In order to make a speedy resolution on disputes relating to public contracts or public-private partnerships (PPPs), the Prime Minister’s Office (PMO) has asked the Planning Commission to formulate a draft Bill on dispute resolution in infrastructure projects especially in the gas and road sectors. The proposed bill will be drafted in consultation with all stakeholders and ministries.
The PMO in its statement said, ‘dispute resolution in large public contracts is an area of growing concern and the Prime Minister has initiated the first steps in improving the institutional arrangement for dispute settlement’. The statement comes at a time when the government is aiming to get 50 per cent of the $1-trillion investment for infrastructure sector from private companies.
Further, the PMO admitted that there were concerns over the existing PPP mechanism as the private companies have been raising concerns over the responses they receive from project authorities about the obligations of project authorities leading to increase in costs, lower returns on investment and project delays. Thereby, it is essential to consider an institutional arrangement to address the disputes to provide assurance of speedy resolution, especially for large public contracts.
Investment in infrastructure projects involves huge capital, high incremental capital/ output ratio, high risks, low returns, long payback periods as well as superior technology. Therefore, the government has entered into the 'Public Private Partnership (PPP)' programme to bring in adequate resources for setting up of a sound and efficient infrastructural base.
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