India should review PPP model to attract FDI for infra projects: Experts

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Indian authorities must revisit the Public Private Partnership (PPP) model to woo FDI and get foreign contractors involved in the developments of port, power and rail sectors efficiently, according to experts.

India needs to make the PPP model more transparent, so it gives a better return to investors, said Sanjiv Nanda, Member, Board of Trustee of the India Think Council (ITC).

"The PPP model, successfully used in road building, needs to be revisited and modified as per international standards," stressed Nanda at the World Bank Group-Asia Competitiveness Institute's annual two-day conference here.

Elaborating, he pointed out that India needs a lot of investments for infrastructure and PPP seems the right way to attract foreign investments and contractors.

National Highway Authority of India, as well as some power and port projects, have successfully used the PPP model, he noted, calling for more to be done in the engaging private sector.

There have been some success stories in the PPP model on the highways with standardised contracts which signal to the market that there was a level playing field and a structure that encourage the private sector participation, observed Dr Cledan Mandri Perrott, Head of Infrastructure, Finance and PPP at the World Bank.

"India's PPP market has been picking up over the past three to five years," noted Perrot, citing the model being used in some contracts on the massive programme to clean up Ganga River.

But there needs to be consistent policy support for the model as assurances to investors and contractors, both Nanda and Perrott felt.

The PPP model draws full commitment from its participants to deliver projects efficiently, cost effectively and on deadlines.

Perrott pointed out that foreign contractors' participation in Indian projects would stimulate the highest level of competition, resulting in higher efficiency on project implementation and lower costs.

The ITC is preparing a paper on the PPP model, according to Nanda.

"We have done the ground survey and now we are preparing the paper which should be published in about a month," he said.

The paper would have recommendation on enhancing the PPP model.

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