Infrastructure woes find a new solution in roadshows
Foreign construction companies will be wooed by the government through roadshows abroad to participate in the Public Private Partnership (PPP) plan for infrastructure development.
By Subhomoy Bhattacharjee & Soma Banerjee, TNN |
NEW DELHI: Foreign construction companies will be wooed by the government through roadshows abroad to participate in the Public Private Partnership (PPP) plan for infrastructure development.
With a $150-billion target infrastructure spend target for the country, unlikely to be fulfilled from within the country, the finance ministry has decided to hold these shows in major countries abroad. The PPP model has been developed by the ministry to push investment in sectors like road, civil aviation, railways, shipping and others.
Simultaneously, to demonstrate its seriousness about the venture, the ministry has already cleared seven infrastructure projects under the PPP model for Rs 680 crore from states. The roadshows abroad are different from earlier interaction with investors abroad held by the centre earlier.
Those were primarily aimed at projecting the country as a bright investment destination and cut across all sectors of the economy. This time, the government is projecting a specific investment model to gather critical FDI from abroad, as “vendor development”.
The projects cleared by the finance ministry include the four laning of Rajkot-Jamnagar-Vadinar road and two other road projects in the state, four laning of the Osmanabad-Latur-Nanded road in Maharashtra and development of an integrated waste processing complex under the NDMC in New Delhi.
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Government officials said the approval for the projects demonstrated the soundness of the PPP model to develop large scale infrastructure in the country. The money will be released under the viability gap funding model — the financing scheme of the government to cover the risk element in any project. The viability gap funding provides a grant component that makes the project bankable. Otherwise these projects would have languished for years.
The other component is debt financing through the newly set up India Infrastructure Financing Corporation Limited. Government officials said most of the initial set of projects has come from the road sector but proposals are expected from civil aviation and ports also. The government has already decided that other than Delhi and Mumbai, airports in the country will be developed through the PPP model.
They said the model has ensured that the government does not have to commit ever increasing amount for the development of infrastructure.
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