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Sunday , 3 March 2024

PPP projects to become more flexible

The Ministry of Road Transport and Highways is considering giving more powers to lenders to revive interest among investors in public-private partnership (PPP) based road and highway projects. An example of this is the proposal to modify the Model Concession Agreement (MCA) for the road sector such that lenders can petition replacement of a concessionaire if it fails to meet standards and benchmarks, even before commencement of a project. This is in addition to the Ministry?s earlier proposal to relax the exit policy for highway concessionaires. At present, only the financial institutions have an active say in replacing a concessionaire who fails to meet standards, and that too only in the wake of a financial default. But this does not take into account the delays which occur due to the concessionaire?s delay in appointing road contractors, getting local-level clearances and planning a schedule for timely completion of roadwork.

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