The public-private partnership model in infrastructure sector has not worked according to expectations, Sindhushree Khullar, CEO, NITI Aayog, said on Thursday.
PPP “version 1.0” failed to take off with “higher risks being loaded” on to private players which they could not handle and also due to high lending rate, Khullar said.
She was speaking to reporters on the sidelines of the annual general meeting of the Bengal Chamber of Commerce and Industry.
The new PPP model, a hybrid annuity model, was introduced keeping in mind the roads sector. Under this model, some project costs were paid upfront; “which is then back-loaded”, she said.
Sources indicate that under the model, the government will provide funds for a part of the project cost so as to enable the contractor start work. The remaining investments are to be brought in by the private players. Upfront investments are recovered once the project starts generating revenue.
According to Khullar, the 12{+t}{+h} Five-Year Plan will continue as scheduled till 2017 and will run its full course. But Khullar maintained that no call has yet been taken on whether the “planning process” will continue or not. The governing council has to take the call, she said.
On the mid-term appraisal of the 12{+t}{+h} Five-Year Plan, she said, official level drafting was going on after which it would go to the full body of NITI Aayog. Unlike previous Five- Year Plans, there would no allocation of funds by the newly set-up agency.