Anand Singh Bhal, Economic Advisor, Mo UD calls for Renegotiation clause in PPP Projects at CII Realty 2014

“To give the much needed fillip to Real estate and infrastructure sector in India, ‘Renegotiation’ clause should be inculcated while awarding the Public Private Partnership (PPP) Projects to industry. This would help remove the major impediment to PPP projects, i.e the huge gap in the government’s mind set on one hand and the aggressive and ambitious strategies of the private sector on the other”, shared Mr Anand Singh Bhal, Economic Adviser, Ministry of Urban Development (MoUD), GoI while addressing Realty 2014 organised by Confederation of Indian Industry (CII), here today.

“Further, to encourage the industry to take up various infra projects under PPP mode, we are planning to bring in a system wherein initially just the management of various projects would be handed over to private sector and later, once industry is fully aware of the project details, full contract with Terms of Reference can be prepared and taken forward by the industry in afull fledged manner. This would save industry from the losses that they might have to suffer due to asymmetric information supplied by different Govt. Departments”, informed Mr Bhal, who is also the Chairman of PPP Committee of his Ministry.

“With the new regime at centre, which is pro-actively focusing on the implementation and capacity building part, we are hopeful that huge funds allocated earlier for infrastructure, lying unutilized due to incapacities at the state, district and MC level would soon be utilised. I am very optimistic that the new Govt would implement the infra projects under PPP mode, because Modi Govt feels that it is the only way to boost economy”, further added Mr Bhal.

On Smart Cities, Mr Bhal emphasised that “It can take approximately 25-30 years to build a single smart city. Hence the government should rather work to provide the smart features in various Indian ‘brownfield’ cities and make them ‘easy and smart’ to live in by use of ICT to provide public amenities and services under PPP mode. The key features could be Hi Tech Urban Transport with intelligent signalling, ticketing & tracking system; easy living with less of travel and more of mixed land use; proper water and sanitation and due importance to environment. This can however be achieved if and only if, all stakeholders like the industry, NGOs, institutes, state and central Governments, Municipal Corporations etc work together in one direction” emphasised Mr Bhal.

Mr Shreekant Somany, Deputy Chairman, CII NR and Chairman & Managing Director, Somany Ceramics Ltd congratulated the Honourable Finance Minister, Mr Arun Jaitly for presenting a budget of intent with significant focus on real estate and infrastructure sectors. Mr Somany said that in spite of the fact that some of the industry concern including infrastructure status to Real Estate sector has not yet been addressed; the current budget announcements will definitely help to start a long term positive trend for the real estate sector. Highlighting the need for a differentiated product that sustains quality over a period of time in retail segment Mr Somany said, “The retail sector of India is at an inflexion point where the growth of organized retailing and growth in consumption by the Indian population is going to take it to a higher growth trajectory in the coming decade”. Mr Somany further expressed his confidence that 10th edition of CII Conference on Real Estate – “Realty 2014” will help the industry to derive a realistic and viable roadmap for the Real Estate Sector.

Mr Anshuman Magazine, Chairman – REALTY 2014 and Chairman & Managing Director, CBRE South Asia Pvt Ltd, “The primary area requiring attention in the construction real estate sector is funding. Although the new government has announced the introduction of Real Estate Investment Trusts and Infrastructure Investment Trusts in the recent Union Budget, we are yet to see how that actually pans out on the ground. More than allocation of funds, timely implementation and capacity building are the need of the hour for the ease of transacting business in India’s Realty sector.”

Mr Mukund Vasudevan, Vice Chairman, CII Western UP Zonal Council and MD & Country Head, Pentair, “Growing real estate needs, supported by strong macroeconomic fundamentals will necessitate additional amount of liquidity into the system. Granting infrastructure status to some of the critical priority projects in the real estate sector is vital for the sector’s growth as building integrated townships, mass housing colonies, special residential zone etc are more or less the same as building large-scale infrastructure facilities. Building sector accounts for 30-40 percent of global Green House Gas emissions. The construction sector therefore needs to play a responsible role towards preservation of the fragile environment. In this regard, green buildings can play a catalytic role in addressing environmental issues and concerns.”

Mr Vineet Relia, COO, SARE Homes shared that the future Real Estate space belongs to those who use ‘Green’ technologies while building and give due importance to the environment.

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