During his first Union Budget in July 2014, former finance minister Arun Jaitley announced the setting up of an institution called 3P India, with an allocation of Rs 500 crore.
The intention was to mainstream public-private partnerships (PPPs) in India.
The plan was to bring together the capacities of the government and private sector to push PPP projects.
However, it never moved beyond the announcement stage. Now, that is — eight years later — something similar or, in fact, bigger has been set up.
The two infrastructure divisions of the finance ministry’s department of economic affairs have been moved out of North Block.
They have taken up bigger offices on Janpath Road, and got in people from multilateral institutions and the private sector.
The new institution is now called the Infrastructure Finance Secretariat (IFS).
One of the Secretariat’s most important tasks would be to rework the existing PPP policy and bring it in tune with the Modi government’s infrastructure push.
The new framework is expected to be out by the end of this calendar year, sources told Business Standard.
Apart from this, the new organisation will also work on various infra-financing issues like deepening municipal bond markets, real estate and infrastructure investment trusts (REITs and InvITs).
It would also deal with asset monetisation, dispute resolution and other myriad subjects.n official said the two divisions — Infrastructure Policy and Planning and Infrastructure Support and Development — have taken infrastructure consultants from Asian Development Bank, World Bank, and KMPG.
These experts will help enhance the capacity of IFS.
The IFS will continue to be a part of DEA with economic affairs secretary Ajay Seth as its head.
“You have the Centre’s capex push, the National Infrastructure Pipeline, the National Monetisation Pipeline, the GatiShakti portal and others.
“The idea behind this secretariat is to provide overall support in all these aspects.
“It would find ways to make infrastructure financing more effective,” said the official.
The IFS has been divided into three sections. Infrastructure Financing deals with REITS, INVITs and ways to enhance financing of projects and municipal bond markets.
It works with various infrastructure ministries on their monetisation plans.
The Sectoral Studies section looks at various issues in sectors like roads, Railways, power, telecom, airports and shipping.
It is also working on new dispute resolution solutions.
The Capacity Building section is tasked with carrying out training of state and central government officials as well as private sector participants on how to push project financing.
The main task of the IFS is the new PPP framework. PPP has had mixed success in India.
While it has worked relatively well for the roads and airport sectors, that has not been the case with shipping, railways, power, oil and gas infra, among others.
A big reason for this has been lack of exit and refinancing options and a dispute-resolution mechanism, which private sector players claimed went against them.
The new PPP framework is expected to resolve these issues with a revamped dispute-resolution mechanism.
It will have effective and investor-friendly guidelines, easier refinancing and credit options, among others.
For FY23, finance minister Nirmala Sitharaman has set a record capex target of Rs 7.5 trillion.
In a recent interview with Business Standard, Sitharaman had said capex spending in infrastructure projects with high multiplier effect continues to be the plank for the government to revive growth and demand.
The foundation of this capex is the Rs 111-trillion National Infrastructure Pipeline.
Moreover, the Rs 6-trillion National Monetisation Pipeline aims to unlock value in brownfield projects by engaging private participants.
It would transfer to them revenue rights while the ownership remains with the government.
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