Finance ministry urges identifying projects for private partnerships
ECONOMY & POLICY

Finance ministry urges identifying projects for private partnerships

The finance ministry has instructed infrastructure departments to locate projects that have the potential for execution through private partnership, as conveyed by an informed individual.

The intention behind this action is to attract a larger amount of private capital into public infrastructure and to minimise the setbacks in project execution. The individual mentioned that there will also be a focus on enhancing the flow of funds into sectors like urban infrastructure, railways, and roads. In these sectors, private participation is either minimal or falls short of being impressive.

For the current financial year, the ministry is planning to introduce a new architecture for public-private partnerships (PPPs) and a standard model concession agreement (MCA) framework for various infrastructure sectors.

As per the anonymous source, "Although the government has taken significant measures to increase capital expenditure in recent years, it is also important to involve private entities more, given the substantial funding requirements in the infrastructure sector."

The proposed MCA framework will function as a standard reference document for different infrastructure departments and government-run entities. It will provide them with the necessary flexibility to incorporate clauses that are specific to their respective sectors. The main focus will be on ensuring that the projects are financially viable and attractive to private investors.

This move comes at a time when there is a gradual resurgence in broader private investments, with senior industry executives anticipating a widespread recovery in the year 2023-24.

The government is also encouraging central public sector enterprises (CPSEs) to increase capital expenditure without any delays.

In April 2020, a government task force working on the National Infrastructure Pipeline (NIP) had projected capital investments amounting to Rs 111 trillion by 2024-25. The distribution was expected to be almost equal between the Centre (39%) and the states (40%), followed by the private sector (21%).

However, due to the pandemic, the revival of private investments was postponed as companies deferred their expansion plans. Consequently, the government significantly increased its capital expenditure to stimulate economic growth, banking on its substantial multiplier effect.

Also read: 
Honer Homes unveils Rs 30 bn mega project, Honer Signatis  
Provident Housing launches Rs 20 bn Sustainable Living Project 


The finance ministry has instructed infrastructure departments to locate projects that have the potential for execution through private partnership, as conveyed by an informed individual. The intention behind this action is to attract a larger amount of private capital into public infrastructure and to minimise the setbacks in project execution. The individual mentioned that there will also be a focus on enhancing the flow of funds into sectors like urban infrastructure, railways, and roads. In these sectors, private participation is either minimal or falls short of being impressive. For the current financial year, the ministry is planning to introduce a new architecture for public-private partnerships (PPPs) and a standard model concession agreement (MCA) framework for various infrastructure sectors. As per the anonymous source, Although the government has taken significant measures to increase capital expenditure in recent years, it is also important to involve private entities more, given the substantial funding requirements in the infrastructure sector. The proposed MCA framework will function as a standard reference document for different infrastructure departments and government-run entities. It will provide them with the necessary flexibility to incorporate clauses that are specific to their respective sectors. The main focus will be on ensuring that the projects are financially viable and attractive to private investors. This move comes at a time when there is a gradual resurgence in broader private investments, with senior industry executives anticipating a widespread recovery in the year 2023-24. The government is also encouraging central public sector enterprises (CPSEs) to increase capital expenditure without any delays. In April 2020, a government task force working on the National Infrastructure Pipeline (NIP) had projected capital investments amounting to Rs 111 trillion by 2024-25. The distribution was expected to be almost equal between the Centre (39%) and the states (40%), followed by the private sector (21%). However, due to the pandemic, the revival of private investments was postponed as companies deferred their expansion plans. Consequently, the government significantly increased its capital expenditure to stimulate economic growth, banking on its substantial multiplier effect. Also read:  Honer Homes unveils Rs 30 bn mega project, Honer Signatis  Provident Housing launches Rs 20 bn Sustainable Living Project 

Next Story
Infrastructure Energy

REC Transfers HVDC Project to Power Grid

REC Limited has successfully handed over the Special Purpose Vehicle (SPV) for a High-Voltage Direct Current (HVDC) transmission project to Power Grid Corporation of India Limited (PGCIL). This strategic move aligns with the nation's objectives to strengthen its power transmission network. Key Highlights: Project Overview: The HVDC project, under the inter-state transmission system (ISTS) initiative, is a critical component of India's push toward robust and efficient electricity transmission. It aims to handle bulk power transfer across long distances while ensuring minimal losses. Role of RE..

Next Story
Infrastructure Transport

NF Railway Collaborates with IIT Guwahati

The Northeast Frontier (NF) Railway has signed strategic Memorandums of Understanding (MoUs) with IIT Guwahati to foster technological advancements and improve railway operations in the region. This partnership focuses on innovative solutions to enhance safety, efficiency, and sustainability in rail infrastructure. Key Highlights: Purpose of MoUs: The collaboration aims to leverage IIT Guwahati's expertise in technology and research for implementing cutting-edge solutions across railway operations. Key areas of focus include: Automation and digitization in maintenance. Sustainability initiati..

Next Story
Infrastructure Transport

Danapur Division Modernization Plans Revealed

The Railway Board has unveiled ambitious plans for the expansion and modernization of the Danapur Division, a critical hub under the East Central Railway. The initiative focuses on infrastructure development, enhanced passenger amenities, and operational efficiency. Key Highlights: Scope of Modernization: The Railway Board's blueprint emphasizes: Upgrading existing infrastructure to accommodate more passenger and freight traffic. Improving station facilities, such as platforms, waiting areas, and connectivity. Introducing advanced signal systems for safer and smoother operations. Freig..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000