BUSINESS

‘PPP model can revive private investment’

India’s infrastructure needs can be addressed by enhancing the public-private partnership (PPP) model, which will help attract more private sector investment in sectors such as roads and highways, according to a Moody's Investors Service report.

“Historical underinvestment and rapid economic growth are straining India’s existing infrastructure,” Abhishek Tyagi, Vice President and Senior Analyst at Moody’s Investors Service wrote.

“While the country's PPP model has seen reasonable success in some sectors over the last 20 years, PPP activity has been low in the last four fiscal years due to challenges with the model.”

Project delays

The sharp drop in private investment in PPP projects in recent years was due to delays in project approvals and land purchases by the government, complicated dispute resolution mechanisms in concession agreements and lower than expected revenues due to aggressive assumptions, Mr. Tyagi wrote.