Some experts of the public-private partnership (PPP) model feel that the government may renegotiate the concession agreement in the course of a concession period for mega infrastructure projects if situation warrants.
They argue that the initial projections or assumptions made by the concessionaire in case of a road or metro rail project may go wrong in the course of the concession period.
Under such circumstances, the government, which is the public sector partner in a PPP model, ,must assist the private partner in ensuring that capital invested sees a fair rate of return, experts argue.
Such comments come on the back of the exit of Reliance Infrastructure from the Rs 5,800-crore Delhi Airport Express Line contract.
It may be noted that a key reason for the failure of the Express Line PPP is an inflated traffic projection made in the beginning.
While the Reliance Infrastructure-led DAMEPL expected daily footfall to exceed 40,000, the actual footfall never crossed 20,000 per day.
Under such circumstances, the government must renegotiate the terms of the contract to ensure that the project is viable for the private partner despite the faulty projection.
Leave a Reply
You must be logged in to post a comment.