The Hindu : Workable solutions key to large investments in infrastructure

Online edition of India's National Newspaper
Friday, May 30, 2003

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Workable solutions key to large investments in infrastructure — Crisil

MUMBAI MAY 29. Chalking out workable solutions can lead to large investments in infrastructure development through public-private-partnership (PPP), according to Credit Rating Information Services of India Ltd. (Crisil). The solutions are required to be developed in three areas, namely, policy and legal environment, governance structure so as to minimise delays and project development, a Crisil release says here today.

India's expectations of attracting substantial private investments in infrastructure have not materialised, it says.

While a few success stories can be cited such as the National Highway Authority of India's annuity-based road programme, port development in Gujarat and infotech parks in Karnataka and Andhra Pradesh, in general, successful PPP formats have not emerged, it says.

"Even today, a large number of projects are unable to attract private sector interest and fewer are able to achieve financial closure,'' the rating agency adds.

Crisil says a stable legal and policy environment was essential as many Indian statutes were formulated before the concept of PPPs emerged and hence, provisions for PPPs were today inferred from the absence of any restrictive clauses to the contrary rather than from any specific enabling provisions.

Gaps in India's complex governance structure often results in a lack of homogeneity in approaching PPPs and consequently, inordinate delays, it says adding, the third fundamental issue emanates from improper project development exercises undertaken by various government agencies. — PTI

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