Chidambaram: Help at hand

New Delhi, July 25: The government will offer financial support to infrastructure projects developed on public-private partnership basis. It will also invest Rs 1,718 crore to set up five centres for automotive testing and homologation across the country over the next six years.

The cabinet committee on economic affairs today approved the proposal to give financial support to public-private partnerships (PPP) in building infrastructure with a suitable budgetary allocation to be made on a year-to-year basis.

“It will be a plan scheme to be administered by the finance ministry and operationlising the scheme for the PPP would lead to an increase in investment and improve the quality and service delivery,” said finance minister P. Chidambaram.

He pointed out that a provision of Rs 1,500 crore was made in the budget for 2004-05 and a similar one has been proposed in the budget for 2005-06 under the ‘assistance to infrastructure development’ plan in the demand for grants of the department of economic affairs.

To be eligible for this fund, projects have to be executed jointly through public-private partnership. It would include development, financing, construction, maintenance and operation of the project by an entity with at least 51 per cent private equity.

Projects in transportation, roads and bridges, railways, airports and inland waterways, power, urban development, urban transport and water supply, sewage solid waste management and other physical infrastructure in urban areas, will qualify for funding. The infrastructure projects in special economic zones, international convention centres and other tourism proposals will also qualify for funding under this scheme.

“The total viability gap funding under this scheme shall not exceed 20 per cent of the project cost. But the government or the statutory entity that owns the project may, if it so decides, provide additional grants out of its budget,” Chidambaram said.

The implementing agency must be selected through a transparent and open competitive process, he added.

Auto testing centre

The CCEA has also approved a proposal to set up the national automotive testing and research and development infrastructure project (NATRIP).

Full-fledged testing and homologation centres would be set up at Manesar in Haryana and at Kumbakonam near Chennai.