Private sector has to invest half of $1 trillion in infra in 12th Plan, Montek

Infrastructure
Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, has made clear that the GDP growth target of 8 per cent during the 12th Plan would have to be scaled down if the private sector fails to contribute half of the estimated $1 trillion investment in infrastructure development.
He urged the private sector to share and absorb the risks that are normally associated with model concession agreements under the PPP model and expressed his regret that private sector has done very little thinking on such agreements.
On the issue of non-delivery of statutory clearances on time for PPP projects, a clear thinking has to emerge on what a concession agreement should entail. He said that any penalty to be imposed on the government would be resisted within the government. He also urged the private players to figure out how “force majeure” provisions in concession agreements are to be handled. It is important to clearly spell out what exactly is needed to be built in by way of “force majeure” in contracts.
Most contracts contain force majeure provisions, although they are not generally considered in detail by companies when they are negotiating a contract. As they are drafted to cover unusual or unexpected events they are not frequently relied upon.

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