Page 28 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) 23062 COPY.indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
nd
th
under RBI guidelines also. from Budgetary Resources. However with the
requirement of substantial funds for the desired
The list consists of five main categories viz
level of development and the limitations on
1) Transport and Logistics, availability of budgetary resources the Public-
Private Partnership structure was initiated for
2) Energy
construction of projects and financing by the
3) water and sanitation commercial banks/financial institutions. The
PPP structure involves arrangements among
4) Communication and the participants who are the stakeholders to
initiate, construct and operate infrastructure
5) Social and commercial infrastructure.
projects like Roads, ports and solar power
This definition includes 38 sub sectors projects.
like Roads and bridges, ports, electricity
generation, transmission distribution solid The main three stakeholders in a PPP structure
are discussed as under:-
waste management telecommunication
towers, affordable housing etc. The list has 1) Government Agency
been updated from time to time as per the Under the PPP structure the agencies
emerging requirements of the economy. like NHAI, SECI Etc. Assign thee project
The list is further proposed to be expanded of building and operating a particular
with inclusion of data centres and energy infrastructure asset to a private promoter
storage systems as announced in the budget
known as sponsor / developer of the
of 2022. The Companies Act 2013 also makes project. The assignment of responsibilities
a reference about infrastructure facilities in and rights is done through a contractual
schedule six this is in relation to Section agreement called concession agreement
55 and section 186 of companies Act which which inter alia contains detailed terms and
respectively provide for additional long term
conditions on which the private developer
period for issuance of preference shares and is required to work.
concessional conditions for Investments in,
subsidiaries under infrastructure sector. 2) Private Promoter/Developer
Income Tax Act 1961 also provides for certain The Private entity, which proposes to take up
concessions and deductions for investment in the responsibility of construction operation
infrastructure sector as defined under the Act. and maintenance of infrastructure project,
The RBI guidelines for financing Infrastructure is called the developer. The selection of
underline the importance of viability aspects developer is done through a transparent
and earning capacity of the project which mechanism with the past background of the
should be duly taken care of, for project under promoter and commercial considerations in
the infrastructure sector. mind. Generally, Special purpose vehicle
C. Public Private Partnership (PPP) in (SPV) is constituted as a separate company
Infrastructure to for construction of the project, to take
Infrastructure development was initially, in the care of efficient risk management, tax
aspects and to ensure better exit options
primary domain of the central government and
state governments for funding of the projects on completion of the concession period of

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