I read this in ET today..... its good news.
The government plans to increase the funding for projects that are carried out via PPP mode under the JNNURM scheme. This is what we were discussing in class the other day- there was earlier little to incentivize the projects via the PPP mode.
Kamal Nath (Urban Development minister) has himself emphasized on the importance of PPP projects in India. Quoting him:"In our next urban renewal mission program, we propose that the central share in the case of PPPs will be enhanced by 20%".
This will be rolled out in phase-2 of the JNNURM. Although it does not guarantee better projects, in my personal view it will lead to increased capital inflows and better employment of technical knowledge.
The government plans to increase the funding for projects that are carried out via PPP mode under the JNNURM scheme. This is what we were discussing in class the other day- there was earlier little to incentivize the projects via the PPP mode.
Kamal Nath (Urban Development minister) has himself emphasized on the importance of PPP projects in India. Quoting him:"In our next urban renewal mission program, we propose that the central share in the case of PPPs will be enhanced by 20%".
This will be rolled out in phase-2 of the JNNURM. Although it does not guarantee better projects, in my personal view it will lead to increased capital inflows and better employment of technical knowledge.
2 comments:
Hey I too happened to read the same article in business standard two days ago. The 20% increase in share towards PPP projects under JNNURM would be provided on a VGF basis.
This is one of the small incentives created by the Central government to enhance PPP projects in urban areas.
The MTHL project is a classic example where the government has failed to obtain a PPP due to non-technical reasons like lack of state support. With lack of funds the executing authority MMRDA has decided to take grants from JNNURM in case it fails to get an annuity contract. Thus, overall whether the newly proposed change in Urban Renewal Mission program will be beneficial is a complicated answer.
This is good news. State support is arguably the most important factor in successfully executing a PPP.
I feel that the fact that these funds are going towards VGF is a smart move by the government, maybe we'll see some projects that are still gathering dust in the proposal stage get the influx of funds they've been needing to actually take off.
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