PPP mantra fails to enthuse investors

Projects worth only Rs 3,000 crore undertaken in the last two years

PPP mantra fails to enthuse investors


 The State has been able to take up just around Rs 3,000 crore worth of infrastructure projects under the PPP basis in the last two years. It covers around 20 projects in roads, health care, transportation and urban and municipal infrastructure sectors.

Not a single mega project has materialised ever since the new Infrastructure Policy 2007 was unveiled.

The State has secured the “confirmed commitment for investment” of around Rs 700 crore, including four airport projects in Hassan, Shimoga, Gulbarga and Bijapur, according to the latest PPP project report of the Infrastructure Development (ID) department, a copy of which is available with Deccan Herald.

The ID department has stated that eight projects worth Rs 3,366 crore have been commissioned.

These include Bangalore international airport (Rs 2,470 crore), four laning of NH-4 near Belgaum-Maharastra border (Rs 599 crore) and four laning of Bangalore-Mysore road (Rs 188 crore), which were taken up much before the introduction of new Infrastructure policy.

The State Government’s ambition was to take up 224 projects, covering seven major sectors, under the PPP at an estimated cost of Rs 1,38,779 crore. But the majority of the projects have remained on paper as there are no takers, despite the Government spending a huge amount of money in its attempt to promote the projects, including preparation of detailed project reports.

With no bidders, the ID department knocked off 69 PPP proposals from its list. Of the remaining 155 project proposals, as many as 26 are still at the identification stage, 18 at development, 13 at request for proposal, 74 at bidding and 20 at the stage of financial closure. Among projects that are in the bidding stage include 10,000 km road development project.

Why has the PPP not been a success so far? “Investors are scared of too much political interference. This is the main reason for them not coming forward.

Many big projects proposals like Nandagudi SEZ by SKIL and Knowledge city township by DLF, have failed to take off due to politics.

The long-drawn controversy surrounding BMIC project has sent out a wrong message to investors. Economic downturn is yet another reason,” a top official noted.

ID department Principal Secretary V Madhu, however, insists that PPP is still in its infancy. It is only recently that model guidelines for the PPP were laid down by the Union Government. Despite being a new concept, the State has been able to do well, he stated.

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