PPP push: FinMin asks infra depts to identify projects for private partnership
The move is aimed at drawing greater private capital into public infrastructure and reducing delays in project implementation, according to the person, who said the focus will also be on improving the fund flow into sectors such as urban infrastructure, railways and roads, where private participation remains either minimal or far from impressive. The ministry is planning to roll out in this financial year a new public-private partnership (PPP) architecture and a standard model concession agreement (MCA) framework for various infrastructure sectors.
«While the government has walked the extra mile to boost capital spending in recent years, it's also desirable to increase the participation of private players, as the funding requirements in infrastructure remain large,» the person told ET on condition of anonymity. The planned MCA framework will serve as a standard reference document for various infrastructure departments and state-run entities.
It will offer enough flexibility to them to suitably build in clauses peculiar to their sectors. The focus will be on making the projects bankable and viable to woo private investors, said the person.
The move comes at a time when broader private investments have started picking up, with senior industry executives expecting a broad-based resurgence in 2023-24. The government is also nudging central public sector enterprises (CPSEs) to boost capital expenditure without delay, said the person.
In April 2020, a government task force on the National Infrastructure Pipeline (NIP) had envisaged capital investments of ₹111 lakh crore until 2024-25. The Centre (39%) and the states (40%) were expected to have almost an equal share in the NIP implementation, followed by the private sector
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