PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

Work of consultancy firms with government must be regulated


From UPSC perspective, the following things are important :

Prelims level: Na

Mains level: Consultocracy

Return of the 'consultocracy' – how cutting public service jobs to save costs usually backfires

Central idea 

The article explores into the growing reliance on consulting firms for policy formulation and program implementation in Indian government projects. It raises concerns about potential downsides, such as the hollowing out of government capabilities, excessive dependence, and the risk of lobbying and corruption scandals. While acknowledging the benefits, the author calls for a balanced approach, emphasizing the necessity of a regulatory framework to ensure fairness, transparency, and knowledge transfer.

Key Highlights:

  • Rise of Consulting in Government: Government projects, including major initiatives like Ganga cleaning and Swachh Bharat, heavily rely on consulting firms for policy formulation and program implementation.
  • Proliferation of Global Consulting Firms: Reports reveal that Indian ministries paid around Rs 5,000 million in fees to global consulting firms in the last five years, prompting the finance ministry to seek details of these engagements.
  • Concerns Over Dependence: There are concerns about a potential hollowing out of government capabilities due to excessive reliance on consultants, leading to mission creep, repeated redeployment, and potential lobbying for repeat work.

Key Challenges:

  • Hollowing of Government Capabilities: The unbridled use of consulting firms raises concerns about a decline in the skills and capabilities of government officials, potentially infantilizing government institutions.
  • Mission Creep and Dependence: Excessive dependence on consulting teams may result in mission creep, where routine functions are outsourced, and officials become overly reliant on consultants, risking a loss of institutional knowledge and skills.
  • Consulting-Related Corruption: The global trend of consulting firms influencing policy directions and engaging in lobbying raises concerns about corruption scandals and the distortion of public policy objectives.

Key Terms and Phrases:

  • Programme Management Units: Consulting firms often establish these units with broad mandates, attached to senior officials, leading to potential mission creep and dependence.
  • Consultocracy: A term coined to describe the permeation of consultants into the core of government, diminishing the traditional role and capabilities of public servants.
  • Digitisation of Public Service Delivery: The increasing complexity of public service delivery, including initiatives like the Direct Benefit Transfer program, demands specialized technical expertise.

Key Quotes and Statements for mains value addition:

  • “There is a tendency to farm out even routine functions like preparing file notes and letters.”
  • “The unbridled use of consultants reduces the skills and capabilities of officials, thus infantilising government.”

Key Examples and References:

  • Global Consulting Influence: Books like “The Big Con” and “When McKinsey Comes to Town” highlight concerns about the influence of consulting firms, even leading governments down amoral pathways.
  • Consulting in Indian Ministries: Reports indicate that Indian ministries paid substantial fees to global consulting firms in the last five years, prompting regulatory scrutiny.

Key Facts and Data:

  • Financial Transactions: Indian ministries paid approximately Rs 5,000 million in fees to global consulting firms over the last five years.

Critical Analysis:

  • Balancing Act: Acknowledges the benefits of consulting expertise in tackling complex challenges but emphasizes the need for a regulatory framework to prevent overdependence and potential pitfalls.

Way Forward:

  • Regulatory Ecosystem: Advocates for a comprehensive regulatory ecosystem addressing fairness, transparency, curbing rent-seeking behaviors, and ensuring knowledge transfer to government.
  • Calibrated Onboarding: Suggests a carefully calibrated onboarding of expertise from the private sector within a normative and transparent regulatory framework to enhance public service delivery.

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PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

Decoding asset monetisation


From UPSC perspective, the following things are important :

Prelims level: NMP

Mains level: Paper 3- How NMP is different from PPP


The National Monetisation Pipeline (NMP), a bold initiative was recently announced by the Finance Minister.

 PPP model and issues with it

  • BOT: The PPP was about attracting private parties to build, operate and then transfer ‘greenfield’ or new infrastructure projects under build-operate-transfer (BOT) concession agreements.
  • More risks for the private sector: The winning private bidder had to take not only the operating risk, but also the development and construction risk of the project, such as a toll road, from scratch.
  • Why it was prone to delays?:  It involved the acquisition of land. This process became controversial and was subject to delay.
  • It involved securing environmental and other regulatory approvals. These proved challenging to obtain.
  • Undermining the trust: Compliance with these became a source of friction between the concessioning authority and the concessionaire.
  • All this undermined trust between the public and private parties and led to a huge volume of disputes for which there was no readily available resolution mechanism.

How NMP is different from PPP?

  • Brownfield assets: The NMP is about leasing out ‘brownfield’ infrastructure assets such as an already operating inter-State toll highway under a toll-operate-transfer (TOT) concession agreement.
  • No land acquisition: In such an arrangement no acquisition of land is involved.
  • No construction risk: Nor does the concessionaire need to take any of the construction risk.
  • It is also certain to attract a different class of private capital.
  • To be successful in the BOT bids required a proven ability to navigate and manage the system.
  • Under the NMP, what will be required is operational experience in running a particular class of infrastructure assets and a strong understanding of the potential cash flows generated over the life of the concession.
  • This is certain to attract the largest global pension funds.

Way forward

  • Allow flexibility: Given the long tenure of these concession agreements, they must be designed to allow for some flexibility so that each party has the opportunity to deal with unforeseen circumstances (such as climate-related disasters).
  • Performance standards: Contracts must also incorporate clear key performance indicators expected of the private party and clear benchmarks for assets as they are handed over by the government at the start of the concession.
  • Ensure effective implementation: No matter how well a contract is crafted, it still needs to be implemented effectively.
  • No opacity in concessional agreements: Experience shows that there is a tendency for government departments to inject opacity so that they have more power over the concessionaire.
  • To avoid this, it would be useful if the responsibility for administering the concession agreements did not lie directly with the line ministries and/or their agencies.
  • Dispute resolution mechanism: It is vital to put in place a robust dispute resolution mechanism.
  • Institute for contracts: There is a strong case to set up a centralised institution with the skills and responsibility to oversee contract design, bidding and implementation.
  • An institution such as ‘3 PPP India’, first mooted in the 2014 Budget, is needed.
  • Set up tribunal: It would also be advisable to set up an Infrastructure PPP Adjudication Tribunal along the lines of what was recommended by the Kelkar Committee (2015).
  • Start with predictable sectors: The government could start with sectors that offer the greatest cash flow predictability and the least regulatory uncertainty before expanding the experiment.


The NMP significantly differs from the PPP model and seeks to avoid its shortcomings through various changes.

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PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

Consequences of asset monetisation on ordinary citizens


From UPSC perspective, the following things are important :

Prelims level: NMP

Mains level: Paper 3- Asset monetisation issues


In the Budget for 2021-22, the Finance Minister had announced the Government’s decision to monetise operating public infrastructure assets. The National Monetisation Pipeline (NMP) was unveiled, which shows that the Government intends to raise ₹6-lakh crore over the next four years by monetising several “core assets”.

Four issues with NMP

1)  Assets transferred would be performing assets and not idle asset

  • Strategic and significant asset: The Government has identified “performing assets” to transfer to private entities and these are both strategic and significant.
  • These include over 26,700 kilometres of highways, 400 railway stations, 90 passenger trains etc.
  • Moreover, existing public sector infrastructure in telecoms, power transmission and distribution and petroleum, petroleum products and natural gas pipelines are included in the NMP.
  • Under the NMP, the Government intends to lease or divest its rights over these assets via long-term leases against a consideration that can be upfront and/or periodic payments.

2) Consequences for ordinary citizens

  • There are two dimensions about the impact on common citizens.
  • Public as a stakeholder: The assets have all been created through substantial contribution by the tax-paying public, who have stakes in their operation and management.
  • Double taxation: These assets have, until now, been managed by the Government and its agencies,  which operate in public interest.
  • Therefore, charges borne by the public for using these assets have remained reasonable.
  • With private companies getting the sole responsibility of running all these assets, prices of these services will go up, as resutl the citizens of this country would be double-taxed.
  • First, they paid taxes to create the assets, and would now pay higher user charges.
  • Concern: Therefore, as the Government prepares to transfer “performing assets” to the private companies, it has the responsibility to ensure that user charges do not price the consumers out of the market.

3) Are there other avenues to plug the revenue gap?

  • Increase tax revenue: One possibility was to increase the tax revenue, for at 17.4% in 2019-20, India’s tax to GDP ratio was relatively low, as compared to most advanced nations.
  • Improvements in tax compliance and plugging loopholes have long been emphasised as the surest way to improve tax revenue, but little has been done, as the following example shows.
  • Since 2005-06, the Government has been providing data on the profits declared and taxes paid by companies that file their returns electronically.
  • Data shows that India’s large companies have been exploiting the loopholes for reporting lower profits and to escape the tax net.

4) Efficiency issue

  • According to NITI Aayog, the “strategic objective of the Asset Monetisation programme is to unlock the value of investments in public sector assets by tapping private sector capital and efficiencies”.
  • The NITI Aayog objective assumes that public sector enterprises are inefficient, which is contrary to the reality.
  • In 2018-19, while 28% of these enterprises were loss-making, the corresponding figure for large companies was 51%.

Consider the question “How asset monetisation is different from the privatisation? What are the issues with the National Manetisation Pipeline that seeks to monetise the assets?”


The government should address the issues mention here associated with the roll out of the National Monetisation Pipeline to make it a success.

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PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

The National Monetisation Pipeline may not help realise the best value for assets


From UPSC perspective, the following things are important :

Prelims level: NMP

Mains level: Paper 3- National Monetisation Pipeline


The Government has launched a National Monetisation Pipeline, or NMP  to sell the revenue streams of public assets over the next four years.

About NMP

  • Financing infrastructure: As outlined in the Union Budget, the NMP aims to mobilize resources for financing infrastructure.
  • Type of assets: The pipeline mostly includes railway stations, freight corridors, airports, and renovated national highway segments amounting to ₹6-lakh crore, or 3% of GDP in 2020-21.
  • The other two methods of raising resources are: setting up a development finance institution (DFI) and raising the share of infrastructure investment in the central and State Budgets.


1) Not different from Disinvestment-Privatisation (D-P)

  • Asset monetization as defined in NMP is the same as the net present value (NPV) of the future stream of revenue with an implicit interest rate (whether it is a sale or lease of the asset).
  • Missed targets: Since D-P proceeds (revenues) have seriously missed the targets almost every year, how believable are the NMP targets? And how are they likely to perform differently?
  • If the NMP attempt to shore up public finances, such distress (fire) sale would find it difficult to obtain a “fair value” for public assets.
  • Would the market not factor in the dire state of the economy in beating down the prices, as in any distress sale?
  • The NMP document seems silent on how to overcome past mistakes.

2) PPP mode of implementation

  • The NMP outlines mainly two modes of implementing monetization: public-private partnership (PPP) and “structured financing” to tap the stock market.
  • PPP in infrastructure has been a financial disaster in India, as evident from what happened after the economic boom of 2003-08.
  • After the 2008 financial crisis, many PPP projects failed to repay bank loans leading to the piling up of non-performing assets (NPAs) of banks.
  • Further, the bulk of the lending was too politically connected to corporate houses and firms.
  •  India is still reeling from the legacy of that period without any easy and credible solutions in sight.

3) Stock market crash threatens the success of InvIT

  • An Infrastructure Investment Trust (InvIT) is being mooted as an alternative means of raising finance from the stock market.
  • In principle, InvIT is much like a mutual fund, whose performance is largely linked to stock prices.
  • The disinvestment process began in 1991 in which the bundles of shares of public sector enterprises (PSEs) were sold by UTI in the booming secondary stock market to realize the best price.
  • However, as the market crashed in the wake of the Harshad Mehta scam, stalling and discrediting the disinvestment process for almost the entire decade.
  • Hence, it may be worth learning the lessons from the historical missteps before exploring the idea all over again by the current stock market boom
  • At present, the U.S. Fed committed to reducing its assets purchase program (known as quantitative easing), the “hot money” inflow that has fuelled Indian stock prices may dry up throwing up nasty surprises.

Thus, it seems unwise to anchor the acutely needed investment revival strategy on a discredited PPP model or on fickle Foreign Institutional Investors (FII) investment in a frothy stock market.

Suggestion: Monetise debt

  • With the financial system flush with liquidity with no takers for bank credit, finance the proposed investment — as envisaged in the Budget — by government borrowing.
  • With a negative 0.4% real interest rate (real interest rate is nominal interest rate minus inflation rate), domestic borrowing in home currency is a steal.
  • No Crowding out: Chances of crowding-out private investments are remote with a liquidity overhang in the market.
  • Low inflation risk: Inflation risk is also limited with little aggregate demand pressures (barring temporary bottlenecks due to localized lockdowns).
  • Rating downgrade risk:  If the debt is productively used to expand GDP (the denominator), rating downgrade risk due to the rising Debt-GDP ratio seems minimal.
  •  Moreover, rising external debt by fickle portfolio investors perhaps carries a greater risk to external instability.

Consider the question “How the National Monetisation Pipeline seeks to implement the asset monetisation? What are the challenges in asset monetisation?”


If reviving investment demand quickly is the real goal, debt monetisation seems a better option than asset monetisation.

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PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

Hybrid Annuity Model(HAM) for the benefit of the road sector


From UPSC perspective, the following things are important :

Prelims level: Working of HAM

Mains level: Paper 3- Hybrid Annuity Model and risks involved

The article explains the working of Hybrid Annuity Model in the road construction and the risks involved in the model.

Investment in road sector

  • The central government has set a target of increasing the investment in infrastructure to over Rs 111 lakh crore over the period FY20-FY25.
  • Within the transportation segment, projects worth Rs 36.7 lakh crore, constituting 55% of transportation infra, are for the road sector.
  • The large investments planned in the road sector signifies its importance—it has a multiplier effect on the economy and provides large employment opportunities.

Models for the road sector

  • Out of HAM (Hybrid Annuity Model) and BOT (Build, Operate and Transfer)—toll developers prefer the relatively lower risk HAM model.
  • This is due to its various positives like lower equity requirements, provision for mobilisation advances, better right of way availability, inflation-linked adjustments for bid project cost, termination payments during the construction period and de-linking construction and operations.
  • These HAM features have garnered a favourable response and mix of HAM awards has increased from 10% in FY16 to 48% in H1FY2021.

How HAM works and risks involved

  • During the operations period for a HAM project, the recovery from authority is in the form of fixed annuity payments along with interest on balance accumulated annuity payments (calculated @300 bps over prevailing bank rate)
  • The only major risk for HAM is the prevailing low bank rates adversely affecting the overall project viability and returns.
  •  Such interest receipts account for around 45% of total inflows.
  • Low bank rate would thus reduce the overall inflows for a HAM project, thereby adversely affecting its debt coverage metrics and returns to the investors.
  • The second problem is related to delayed and inadequate interest rate transmission—there is a transmission lag for the project loan (linked to MCLR of banks).

Changes in model concession agreement

  • As per revised concession agreement dated November 10, 2020, interest rate on annuities will be equal to the average MCLR of top 5 scheduled commercial banks plus 1.25% instead of bank rate.
  • With the average MCLR replacing the bank rate, there will be a natural hedge between the annuity inflows and interest costs,
  • This will reduce the interest rate risks to a large extent, and that too without any delay.
  • The other major revision is the grant payment from the authority which will now be paid in 10 instalments instead of five.
  • The other major revision is the grant payment from the authority which will now be paid in 10 instalments instead of five.
  • Thus, the spacing between the payment milestones is reduced.
  • This will improve the cash conversion cycle for the contractors executing the HAM projects as their payments are back to back in nature.
  • However, these changes will be applicable for new awards, and the fate of the existing HAM projects is hanging in the balance.


With improved attractiveness, HAM is expected to remain the mainstay for public-private partnership projects in the road sector.



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PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

The possibility of a two-front war


From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- The possibility of three-front war

The possibility of a two-front war has been debated for long in the Indian security establishment. However, the Galwan valley incident has added an urgency to that possibility. 


Two front situation

  • In the Indian military’s thinking, while China was the more powerful, the chance of a conventional conflict breaking out was low.
  • The Chinese intrusions in Ladakh in May this year, the violence that resulted from clashes have now made the Chinese military threat more apparent and real.
  • This comes at a time when the situation along the Line of Control (LoC) with Pakistan has been steadily deteriorating.
  • Between 2017 and 2019, there has been a four-fold increase in ceasefire violations.
  • The larger challenge for India’s military would come if the hostilities break out along the northern border with China.
  • In such a situation, it is unlikely that Pakistan would initiate a large-scale conflict to capture significant chunks of territory as that would lead to a full-blown war between three nuclear-armed states.

China-Pakistan relationship

  • China has always looked at Pakistan as a counter to India’s influence in South Asia.
  • There is a great deal of alignment in their strategic thinking.
  • Military cooperation is growing, with China accounting for 73% of the total arms imports of Pakistan between 2015-2019.
  • It would, therefore, be prudent for India to be ready for a two-front threat.

The dilemma for India: In resources and strategy

  • It is neither practical nor feasible to build a level of capability that enables independent warfighting on both fronts.
  • A major decision will be the quantum of resources to be allocated for the primary front. This is the dilemma of resources.
  • If a majority of the assets of the Indian Army and the Indian Air Force are sent towards the northern border, it will require the military to rethink its strategy for the western border.
  • This is the second dilemma.
  • Even though Pakistan may only be pursuing a hybrid war, should the Indian military remain entirely defensive?
  • Adopting a more offensive strategy against Pakistan could draw limited resources into a wider conflict.

Way forward

  • We need to develop both the doctrine and the capability to deal with this contingency.
  • Capability building also requires a serious debate, particularly in view of the country’s economic situation.
  • We need to focus on future technologies such as robotics, artificial intelligence, cyber, electronic warfare, etc.
  • The right balance will have to be struck based on a detailed assessment of China and Pakistan’s war-fighting strategies.
  • Diplomacy has a crucial role to play.
  • India would do well to improve relations with its neighbors so as not to be caught in an unfriendly neighborhood.
  • The engagement of the key powers in West Asia, including Iran, should be further strengthened.
  • Relationship with Moscow should not be sacrificed in favor of India-United States relations given that Russia could play a key role in defusing the severity of a regional gang up against India.
  • Political outreach to Kashmir aimed at pacifying the aggrieved citizens would help in easing the pressure from the western front.

Consider the question “India faces the possibility of a two-front war. What strategy India should follow to deal with such a challenge?” 


A politically-guided doctrine, comprehensive military capability, and exploring other options will help to deal with the China-Pakistan threat.

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PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee

Reviving the private investment in infrastructure


From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Declining private investment in the infrastructure and ways to boost it

Declining private investment in the infrastructure needs policy overhaul. The article suggests the changes in the policy and approach on the part of the government to achieve the sustainable 40 per cent private investment in the infrastructure. 

Declining private investment in infrastructure

Currently, private financing into the infrastructure sector has declined to around 20 per cent of the total funding.

Reasons for the decline are-

  • 1) the crisis in the non-banking finance sector.
  • 2) the financial challenges faced by infrastructure companies.
  • 3) the inadequately developed Indian market for infrastructure financing.
  • The Economic Survey 2017-18 has assessed India’s infrastructure financing needs at $4.5 trillion by 2040.
  • Reviving private investment flows into infrastructure to around 40 per cent will be key to attaining this threshold.

Actions need to be taken to revive the private investment in infrastructure

  • The Vijay Kelkar committee had put out a balanced report in 2015 on overhauling the PPP ecosystem, including governance reform, institutional redesign, and capacity-building.

Ramping up private investments in infrastructure will need action on two fronts:

  • 1) Refreshing institutions and policies for channelling financing.
  • 2) Providing a stable, durable, and empowering ecosystem for private players to partner with government entities.

1) Institutions and policies for channelling financing

  • Due to long-duration profitability cycles of infrastructure projects, successful PPP  requires stable revenue flow assurances and a settled ecosystem to investors over long periods.
  • This could be achieved means of policy stability, assurances possibly secured by law.
  • PPP contracts also need to provide for mid-course corrections to factor in uncertainties including utilisation patterns, as well as the creation of competing infra assets.
  • Government partners in PPP arrangements need to ensure that open-ended arrangement that might entail unforeseeable risk are minimised for the private investor, including aspects such as land availability and community acceptance.

2) Institution and policies for financing

  • There is a need to change the culture and attitude towards the conjoining of government entities and private partners.
  • Kelkar committee has stated that there needs to be an approach of “give and take” and the Government should avoid a purely transactional approach.
  • Government should avoid trying to minimise risk to themselves by passing on uncertain elements in a project — like the land acquisition risk — to the private partner.
  • This attitudinal change can be achieved by amending the Prevention of Corruption Act to encompass modern-day requirements, including factoring in the need for government agents to take calibrated risks while engaging with the private sector.
  • The private partners also need to be incentivised to focus on project outcomes, with guard-rails in place to discourage rent-seeking behaviour.
  • In sum, risk avoidance by the public entity and rent-seeking by the private partner are the twin challenges that need to be carefully addressed.
  • On the regulatory front, a compelling need would be to promulgate a PPP legislation which can provide a robust legal ecosystem and procedural comfort.

Consider the question “Declining private investment in the infrastructure has several implications for the economy. In ligh of this, examine the factor for such decline and suggest the measures to boost the private investment in the infrastructure.” 


After we emerge out of this pandemic, a focus area for public policy has to be the creation of a modern-day, sustainable and resilient infrastructure. . Designing a fresh approach and creating a stable policy environment that provides comfort and incentives to private investors will be key to attaining this goal.

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Kelkar Committee Report: Reforming the PPP


In the Union Budget 2015-16, Finance Minister announced that the PPP mode of infrastructure development has to be revisited, and revitalized. In pursuance of this announcement, a Committee was constituted to look into the issues.

The proposals include a provision for monetisation of projects, revamp of the model concession agreement and creation of a new institutional mechanism.

What was committee asked to look into?

  • Review of the experience of PPP Policy.
  • Analyse risks involved in PPP projects in different sectors and suggest optimal risk sharing mechanism.
  • Propose design modifications in PPP based on international best practices and our institutional context.
  • Measure to improve capacity building in govt for effective implementation of the PPP projects.

Why is there need to reform PPP framework?

Background: PPP contracts are typically of very high-value, often with huge capital and operating costs.

  • The emergence of risks not foreseen at the time of signing the agreement exposes such projects to potential distress, making them unviable for the developers and prompting demands for a renegotiation of the original terms.



How to manage risks in PPP projects?

  • Optimal allocation of risks across PPP stakeholders to boost investment.
  • Sector specific model concession pacts to capture interest of all stakeholders. 

What are the design modifications proposed by the committee?

The Kelkar panel has come out with clear-cut norms on resolving issues and clarifying norms on re-negotiation of contracts.

  • Formulate a national PPP policy and seeking Parliament’s backing for it to be effective.
  • It emphasised upon the need to establish independent sector regulators for faster implementation of infrastructure projects and swifter dispute resolution mechanisms.
  • The report stated that the PPP structure should not be adopted for small projects.
  • It added that the govt should encourage development of airports, ports and railways through PPP, by ensuring easier funding for projects with long gestation periods.

Let’s take a look at much deeper level about various specific dimensions of PPP framework and panel’s recommendation.

How to streamline the stalled projects?

Background: The Ministry of Statistics and Programme Implementation (MOSPI) says that 40% of all central govt infrastructure projects are behind schedule or have overshot their original cost estimates.

Panel’s view: Follow the example of the Ministry of Road Transport and Highways, and NHAI, which has taken several successful steps in reducing the number of stalled projects in the sector.

What are the institutions proposed in the report?

  • An Infrastructure PPP Project Review Committee be constituted.
  • It recommends creation of an Infrastructure PPP Adjudication Tribunal.

How to renegotiate the PPP contracts?

Background: More than 50% of PPP projects come up for renegotiation.

The panel has suggested extensive guidelines stipulating the reasons that form the basis for re-negotiation & those that should not be entertained as valid reasons.

The panel wants full disclosure of few items prior to the renegotiation:

  • Long-term costs
  • Risks and potential benefits
  • Financial implications for the govt

Panel has suggested formation of an independent body, like a renegotiation commission, which can oversee the renegotiation of model concession agreements across sectors.

What is panel’s view on Swiss Challenge method?

Swiss Challenge Method: It is a process of awarding contracts as any person with credentials can submit a development proposal to the govt, which will be made online and a second person can give suggestions to improve and beat that proposal.

The Panel wants Swiss Challenge method to be actively discouraged.

Reason: It brings information asymmetries in the procurement process and result in lack of transparency and in the fair and equal treatment of potential bidders in the procurement process.

Criticism: India’s ambitious plan to build new expressways across the country by adopting the ‘Swiss Challenge’ method has become uncertain.

Why report calls for changes in anti-corruption law?

The report calls for promptly amending the Prevention of Corruption Act, 1988

Reason: To differentiate between genuine errors in decision-making and plain corrupt practices.

What is panel’s view on 3P India?

Background: Finance Minister had announced the setting up of 3P India in 2014-15 budget with a corpus of Rs 500 crore.

The panel wants the revival of a defunct proposal to establish 3P India to support PPP projects. It can function as a centre of excellence, enable research, and review and roll out activities to build capacity

How to deal with private sector?

The private sector must be protected against the loss of bargaining power over long time spans. It has asked for comprehensive guidelines to be framed in this regard.

How to build capacity in PPP projects?

  • Strengthen 3 key pillars of PPP framework – governance, institutions and capacity.
  • Structured capacity building programmes for different stakeholders.
  • A national level institution to back institutional capacity building activities.

The report pitches for pragmatism, transparency and a business-like attitude for all stakeholders.


Published with inputs from Pushpendra 
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1 year ago

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