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Interscience Management Review

Abstract

PPP projects have brought a big change in Indian Infrastructure Industry. There was not only a dramatic turnaround in the time taken for completion of projects but also a big change in quality of the projects. This change was because of involvement of a private player in the project. Though projects in the range of 500 crores, 1000 crores or even more than that was earlier handled by government departments but they always lacked with timely delivery and quality of projects. This was because of lack of planning and even because of lack of modern day tracking of projects. Now this gap was merged with the entry of a private player. There are glaring examples that this model has been a big success, be it RGIA of Hyderabad or modernization of Delhi and Mumbai airports, each of these projects has been a big success. It’s not only airport projects that has become successful even there are a lot of projects in road sector, port sector which have been completed in this model. The major issue with big infrastructure projects has been financing of these projects. Since in a PPP model private player also takes up the responsibility of financing the project with adequate support from government overall funding of the project becomes easier. But the problem does not seem to end over here because the private player which takes the responsibility of financing the project during initial stage also bears the risk of revenue generation which might be a big concern during operational phase. If the actual revenue falls short of projected revenue than the ROI will have a severe impact. In order to counteract these problems associated with various PPP models several risk mitigation strategies are adopted to safeguard both the parties in a better way. Though India has taken a huge step forward by awarding several projects in this PPP model still there is a long way to go in terms understanding the pros and cons of PPP model and how well it can be adopted in Indian scenario.

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