'States need to adopt Public-Pvt partnership model'

New Delhi, May 20: Stating that the country was loosing 1.5 to 2 per cent of GDP due to the infrastructure gap, Finance Minister P Chidambaram today called upon state governments to adopt the Public- Private partnership (PPP) model for bridging this critical lacunae.

"Some State governments have done extremely well in implementing the PPP model. We need to learn from each others experience." Mr Chidambaram said, inaugurating here a day-long conference of Chief Secretaries on Public-Private partnership in infrastructure.

The event, organised by the Planning Commission, is being held at Vigyan Bhavan. In the chair at the inaugural session was Planning Commission Deputy Chairman Montek Singh Ahluwalia.

The Finance Minister made a veiled criticism of the NDA government by implying that while it was well known that the key to development was infrastructure, not enough was done in this regard.

"In 1996 the India Infrastructure Report had brought out that 5 to 8 per cent of GDP needs to be invested in infrastructure. However, between 1997-98 and 2003-04 the investments made in infrastructure were less than 4 per cent of GDP," Mr Chidambaram said.

Mr Chidambaram said the Committee on Infrastructure, headed by the Prime Minister, had brought out the funds required for the development of various infrastructure sectors.

He said in the Highway sector needs an investment of Rs 2,20,000 crore by 2012. An amount of nearly Rs 40,000 crore was required by 2010 for the development of airports. And for the development of ports, investments to the tune of Rs 50,000 crore were needed.

A total investment of 150 billion dollar was required for building infrastructre.

The Finance Minister said as these mammoth resources were not available with the government, it was necesssary to engage the private sector. This was thus the importance of the PPP model.

Mr Chidambaram said it was not sufficient to put in place merely a well-designed framework of policies, but as much importance was the need to bring in transparency into them. The Finance Minister said successful projects need to be emulated and stressed the need to learn from each other. Some of the PPP projects that were singled out by the Finance Minister for their successfull design and operation were: Tirupur project in Tamil Nadu, Housing project in West Bengal, the urban infrastructure project in Gujarat, ports and road projects in Maharashtra, the Airports and port project in Karnataka and the road sector project in Punjab.

Mr Chidambaram bemoaned that the rate of investment had remained low in infrastruture and was much higher in China as well as some other Asian countries.

The Finance Minister said the NDC had mandated the adoption of the PPP model for the rapid development of infrastructre, He outlined the steps taken by the Union government to propel the build-up of infrastructure, including the viability gap funding and setting up of the Infrastructure Development Finance Corporation.

Mr Chidambaram asked the state governments to liberally avail of these facilities to kick-off the infrastructure sector, the lack of development of which is a key constraint to industrial development.

UNI