Infrastructure public private partnerships need more flexibility: Kamal Nath

NEW DELHI: Urban development minister Kamal Nath called for a more flexible approach towards infrastructure projects in order to meet India’s target of developing new infrastructure worth one trillion dollars over the next few years.

He also said that highways, ports and other vital infrastructure under construction are not so much about the future, but more about catching up with the past.

“Because India’s growth preceded infrastructure (building), whatever efforts are being made in the infrastructure sector, it is largely an effort to catch up with the past. We are not building for the future… it is not capacity building but deficit management,” Nath said while launching the ET Infrastructure Summit in the capital on Thursday. Terming the current pessimism about the economy and infrastructure projects in particular as overdone, Nath said: “In India, sometimes when it is not boom, we think it is gloom, or worse still, doom. Though many projects have fallen apart in recent years, we have learnt a lot in the same period about public private partnerships (PPPs).”

Pointing out that few banks had faith in PPP model in 2004-05, the entire government system has been on a huge learning curve on using PPPs for infrastructure development since then, the minister said.

Arguing that no single PPP model is perfect for all projects, Nath said since infrastructure projects are given out for over 20-25 years, there must be some flexibility in the contracts to deal with changed scenarios. “These are long-term calls, so flexibility is a must for PPPs. There should be dynamic models with built-in provisions to deal with the prospect of failure and clarity on how to provide for exits or changes in management and company, if such an event arises,” Nath added.