Availability of quality infrastructure is a pre-requisite to achieve
broad based and inclusive growth on a sustained basis. In order to have
sustained 7-10% GDP growth in India over next 20 years, highways sector will
have to be a main contributory sector, with at least 30-40% capacity addition
in near term (2013-18), and thereafter a sustained growth of 20-30% over next 15
years.
The XII Five Year Plan (2012-2017)
has an ambitious target of infrastructure investment and is envisaged at USD 1
trillion (or about INR 41 lakh crore, about 10 per cent of GDP). This projected
investment is about twice the investment envisaged in the XI Plan and 27 per
cent of the gross domestic savings.
Given the enormity of the investment requirements and the limited
availability of public resources for investment in physical infrastructure, it
is imperative to seriously tap avenues for increasing investment in
infrastructure through a combination of public investment, Public Private
Partnerships (PPPs) and occasionally, exclusive private investment wherever
feasible. The adjoining figure shows the increasing investment by private
sector in different plan periods.
Around 18637 km of expressways have been identified
by the Government for development in phased manner till 2022.The value of total
roads and bridges in India is expected to grow at a CAGR of 17.4 percent over
12th plan to reach USD 19 billion shown in the figure below:
Present statistics of PPP (across various sectors or only roads sector)
in India shows that 758 projects costing INR 3, 833 billion have been awarded
so far. Under this arrangement Concessionaire bears the risks for operation,
construction, technical and maintenance and other vital risks related to
traffic risk and toll collection threat are assigned to the sanctioned highway
authority in the PPP mode.
Risk sharing Model
for PPP projects
|
||||
Mode of development
|
Development risk
|
Financing risk
|
Traffic risk and accrual of toll fee
collection
|
Net cash outflow for the government
|
BOT-Toll-Premium
|
Concessionaire
|
Concessionaire
|
Concessionaire
|
No
|
BOT-Toll- Grant
|
Concessionaire
|
Concessionaire
|
Concessionaire
|
Yes
|
BOT-Annuity
|
Concessionaire
|
Concessionaire
|
Authority
|
Mostly Yes. Net payment to be made is the
difference between the toll collection and the annuity payable. The annuity
payments to be made to the developer mostly exceed the toll collections.
|
OMT
|
No development except in case of paved
shoulders
|
Concessionaire
|
Concessionaire
|
No
|
Lack of good quality infrastructure is the biggest impediment to India’s
growth story. To overcome this situation, development of roads and highways is
the priority for the authorities. The roads sector has witnessed slowdown in
construction activities recently. Government of India ambitious target of
constructing 20 km of highway per day hit a roadblock as it was able to award
only 1100 km of road against the target of 8800 km in 2012-2013(key reasons for
this- policy issues, bureaucracy issues etc)
The sector is witnessing many issues and challenges. It was observed from
recent past that some of the BOT highways projects are delayed up to 36 months
and beyond for various reasons such as poor performance by some contracts and
constraints faced by some contractors, environment and forest clearances, land
acquisition, clearance of railways for ROB designs, shifting of utilities,
arbitration matters etc.
For the concerns raised by major industry stalwarts like GMR and GVK the
Prime Minister has appointed C Rangarajan committee to recommend reduction and
deferment of premium to be paid to NHAI. The panel is likely to recommend for
six- laning projects the reduction of 25 percent annual premium payment to NHAI
and postpone 50 percent in the coming years.
According to Infraline research, the investment in BOT (Toll) mode would
be around 68 percent, 8 percent in Annuity and 24 Percent in EPC mode. This
trend of investment clearly indicates the level of private participation would
be increasing over the period of time. The private sector is expected to
contribute at least half of the over $1 trillion dollar (Rs. 41 lakh crore)
investment planned in infrastructure in the XII plan (2012-17).
Infraline Energy Road Research Team
No comments:
Post a Comment