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Contract renegotiation may be a reality

Contract renegotiation may be a reality
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The government is considering the introduction of a force majeure clause in public-private partnership projects to allow renegotiation of contracts to revive private participation in infrastructure development and salvage some big-ticket projects.

The Planning Commission has proposed adding a provision for renegotiation in PPP contracts, including existing projects, to deal with unforeseen developments in a draft note sent to concerned ministries. After GMR, GVK, Ashoka Buildcon and others walked out of some of the biggest-ticket projects in the country, especially in roads, the industry has expressed its concern and has demanded the clause to be included. The Planning Commission, Infrastructure Today has learnt, has hitherto been firm–even dogged, industry spokespersons say–in rejecting the demand. The original concession agreements for highways were drafted by the Planning Commission.

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