Lok Sabha Question No. 711 (UNSTARRED), answered on 2016-11-21
Subject: PPP Investment in Infrastructure
Ministry: COMMERCE AND INDUSTRY
Asked by: BAIJAYANT "JAY" PANDA

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

UNSTARRED QUESTION NO. 711. TO BE ANSWERED ON MONDAY, THE 21 ST  NOVEMBER,  2016.

## PPP INVESTMENT IN INFRASTRUCTURE

## 711.   SHRI BAIJAYANT JAY PANDA:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज् यवव द्यग ं ्री

- (a) whether  Public  Private  Partnership  (PPP)  investment  has  been  low  in infrastructure  sectors  during  the  last  four  fiscal  years  and  if  so,  the  details thereof;
- (b) whether the decrease in private investments in PPP Projects is due to delays in project approvals and land purchases by the Government and complicated dispute resolution mechanism in concession agreements;
- (c) if so, the details thereof; and
- (d) the corrective steps taken by the Government in this regard?

## ANSWER

वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a) to (d): The  status  regarding  PPP  investment  in  infrastructure    in  respect  of various Ministries/Departments is Annexed.

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## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  THE  LOK SABHA UNSTARRED QUESTION NO. 711 FOR ANSWER ON 21.11.2016

## 1. Ministry of Road Transport and Highways (MoRTH):

- (a) Yes. The award of MoRTH PPP projects in highway sector dropped in 201213   and 2013-14.

However, MoRTH identified the concerned issues and took suitable measures including introduction of a new PPP Model - the Hybrid Annuity Model which resulted in the revival of the sector in the following years.

- In 2015 -16, 7 BOT (Toll) projects with cost of around Rs 12,000 crores and 11  Hybrid  Annuity  Projects  with  cost  of  around  Rs  8,700  crores  were awarded.
- In 2016 -17 so far , 17 more Hybrid Annuity projects with cost of around Rs 16,300 crores have been awarded. Many more are in advanced stages of bidding.
- (b) The reasons for drop in award of PPP projects in 2012-13 and 2013-14 were delays  in  Land  Acquisition,  and  regulatory  clearances  like  Environment, Forest & Wildlife Clearances, over-leveraged financial of highway developers, lack of availability of debt products suitable for highway projects, banks  reaching  ceiling  as  per  sectoral  exposure  norms  and  aggressive bidding. Even for awarded PPP projects, work could not start in many.
- (c) & (d) :   Major  policy  initiatives  undertaken  by  MoRTH  to  address  the        above include the following:
- i.  Exit  Policy  -  enabling  developers  to  take  out  100%  equity  and  exit  all operational BOT projects two years from COO.
- ii.  One  time  fund  infusion  -enabling  completion  of  languishing  BOT projects that have achieved at least 50% physical progress, through one time fund infusion by NHAI, subject to adequate due diligence.
- iii.  Enhanced Inter-Ministerial coordination - a Group has been created under Chairmanship  of  Hon'ble Minister  of  Road  Transport  Highways  and Shipping to resolve issues related to Environment & Forests, Railways and Defence.
- iv.  Rationalized compensation to concessionaires for languishing NH projects in  BOT  mode  for  delays  not  attributable  to  concessionaires  -  has  been allowed.
- v.  Premium deferment in stressed projects -enabling rescheduling of premium  committed  by  concessionaires  during  bid  stage  for  awarded projects.

## 2. Ministry of Railways:

- (a) to (d):    Till now, investment of more than Rs. 35,000 crore has been committed for Public Private Partnership Projects in Railways.  In 2015-16, Ministry of Railways received financial commitment of Rs. 15,082 crore through extra budgetary resources from other than Indian Railway entities.

Ministry of Railways has taken several policy measures to attract private investment namely, new Participative Policy for capacity augmentation, issuing Sectoral  guidelines  for Domestic/Foreign  Direct  Investment (FDI),  preparing  Model  Concession  Agreements  (MCAs)  for  PPP

models,  liberalizing Private Freight Terminal  (PFT)  policy, Station redevelopment policy, setting up Loco manufacturing units through PPP etc.

Clearance/permissions for the projects are obtained by the developers in terms of the conditions of the contract. The Concession Agreements provide for Conciliation, Arbitration and  Adjudication for resolving disputes between Government and partners.

## 3. Ministry of Civil Aviation

(a) No.

(b) to (d) : Do not arise in view of (a) above.

## 4. Ministry of Power and Department of Industrial Policy and Promotion:

They do not have the Central Sector PPP Projects currently.

## 5. Ministry of Micro Small and Medium Enterprises:

NIL

## 6. Ministry of New & Renewable Energy

Most Renewable power projects are installed with private sector investment. As  Renewable  Power  installations  are  constantly  increasing  in  last  many years  there  is  no  question  of  reduction  in  investment  in  the  sector  in  PPP mode.  Renewable  installed  capacity  in  last  four  years  and  current  year  is given below.

2012-13: 3163 MW 2013-14: 3640 MW 2014-15: 4089 MW 2015-16: 7072 MW 2016-17: 3163 MW (April'16 to Sept'16)

## 7. Ministry of Shipping

- (a) During last four years, i.e., 2012-2016, a total of 55 projects have been awarded by major ports involving a total investment  of  Rs. 41810.11 crore, the year-wise details of which are given below:-
- (b) to (d) To increase investment and capacity enhancement in the Major Ports, Port  Master  Plan  up  to  2035  has  been  prepared  and  is  being  acted upon by all the Major Ports.  In addition to this, various new proposals were identified in the Maritime India Summit held in April 2016, which will  be  implemented  in  the  near  future  with  an  aim  to  increase  PPP investment in the Port Sector.
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|   S. No. | Year    |   No. of Projects |   Investment |
|----------|---------|-------------------|--------------|
|        1 | 2012-13 |                19 |      6182.95 |
|        2 | 2013-14 |                16 |     18640.8  |
|        3 | 2014-15 |                10 |      9376.43 |
|        4 | 2015-16 |                10 |      7669.9  |