country. Highlighting the need to bring in technology, innovation and new practices in the sector, he urged the private sector to come and partner the Government in taking forward India’s Infrastructure story.
Mr. Suresh Prabhu, Hon’ble Union Minister of Railways, Government of India in his Inaugural Address reiterated that there is no other alternative than to get private sector participation in the country. Balance needs to be achieved between profit and public interest objective. Elaborating on his Ministry’s increased focus to incentivize private sector participation, he highlighted the largest FDI project worth 40,000 crore in the Railway sector to set up Diesel and Electric locomotive factories. These state of the art manufacturing facilities will create an eco-system with spin-off benefits, which will not only create jobs in the manufacturing facilities but will also help in developing ancillary units. He also highlighted that the proposal to redevelop about 400 railways stations is in advance stage and are structured in most viable manner that would benefit all stakeholders. Further, he also mentioned that Dedicated Freight Corridor project worth Rs 80,000 crore which is being implemented at a satisfactory pace. He also highlighted that the Ministry has signed projects worth Rs 3 lakh crore in JV with states. In another important area of regulatory framework for rail sector, the Ministry would soon invite comments from stakeholders, he sahred. The work is also underway to revamp PPP cell within the Ministry of Railways with an objective to streamline processes to enhance transparency. In this regard, all contracts would be on E-tendering by end of the year, he added.
Mr. GV Sanjay Reddy, Chairman, CII National Committee on Infrastructure and Vice Chairman, GVK Power and Infrastructure Limited highlighted the focus on creating next generation PPPs especially at the time when Dr. Kelkar has just submitted his report to the Government. He emphasized that a lot of positive steps have been taken especially in areas of project preparation, regulatory framework overhaul, amending the existing dispute resolution mechanism. However, challenges still loom in respect of project appraisal, implementation and claim settlement. Going forward, it is imperative to revive confidence of investors to bring back the much-required equity in the system, he opined.
Mr. Vinayak Chatterjee, Chairman, CII Task Force on Railways and Chairman, Feedback Infra Private Limited apprised the participants on multiple successful initiatives undertaken by CII in the recent past to reset PPP framework in infra space. Government, whether PMO or Ministry of Finance, has been receptive to these suggestions, he added. However, the impetus still needs to be given on creating a level playing field with clear demarcation of Government’s role either as partner or concessioning authority. More importantly, it is crucial to create a renegotiation commission, bring in equal partnership, competitive neutrality and revived push to resolve stalled projects. Reverse BOT concept, wherein private sector is roped in after initial construction risk is taken care by Government needs to be pushed, he further added.
Other speakers at the Summit included Mr. Raghav Chandra, Chairman, NHAI; Mr. Rajive Kumar, Secretary-Shipping, Government of India, Mr. Ajay Shankar, Chairman-PPP Cell, Ministry of Railways, Government of India and Mr. Girish Pillai, Adviser-Infrastructure, Ministry of Railways, Government of India.
The speakers at the Summit engaged in a meaningful consultation with stakeholders including lenders, developers, concessionaires, consultants with an objective to revive and strengthen PPPs in infrastructure space.
4th December 2015
New Delhi