Transport projects exposed to maximum COVID-19 risks
A total of 1,824 Public-Private Partnership (PPP) projects worth US$327 billion are in different stages of implementation in India as of March 2020, according to a report added to ResearchAndMarkets.com’s offering.
“Out of these approximately 57% of the projects fall under the transportation sector, which in turn, is exposed to maximum risk due to coronavirus outbreak,” said the report “Public-Private Partnership Projects Monitor in India 2020” released on 10 Dec 2020.
With reduced economic activity, due to the pandemic outbreak, PPP Projects (especially in the transportation sector) will experience considerable revenue growth challenges.
In most instances, the vulnerability scope and extent of this force majeure risk were not foreseen in PPPs that rely directly on revenues generated by user fees.
The major impact shall be witnessed by toll roads (lack of users due to lockdown) and airports (loss of gate fees, refueling fees, airport commercial concessions).
Even PPPs that receive revenue through the availability of payments might suffer in the long term, as the government faces a shrinking economy that will result in declining tax revenues and reduced budgetary allocations to honor the existing commitments to the contracts.
Recovery planning will only be effective if short-, medium- and long-term strategies are embraced that address necessary mitigation strategies for the coming months, said the report.
The coronavirus will most certainly offer new resilience opportunities for the stakeholders as the PPP market recalibrates, it added.
In the meantime, truly sustainable and resilient PPPs should be promoted to help mitigate the coronavirus’ impacts on vulnerable communities and those that are already grappling with them.
Companies mentioned in the report are: National Highways Authority of India; State Specific Water Resources Departments; Ste Specific Urban Development Agencies; Central Public Works Department; State Specific Public Works Department; NHPC Limited; NTPC Limited; Indian Railways; New Mangalore Port Trust; Navayuga Dhola Infra Projects Private Limited; Abellon Clean Energy Limited; Vizag General Cargo Berth Private Limited; Dhamra Port Company; Essar Limited; JITF Urban Infrastructure; A2Z Infra Projects Private Limited; Airports Authority of India; GMR Group; Reliance Infrastructure; TATA; IRB Infrastructure Developers; Dilip Buildcon and NEC Group. #investment #banking #infrastructure #projects #development /fiinews.com
