A+| A| A-

The Increasing Incidence of PPP Project Cancellations in India

A spurt in the cancellation of public-private partnership projects in recent times can be attributted to macroeconomic crises, inherent problems in the water sector projects, and foreign sponsorship of these projects. Since giving the renegotiation relief to many of these projects seems to be problematic, cancellation is probably the only way for the government to elicit more realistic bidding from the private sector.

Twenty-six public–private partnership (PPP) road projects have been cancelled in India since 2013. With this, India has caught up with the worldwide average rate of PPP project cancellations1 (Table 1). While 4.7% of the 6,318 PPP projects were cancelled2 in developing countries worldwide during the period 1990–2014, India has seen 4% of its 834 PPP projects being cancelled in the same period. As a percentage of total investments, India has seen 4.7% of these investments cancelled compared to the worldwide rate of 4%.

Admittedly, these percentages seem low as “freedom to fail” is part of the reason to turn to the private sector in infrastructure provisioning. The low proportion of project cancellations could be because infrastructure projects acquire a resilience of their own once they are set up owing to concerns about service continuity (Tata Mundra Project), possible termination payments (Delhi–Noida toll road), and negative publicity surrounding these perceived failures.

To read the full text Login

Get instant access

New 3 Month Subscription
to Digital Archives at

₹826for India

$50for overseas users

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Intellectually fearless, never one to shrink away from a debate, baiting others to challenge his analysis, C P Bhambri was a formidable presence...

The COVID-19 pandemic has landed firms across the globe in an unfamiliar terrain.

The goods and services tax (GST) was rolled out across the country on 1 July 2017.

Early in the lockdown, India had relative control over curbing the potential spread of COVID-19, and may have prevented as many as five times more...

The National Education Policy, 2020 unveiled finally seeks to usher in major structural reforms in higher education. Among many measures,...

The COVID-19 pandemic and the resultant lockdown led to the closure of all markets in Manipur, including the Tribal Market Complex in Imphal East...

Coherent national strategies, backed by regional cooperation efforts, offer a way forward for economic recovery in South Asia, which is rapidly...

Sections 357 and 357-A of the Code of Criminal Procedure, 1973 lay down the procedure for granting compensation to the victims of crime. Under the...

The COVID-19 pandemic has provocatively challenged the extant paradigm of development whose theoretical underpinning is derived from the...

The first report of the Fifteenth Finance Commission has allayed many fears that arose after the notification of the terms of reference of the...

Back to Top