Rajiv Mishra: Clean Ganga projects will not affect IL&FS crisis

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At a time when the financial market is facing huge liquidity crisis, the Rs 10,000 crore worth PPP projects under the Namami Gange programme by the National Mission for Clean Ganga (NMCG) remains immune to the IL&FS default led troubles in the sector, a senior official said on January 30.

The new hybrid annuity based PPP model adopted by the government has not only created fresh interest among the private sector to bid, but has also prevented the projects from any possible delay in execution, NMCG Director General Rajiv Ranjan Mishra said here.

Of the 261 projects worth around Rs 25,500 crore, close to Rs 10,000 crore worth of projects are being executed under the hybrid annuity based model, he said on the sidelines of “Infra East” – organised by CII.

“The PPP projects which would be roughly to the tune of Rs 10,000 crore will not face any problem owing to these crisis,” Mishra said when asked about possible impact of IL&FS crisis on these projects.

Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries have defaulted on many debt instruments in the past few months due to insufficient funds.

Out of the Rs 10,000 crore, projects valued at around Rs 7,000 crore are under tendering, and Rs 3000 crore would get closed in a month or two, he said.

“Our projects are backed by the government and for the developers, there is not much risk. We are guaranteeing the payments and banks do not see much risk in these projects,” he said.

Assurance to get reimbursement of upto 40 percent of capital cost by completion of the project is an incentive to complete the project in time under the model.

Linking of remaining capital cost and maintenance to annuities over 15 years will be able to bind the concessionaire for continued performance, Mishra said.

Pan India, there are 136 sewerage related projects out of total number of projects, he said, adding that there are 20 sewerage projects in West Bengal worth about Rs 3700 crore.