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Public-private partnerships can ensure that projects are completed on schedule
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We need to learn our lessons,  and fast. India’s glorious rural infrastructure programme, Bharat Nirman (a four year time bound plan to improve rural infrastructure) has been facing serious delays in almost every state, with a massive backlog of almost 90% in the important regions. One can only imagine the pressure this delay will exert on the financing system.

Getting funds is essential but that’s just the beginning. The need of the hour is to have better and far more efficient project structuring, management and execution. At the same time, implementation of the right policies followed by proper (and independent) economic regulation will be equally important.

As it readies itself for transition into an economic super power, India simply cannot afford delays in its infrastructure projects. Funds will definitely flow in. However, fair and constructive generation and channelisation of public as well as private finance will be a key to success.

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ADB assistance encourages PPP

The Asian Development Bank (ADB) is assisting India in the development of infrastructure projects that can attract private sector investment through the modality of Public-Private Partnerships (PPPs). The Japan Special Fund, through ADB, will provide a US$2 million (Rs one crore) technical assistance grant to help government agencies in India develop a number of pilot PPP projects. These pilot projects can eventually serve as models for future projects. The sectors covered under this initiative include urban development, transport, water, health and education.

ADB’s technical assistance would include all aspects of project structuring including institutional, financial, commercial, legal, social, environmental, and technical structuring leading to a competitive bid process to attract private sector participation.

The India Infrastructure Project Development Fund (IIPDF), a facility of the Government of India, will complement ADB’s technical assistance. This is expected to have a wider impact. “The ADB-IIPDF partnership will play a crucial role in actually demonstrating the benefits of PPPs through setting forth replicable PPP models with well-balanced risk and bankability structures,” said Anouj Mehta, senior infrastructure finance specialist (PPPs) at ADB’s Indian Resident Mission.

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