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  1. Infratweets: Need to reboot PPPs

Infratweets: Need to reboot PPPs

Budget 2015: The government has taken a long-term approach that is aimed at putting infrastructure sector back on track.

By: | Updated: March 4, 2015 6:19 AM
Union Budget, Union Budget 2015, Budget, Infrastructure, infrastructure sector, Indian Railways, Suresh Prabhu, Rail budget, Bullet Trains Budget 2015: The government has taken a long-term approach that is aimed at putting infrastructure sector back on track.

Budget 2015: Infrastructure Gets A Shot In The Arm: The government has taken a long term approach that is aimed at putting infrastructure sector back on the track. The slew of initiatives announced in Budget 2015 is expected to boost investor confidence, revive investment and facilitate fresh funding opportunities.

Tweet: 7 Infra boosters in Budget: 1. ^ Public Exp 2. NatInfraFund 3. Taxfree Bonds 4. Resetting PPPs 5. Plug&Play UMPPs. 6. Corp of Ports 7. Regul Reform.

Railways: A Challenging Task Ahead: The Railway Budget laid out an ambitious target of attracting Rs 1 lakh crore in investments through PPP ventures over the next five years. Railways Minister Suresh Prabhu is looking at alliances with states and PSUs, PPPs and long term debt financing from pension funds and multilateral agencies, to generate revenues for the cash-strapped Railways.

Tweet: Rly Budget recognises imperative to tap into external funding partnerships (both public & pvt) for huge capex needs. Now to operationalise.

A Silver Bullet For Infrastructure Sector?: As an alternative to bank lending, bullet bonds have been identified as a funding source for financing long gestation infrastructure projects.

Tweet: After Bullet Trains…..now Bullet Bonds for Infra sector. Bullet bonds are long-tenure instruments with servicing ballooned to later years.

States To Get Higher Share Of Central Taxes: The states’ share of central taxes has gone up from 32% to 42% following the finance ministry’s acceptance of the 14th Finance Commission recommendation. The move would enable going forward on the government’s stated policy of cooperative federalism.

Tweet: Misleading headlines by media hyping 42% devolution to states by 14th Finance Comm as against earlier 32%. Plan & NonPlan have got merged.
Tweet: With devolution at 42% by 14th Fin Comm and much more flexibility, incumbent on States now to take far more responsibility for Infra Devpt.

Focus On Public Utilities: The 14th Finance Commission’s call for installation of meters was accompanied by its recommendation to amend the Electricity Act so that penalties may be levied for delays in payment of subsidies by state governments.

Tweet: Loud & clear message: 14th Finance Commission ~ “100% metering of all electricity and water consumers be achieved in a time-bound manner.”

Economic Survey: Need To Reboot PPPs: According to the Economic Survey, projects worth Rs 8.8 lakh crore or 7% of GDP are stuck for one reason or another. It pointed out there is a need to reboot the PPP model and recommended the setting up of a high level committee to restructure PPP projects that have gone awry.

Tweet: Economic Survey endorses Independent Renegotiation Commission for challenged PPP projects – a suggestion we have been repeatedly making.

Wind Energy Gains Ground: The total renewable power installed capacity in India has reached 33.8 GW according to the Economic Survey. Of this, wind power dominates with 66% share followed by biomass, small hydro power and solar.

Tweet: Whilst ‘Solar’ grabs headlines, interesting to note that India was 5th in the world in 2014 in terms of wind-power capacity & additions.

Pushing For Accountability: The government proposes to restructure evaluation methods of projects. It also aims at setting up benchmarks to monitor the effectiveness with which ministries and agencies implement various programmes.

Tweet: Top echelons of bureaucracy likely to be upset with NITI AAYOG replacing ‘soft’ evaluation methods of projects with much more accountability.

—Vinayak Chatterjee is Chairman of Feedback Infra
His Twitter handle: @Infra_VinayakCh
A weekly selection of the author’s tweets— with a brief backgrounder—in the infra space, by Adite Banerjie

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