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Experts call for mechanism to rework PPP contracts

Experts call for mechanism to rework PPP contracts

International experts on public-private partnerships (PPP) projects suggest the government to devise mechanisms to permit contract renegotiations during the term of the concession.

Experts said this at a FICCI conference on PPP held recently in Delhi. According to a study by the World Bank, 55 per cent of (PPP) contracts in the transport sector were renegotiated across the world during 1985-2000 and 75 per cent of contracts in the water and sanitation sector were renegotiated during this period.

Addressing the event, Onno Ruhl, World Bank’s Country Director for India said globally most projects undertaken on PPP basis had to be renegotiated. He said the above study, in which about 1,000 PPP projects were considered, showed that 30 per cent of projects had to be renegotiated.

He opined that nobody has the ability to write contract for 20-30 years. But the challenge is to renegotiate in a transparent and equitable manner, he said and added that the cost of non-adjustment could be very high.

India’s Highways Secretary Vijay Chhibber said there is a need to set up an institutional mechanism, like a highway regulator in the wake of demands from several highway developers to reschedule their premium payment to government.

The proposed regulator must act at armÂ’s length from both National Highways Authority of India (NHAI) and private developers, Chhibber said.

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