Govt sweetens deal for pvt airport developers with new investment rules

Source: Business Standard, July 20, 2017

New Delhi: To attract more private players towards operating Indian airport projects, the government has made a policy change that will allow the private party to not have to make any capital investment in the project. Instead, the government–owned airport operator, the Airport Authority of India (AAI), will make the investment and the private player will share the revenue with AAI.

The decision is understood to have been taken after a high-level meeting between the AAI chairman and the Prime Minister’s office after private players appeared reluctant to participate in the bidding process for the operation and maintenance (O&M) of the Ahmedabad and Jaipur airports. Major airport operators said that the scope of revenue generation through only O&M of airport terminals was too low. The new model is likely to enforce more discipline among developers. Over the past decade, private airport operators have run up costs in excess of estimates and then had tariffs changed upwards to compensate. For instance, the cost of modernising the Delhi and Mumbai airports more than doubled to $3 billion each.

Crisil launches new credit rating system for infrastructure projects

Source: Business Standard, Jan 12, 2017

New Delhi: Rating agency Crisil on Thursday announced the launch of a new credit rating framework for infrastructure projects that would facilitate greater participation from long-term investors and lenders.

“Crisil, in consultation with the Ministry of Finance and other stakeholders, has developed a new credit rating framework for infrastructure projects that would facilitate greater participation by long-term investors and lenders,” the rating agency said in a statement.

Government looking at 6-year plan to upgrade airport infrastructure

Source: The Economic Times, Sept 12, 2016

NEW DELHI: Minister of State for Civil Aviation Jayant Sinha has told ET that the government is looking at a six-year plan to upgrade airport infrastructure, given that India’s metro airports are bursting at their seams, and are struggling to cope with the crush of passengers and choked runways. The upgrade is almost imperative as Indian airports are expected to cater to a billion footfalls over a decade from now, and airlines have announced mega aircraft induction plans that stretch up to a decade, the minister said.

“Looking at the passenger growth, we expect the size of the Indian aviation market to grow to about 600 million air passengers annually over 10 to 12 years from now.This would mean a billion footfalls at our airports. We are working with a strategy spread over a period of up to six years to ensure that capacity does not become an impediment to the growth in aviation in India,” Sinha told ET on Friday.

Road transport and highways ministry seeks Rs 13,000 crore soft loan for highways

Source: The Economic Times, Jan 21, 2016

NEW DELHI: The road transport and highways ministry is seeking a soft loan of Rs 13,000 crore from multilateral agencies for its highway projects. It has approached Japanese International Cooperation Agency (JICA) for a long-term untied loan of Rs 6,000 crore to part fund its National Highway Development Project (NHDP), an official said, adding that the remaining amount has been sought from Asian Development Bank (ADB) and it will also be used for special projects.

“We need support for certain projects under NHDP from external agencies. The projects we would be undertaking are not high traction ones. That’s why we are looking for easier loan repayment terms,” the official said.

Kelkar panel suggests easier funding for PPP projects

Source: LiveMint.com, Dec 29, 2015

New Delhi:A high-powered committee set up by the finance ministry to redraw the contours of the country’s public private partnership (PPP) model has recommended ending the one-size-fits-all approach in dealing with project-specific risks, and advocated independent regulators.

If the government signs off on the recommendations it would result in a major overhaul of the existing framework, designed primarily to incentivise private investment in infrastructure.

At present, a significant number of PPP projects have been stalled by legal disputes relating to financial issues. According to the Economic Survey 2014-15, at the end of December last year, the stock of stalled projects added up to Rs.8.8 trillion, or 7% of India’s gross domestic product.

Roads Ministry to unveil policy to compensate private investors

Source: The Economic Times, Oct 01, 2015

NEW DELHI: The government will soon unveil a compensation policy for private players investing in the roads sector, which will seek to compensate companies for any clearance related delays in projects. This will provide builders the comfort to invest in road building that is high on the government’s priority list.

“We’ll soon unveil a policy so that companies could be compensated for any clearance related delays,” Roads, Transport and Highways Minister Nitin Gadkari said on Wednesday. “Officials take 15 days’ time to sign on a project worth Rs 2,000 crore. I asked them what the interest cost is and what impact it would have. We should not lose on time,” he said.