The Noida toll bridge, the original poster boy for public private partnership (PPP) projects in India, is in the news for the wrong reasons.
As Mint is reporting today, the bridge concessionaire may end up operating the bridge for 70 years, while the original mandate was for 30 years, thanks to a sweet clause that allows extensions. Under the contract, the operator is to get a guaranteed 20% return on the project cost. Shockingly, it turns out, if there is a deficit in the revenue target, this will be added to the project cost and the return calculated on the enhanced amount.
The government should come clean on all PPPs with similar clauses, lest it be accused of fostering crony capitalism. Cleaning up the PPP stables is important as the model holds great potential for developing cost-intensive projects. Such sweet deals give bad publicity to the PPP model, and the argument that the state must bear greater burden in what seem like?risky?projects?cuts?no?ice.