JV entity mulled to boost PPP projects

RUN-UP TO THE BUDGET

The government is mulling an institution modelled on Partnerships UK "" a major player in developing public-private partnership (PPP) projects in the United Kingdom "" that will facilitate the building of viable PPP projects in India. The proposal is likely to be part of the Union Budget 2008-09.

This new entity will work with various public sector bodies starting from the local authorities to provide training as well as create a pipeline of bankable projects.

"The institution will be a 50:50 joint venture partnership between the government and infrastructure financial institutions. It will work with government bodies from the conceptual stage of a PPP project. It will also take over some of the work from the government, like analysis of PPP projects and viable gap funding in case a key project lacks commercial viability," a government official said.

The institution, which is yet to be named, will also disseminate effective communication about government policy on PPP projects.

"It is a very good step. It will help create a positive environment for PPP projects," said Vijayak Chatterjee, chairman, Feedback Ventures.

Partnerships UK was established in 2000. The British government owns 49 per cent in it while the balance is owned by financial institutions like HSBC, Barclays and British Land among others.

It works with the government in the development of PPP policy and contract standardisation, helps with project evaluation and implementation, and supports PPPs in difficulty. It also takes risk on the outcome of the development and procurement process.

The United Progressive Alliance government has been focussing on PPP projects in a big way to meet the infrastructure deficit in the country.

The Planning Commission has estimated an investment requirement of around $500 billion for the infrastructure sector during the 11th Five-Year Plan (2007-12).

Of this, the contribution by the private sector is expected to be around 30 per cent or $155 billion.