Uttar Pradesh (UP) tops with the highest share of about 15% in the projects being carried out under public-private partnership (PPP) model for infrastructure projects across India followed by Maharashtra (12%), Gujarat (10%), Karnataka (9%) and Tamil Nadu (6%) amid top five states in this regard, noted a recent ASSOCHAM-SREI joint study.
“UP again has the highest share of about 22% in terms of value in the total PPP investment projects under construction across India followed by Maharashtra (11%), Haryana (8.5%), Gujarat (6%) and Madhya Pradesh (4.5%), highlighted the study titled ‘PPP Investment in Indian Infrastructure: Need for growth and development,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) with infrastructure conglomerate SREI.
Gujarat has the highest share of 15.5% in infrastructure projects (value terms) that are under operation based on the PPP model and is followed by UP and Maharashtra (13% share each), Tamil Nadu and Karnataka (almost 8 % each).
Of these, about 650 projects worth over Rs 4.5 lakh crore with about 67% share are there in roads and bridges followed by over 100 projects in ports sector (12% share) with an investment worth over Rs 80,700 crore, energy (six percent) with over 150 projects with investments worth over Rs 41,000 crore, SEZ (five percent share) with investments worth over Rs 30,000 crore, water sanitation (2.6 percent) and others.
About 500 PPP projects with investments worth over Rs 1.6 lakh crore under operation, there is no information about 150 PPP projects with investments worth over Rs one lakh crore and 65 such projects with investments worth over Rs 77,000 crore have been terminated, noted the ASSOCHAM-SREI study.
Close to 73 % of the total investments worth over Rs 3.3 lakh crore attracted by the infrastructure sector in various segments that are under construction in the PPP mode are concentrated in roads and bridges.
Currently there are about 480 investment projects under construction in the PPP mode in various other segments – SEZ, ports, energy, water sanitation, airports, tourism, healthcare, cold chain and others.
Interestingly, most PPP investment projects have been terminated in Maharashtra (13%) followed by Chhattisgarh (10%), Gujarat (nine percent), Kerala (7%) and MP (seven percent).
“Poor preparations, flawed risk-sharing, inappropriate business models and fiscal uncertainties to vested interests leading to the development of skewed qualification criteria are certain key reasons for the failure of PPP projects in India,” said Rawat.
The ASSOCHAM-SREI study noted that stable macroeconomic framework; sound regulatory framework and effective regulation; sustainable project revenues; investor-friendly policies, transparency & consistency; liberalization of labour laws and good corporate governance are certain basic requirements to achieve the success of PPP sector in India.
“It should also act as nodal agency with the responsibility of creation of PPP database, creation and regular updating of model bid documents for all infrastructure sectors; co-ordination with concerned government departments and dissemination of best practices and learning through both successes and failures,” further discovered the study.