Infrastructure plays key role in economic development of the country and, in India, it has being increasingly recognized that Infrastructure development is inevitable for a sustained high growth rate in GDP. It has been recognized that there is a significant deficit in the availability of physical infrastructure across different sectors in the country, hindering economic development.
Inadequate and inefficient infrastructure not only adds to transaction costs but also prevents the economies from realizing their full growth potential. In this context, the Government of India has been focusing on development of infrastructure across country, which is evident in significant increase in allocation of funds for Infrastructure in the Eleventh Plan.
It is estimated that the total investment in infrastructure in the Eleventh Plan would be around Rs. 2,054,205 Crore (2 Million Crore) which yields an average of 7.55 per cent of GDP for the Eleventh Plan as a whole. Out of this projected investment, the Center, State and Private sectors are expected to contribute 34%, 30% and 36% respectively; which indicates an investment of Rs. 742,912 Crore (0.75 Million Cr) from the private sector. The growth of private investment in infrastructure is thus projected to grow to Rs. 208,413 in 2011-12.
Such level of participation from the Private Sector calls for:
- Reinforcement of the enabling environment for private participation;
- Improvement of the delivery of public sector projects;
- Adoption of standardized documents and processes for accelerating competitive investment flows;
- Leveraging budgetary resources & multi-lateral loans for PPPs;
- Accelerating the roll-out of PPP projects;
- Determined effort to create world-class infrastructure.
The Government Practise of Jones Lang LaSalle in the Unites States, have been operating in the PPP Advisory space for long through retainer arrangements with several government departments like the US Air Force; Dept. Of Veteran Affairs; General Services Administration Department; Port Authority of Oakland; Port Authority of New York etc.
In India, Jones Lang LaSalle has been operating in the PPP Advisory space through its Strategic Consulting Division since 2004; and has been instrumental in successfully closing a number of PPP projects, either as PPP Transaction Advisors or through developing a robust project structure through in-depth market assessment and feasibility studies, establishing the financial viability of the project, being involved in one-to-one briefing sessions with prospective investors, evaluation of project risks and developing contract documents to mitigate the same and create a mutually rewarding platform for both the public and private sectors.
The author, Saugata Maitra, is Senior Vice President – Strategic Consulting, Jones Lang LaSalle India
