The government has formed a committee to relook at the public private partnership (PP) model of infrastructure development, it said on Tuesday.
This comes after Finance Minister Arun Jaitley in his Union Budget 2015 speech had said that the PPP model of infrastructure development needs to be relooked at, with a focus on re-balancing risk.
The committee will be chaired by Vijay Kelkar, former finance secretary and chairman, National Institute of Public Finance and Policy (NIPFP). Its members will include CS Rajan, chief secretary, government of Rajasthan; SB Nayar, chairman and managing director, IIFCL; Shekhar Shah, director general, NCAER; Pradeep Kumar, managing director, corporate banking, State Bank of India; Vikram Limaye, managing director, IDFC; Sharmila Chavaly, joint secretary, Department of Economic Affairs, Ministry of Finance.
The committee is expected to study the PPP model, including variations in contracts and difficulties associated with it. It will also take a look at risk sharing between developer and the government in the existing model and suggest an optimal mechanism to share risk.
It will propose design modifications to the contractual arrangements of the PPP model based on the study and suggest measures to improve capacity building for effective implementation of such projects.
“The committee may consult various stake-holders in the private and government sectors, legal experts, banking/financial institutions and academia while firming-up its recommendations,” it said.
It will come up with a report within three months.
In the Union Budget 2015, the government had emphasised the need to reboot the PPP model. “The major issue involved is rebalancing of risk. In infrastructure projects, the sovereign will have to bear a major part of the risk without, of course, absorbing it entirely,” Jaitley had said.