BANGALORE: With the increasing significance of public-private partnerships in various sectors, Additional Chief Secretary to the Finance Department L V Nagarajan stressed upon the need for well-designed clauses and also for regulators in such projects.
“In any PPP project, the two most important components are asset building and asset management. It is in the latter part that problems arise,” he said.
He was speaking at a workshop held for executives from the banking and finance sector. Nagarajan added that in a successful PPP project, the contract plays the most important role. “There should be renegotiation and dispute resolution clauses in the contract. Also, sharing of risks is a part which is often left unclear,” he said. He further added, “Good performance and monitoring of performance, credit enhancement and also regulators are crucial.”
Talking about the state of PPP in the country, he noted that the model was working successfully in Uttar Pradesh, Madhya Pradesh and Gujarat, especially in the field of road works. He said that other sectors are trying but many are not getting good response.
“We are trying very hard to introduce the PPP model in agriculture sector but are faced with many hurdles - land division being one of the biggest,” he said.
Vandita Sharma, Principal Secretary to Infrastructure Development Department, said that sectors like power, roads, bridges, ports and natural gas would benefit a lot from private sector contribution.
“The benefit of the private sector contributing is two fold - one in terms of money and the other is efficiency.” Citing example of the Kempegowda International Airport, a PPP project, Sharma said, “On the lines of the KIA we are developing a business park and international convention centre - as PPP projects.” She further said that 12 departments had been commissioned and 12 PPP cells created to boost PPP models of development for various sectors.