With inadequate infrastructure choking economic growth, the high-level Kelkar committee has suggested easier funding of projects taken up under the public private partnership mode, separate law for such ventures in health and urban transport and a dispute resolution tribunal.
The host of recommendations suggested by the eight-member Vijay Kelkar Committee, include review of the model concession agreements, allowing fund raising through zero coupon bonds and setting up of independent sectoral regulators.
It also suggested setting up of an Infrastructure PPP Project Review Committee (IPRC) to deal with the problems being faced by such projects.
"PPPs are an important policy instrument that will enable India to compress time in this journey towards economic growth and development. A successful and growing stream of PPPs in infrastructure will go a long way in accelerating the country’s development process," said the report, which was made public by the Finance Ministry on Monday.
The report was submitted by Kelkar to Finance Minister Arun Jaitley last month.
With regard to stalled PPP projects, the committee said: "There is an urgent need to evolve a suitable mechanism that evaluates and addresses actionable stress. Sector specific institutional frameworks should be developed to address these stalled infrastructure projects."
The report said there should be a better identification and allocations of risks between the stakeholders and contracts for the PPP projects should focus more on service delivery instead of fiscal benefits.
The committee also proposed to set up an Infrastructure PPP Adjudication Tribunal (IPAT) chaired by a judicial member (former SC Judge or HC Chief Justice) with a technical and financial member.
It suggested the IPRC should consist of one expert each from economics background and one or more sectoral experts preferably engineers, and legal experts.
The mandate of the IPRC would be to evaluate and send its recommendations in a time-bound manner upon a reference being made of "actionable stress" in any infrastructure project developed in PPP mode beyond a notified threshold value.
A statutorily established empowered multi-disciplinary expert institutional mechanism should deal with the complex issues involved, it said.
As regards the funding of PPP projects, it said "the Finance Ministry should allow banks and financial institutions to issue zero coupon bonds, which will also help to achieve soft lending for user charges in infrastructure sector".