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Contents
Where is Devil and Deep Blue Sea in Infrastructure
Then why to enter in Deep Sea and face devil
Take a Boat, negotiate the deep sea Reach next to light house, Take the nectar You will be blessed along with society Sent one of his angel to go unnoticed along and help in trouble
The Devil
The Policy Environment
o o o o o o o o o o o o Laws and Policies on Land and Environmental Lack of Single Window Clearances Licensing and regulatory delays Crowding out of Finances by Government High interest regime Half hearted opening of sectors with inbuilt protection to incumbents Lack of standardised contracts Harsh LD clauses Micromanagement Frequent and arbitrary changes in contracts No incentives for early executions Obligation beyond control of developers to be borne by them
o o o o o o
Achieving high and inclusive growth, Long gestation periods and high value investments, Global uncertainties and vulnerabilities, Lack of Skilled manpower, Lack of state of art equipments Effectiveness of deliveries, Execution Challenges Managing Finances in underdeveloped financial markets Money chasing the high returns
$ 500 Billion
$ 350 Billion
$ 150 Billion
Private Sources
$ 500 Billion
Procurement efficiency Construction management Design/construction/op eration management Monetizing investment profile Though fast moving technology (long-term contract) New sources FDI Local financial markets
Risk allocation
Innovation/te chnology
Finance
Private Involvement
Risk Transfer
Public Sector
ROI =
Cost 1 cost of project borne by private sector Cost 2 Cost of project assumed by public sector S Support from the government either in terms of tax breaks, incentives, credit, subsidies etc. Pr - Probability of realizing the forecasted incomes
The objective of the govt. would be to get the project implemented with cost 2=0 and S=0, objective of private sector would be to max ROI by minimising Cost 1, increase S
Full Privatisation
High
Private Participation
Low
Service Quality
Department or ministry mandated to cut any obstacles. Collapse a lot of ministries into it or house it in the PMO
Build national PPP Centres of Excellence Single window clearances and RoW and forest in scope of Government
Develop shadow private sector bid models and Standard Contracts and test them in Demos
Put realistic deadlines with sympathetic LD clauses, scope for negotiaions to parties who can bear them the best
Make commercial environment easy tax structure, GST, Long term infra bonds, take out financing,
Keep scope for Innovations and put less doctored specifications Time bound resolution of disputes