Mumbai Capital

Maharashtra leads in termination of PPP projects



Maharashtra may have edged out Gujarat as the most favoured investment destination but it leads the list of States where the most number of public-private partnership (PPP) investment projects have been terminated.

Maharashtra with 13 per cent share in PPP terminated projects in terms of value is followed by Chhattisgarh (10 per cent), Gujarat (nine per cent), Kerala (seven per cent) and Madhya Pradesh (seven per cent), according to findings of a joint study by Assocham and SREI.

In terms of the number of terminated projects, Maharashtra also leads the list with 9.2 per cent followed by Madhya Pradesh and Tamil Nadu.

“Information on the geographical distribution of PPP projects that have been terminated shows that Maharashtra, Chhattisgarh and Gujarat have emerged as the top three States. Close to 44 per cent of total value of projects that have been terminated in the PPP mode fall in these three States,” the study said.

In India, 65 PPP projects with investments worth over Rs 77,000 crore have been terminated.

“Poor preparations, flawed risk-sharing, inappropriate business models and fiscal uncertainties to vested interests leading to development of skewed qualification criteria are certain key reasons for failure of PPP projects in India,” the study said without naming any project.

The study released here on Wednesday notes that stable macroeconomic framework; sound regulatory structure and effective regulation; sustainable project revenues; investor-friendly policies, transparency and consistency; liberalisation of labour laws; and good corporate governance are the basic requirements to achieve success of the PPP sector in India.

An appropriate institutional framework is a prerequisite for success of PPP in infrastructure development due to its size, investment requirements, structure and dimension, it added.

According to this study, Uttar Pradesh has the highest share of about 15 per cent in the projects being carried out under the PPP mode across India followed by Maharashtra (12 per cent), Gujarat (10 per cent), Karnataka (nine per cent) and Tamil Nadu (six per cent). Uttar Pradesh also has the highest share of about 22 per cent in terms of value in the total PPP investment projects under construction across India followed by Maharashtra (11 per cent), Haryana (8.5 per cent), Gujarat (six per cent) and Madhya Pradesh (4.5 per cent).

However, Gujarat has the highest share of 15.5 per cent in the total PPP investment projects that are under operation. The western State is followed by Uttar Pradesh (13 per cent), Maharashtra (13 per cent), Tamil Nadu (eight per cent) and Karnataka (seven per cent).

The study also suggested that the government set up an independent institution for overall coordination and management of PPP projects in the country.

“It should also act as a nodal agency with the responsibility of creation of PPP database, creation and regular updating of model bid documents for all infrastructure sectors; coordination with the government departments concerned and dissemination of best practices and learning through both successes and failures,” it said.

According to this study, almost 73 per cent of the total investments, worth over Rs 3.3 lakh crore, attracted by the infrastructure sector in various segments under construction in the PPP mode are concentrated in roads and bridges.

480 projects

“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,” the study said.

“A total of about 1,200 projects in different segments of infrastructure sector with investments worth about Rs 7 lakh crore are being carried out under the PPP mode throughout India,” said Sunil Kanoria, president, Assocham, while releasing the study.

Of these, about 650 projects worth over Rs 4.5 lakh crore with about 67 per cent share are there in roads and bridges followed by over 100 projects in the ports sector (12 per cent share) with an investment over Rs 80,700 crore, energy (six per cent) with over 150 projects with investments over Rs 41,000 crore, SEZ (five per cent share) with investments over Rs 30,000 crore, water sanitation (2.6 per cent) and others, he said.

“About 500 PPP projects with investments over Rs 1.6 lakh crore are under operation while there is no information about 150 PPP projects with investments worth over Rs 1 lakh crore, the study prepared by the Assocham Economic Research Bureau said.



In India, 65 PPP

projects with investments worth over Rs 77,000 crore have been terminated





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Printable version | Jan 17, 2021 8:20:46 AM | https://www.thehindu.com/news/cities/mumbai/business/Maharashtra-leads-in-termination-of-PPP-projects/article13999354.ece

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