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Public private partnership agreements and models of implementation in road infrastructure projects in India

Student name: Ms Srishti Aggarwal
Guide: Dr Jaya Vasudevan
Year of completion: 2020

Abstract:

India has embarked on a rapid pace of road development following the policy change in the late 1990s that gave high priority to road development in India. The National Highway Development Programme (NHDP) was launched in 1997 to develop a large road network in a relatively short span of time. The Public Private Partnerships (PPP) model was adopted for road development in India, given the inherent advantages associated with it over conventional models. Pursuant to the policy decision, a large number of road development contracts were awarded under the Build-Operate-Transfer (BOT) variant and other variants of PPP model.

Grant financing model was replaced by the revenue model based on toll collection to finance the projects. The private developers were provided with good incentives by the Government of India for making road development an attractive option for them. The private sector participation was given a push through a slew of measures like Viability Gap Funding for highway development project (VGF), Model Concession Agreement for small and large road projects (MCA), Project Development Fund for meeting expenses of DPR preparation (PDF), PPP Advisory Committee for the project scrutiny and clearance, etc.

Though the PPP model has proved to be effective in the overall road infrastructure scenario in India, the fact that there are some shortcomings in the model cannot be ignored or overlooked. India is a fast-growing nation and the road/highway infrastructure have played a pivotal role in the development of the country, yet there are some flaws that need to be worked upon on a priority basis. As soon as we are able to come up with effective solutions to address the problems in the present PPP model which include the Rehabilitation and Resettlement issues, issue of sustainable development, transparency in the bidding process etc., there would be no looking back.

This study is an effort to analyse and summarise the government’s efforts in incorporating different models of PPP as per the requirement of times. This work establishes the current scenario of road projects in India and how far we have made it in terms of development of overall road network, especially highways, by the way of exploring different PPP models and funding sources.