What Can Be Done To Revive Private Investments In Infrastructure?

With the public-private-partnership (PPP) model not quite taking off, most infra projects across India are being implemented in the engineering, procurement and construction (EPC mode). In Maharashtra alone, out of a total of Rs 200,000 crore worth of projects ongoing, just one project of Rs 16,000 crore is on PPP mode.

ADVANTAGES OF PPP MODEL

• During 2007-12, private sector contributed 36.6 per cent in the overall infrastructure investment, leading to infrastructure investment rising from ~5 per cent of GDP during 2002-07 to ~7 per cent of GDP during 2007-12.
• PPPs have overcome the capacity constraints of the economy by generating huge productivity through optimal utilisation of labour and capital resources.
• PPPs in India have integrated public infrastructure with the superior financing and maintenance provided by private enterprises. The synergistic collaborations between the public sector and private firms and companies have led to the generation of resources and knowledge transfer.
• Infrastructure created using PPP is of a superior quality. This has led to the development of many good airports and buildings across India.
• By increasing the efficiency of the government's investment, it allows government funds to be redirected to other important socioeconomic areas.
• PPPs that reduce costs also allow lower taxes.

The question is can the government alone spend on infrastructure creation?

The question is will the private sector
not get involved?

The question is what is being done to address stakeholder concerns?

Good Question
What can be done to revive private investments in infrastructure?