Rs 102 lakh crore of infra projects unveiled
The Indian Express
Power, railways, roads, urban irrigation, mobility and health would account for the bulk of projects announced as part of the National Infrastructure Pipeline. Finance Minister Nirmala Sitharaman Tuesday unveiled Rs 102 lakh crore of infrastructure projects that will be implemented between fiscal 2020 and 2025, with the central and state governments contributing 39 per cent each and the private sector contributing the remaining 22 per cent.
Besides strengthening the municipal bond market, an aggressive push towards asset sales and regulatory mechanisms to levy user charges are among the reforms that have been recommended by government panel to aid the process of galvanising over Rs 100 lakh crore of investments in infrastructure sector in next five years.
She said the government will pursue a series of reforms to facilitate these investments and an annual global investors’ meet, set to be organised to attract investors. Of the total project capital expenditure during fiscals 2020 to 2025, sectors such as energy (24 per cent), urban (16 per cent), railways (13 per cent) and roads (19 per cent) are estimated to account for more than 70 per cent of the projected infrastructure investments in India. Department of Economic Affairs Secretary Atanu Chakraborty said the estimated spending on infrastructure projects will be met from the Budgetary resources till 2025. The government expects the private sector share to move up to 30 per cent from 22 per cent.
PM Narendra Modi had outlined the Centre’s plan to invest Rs 100 lakh crore in infrastructure over five years. A task force chaired by the DEA Secretary identified these projects after conducting 70 stakeholder consultations in four months. The FM said another Rs 3 lakh crore of projects are likely to be added to this pipeline. She said in the past six years, the Centre and states implemented infrastructure projects worth Rs 51 lakh crore.
In the next five years, the aim is to more than double the investments in the infra sector. Nearly Rs 25 lakh crore energy projects have been lined up, another Rs 20 lakh crore in road and nearly Rs 14 lakh crore railway projects have been lined up. Around 34 per cent of the projects are already in the implementation stage.
The task force suggested effective dispute resolution, contract enforcement and asset monetisation among other reforms for achieving infra investment targets. “A critical step in addressing dwindling private sector participation in infrastructure can be institutionalising dispute resolution mechanism to efficiently resolve disputes related to PPP projects … Ministry-level Committees (must be set up) to resolve complex contractual disputes as mediation mechanisms that can settle disputes out of court,” said the task force report. Investments must be made in the institutions created under The Commercial Courts Act 2015, The Specific Relief (Amendment) Act 2018 and the New Delhi Arbitration Centre Act 2019 for speedy resolution, it said.
The panel has suggested asset monetisation and a well capitalised Credit Enhancement institution to support infra projects that are rated below AA. “Asset monetisation can be undertaken through sale of land, non-operational assets through long-term lease with significant upfront lease payment, toll-operate-transfer (TOT) model for operational road assets, infrastructure investment trusts (InvITs), sale of portfolio of assets to strategic/ financial investors, loan asset monetisation through securitisation and value capture financing (VCF),” the panel said. The task force recommended that the pipeline for the next two years also be finalised within the next three months.
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