Business Standard reports about various companies that have shown interest in PPP deal with Orissa government. Following are some excerpts from that report.

Internationally famed consultancy firm Ernst & Young and Kolkata based SREI are among a host of companies that have evinced interest to provide consultancy services for developing projects under Public-Private-Partnership (PPP) in Orissa.

These companies proposed to develop a shelf of projects to be taken up in PPP mode and have sought empanelment with the Orissa government. However, the government is yet to take a final decision on these proposals. Sources said, if it does not find any of the proposals suitable for its needs, the government may go in for an open bidding for selection of consultants.

… on the proposals of Ernst and Young and SREI.

Both the firms proposed to develop concepts to make the PPP projects attractive and investor friendly for the bidders.

Orissa had earlier entered into an arrangement with IL&FS as per which both shared the cost of developing the project up to the viability stage equally among them selves. This cost is later recovered from the successful bidders. Ernst & Young and SREI, however, have proposed not to charge anything for rendering consultancy service at the initial stage. They will only collect 1 percent of the project cost as their fee from the successful bidders of projects which actually get implemented.

This proposal is viewed favourably as the government does not have to bear any cost for failed projects as the expenditure incurred for these projects is borne by the consultants. The proposals are considered significant as in most cases, the potential investors are unwilling to take up projects in sectors like roads, ports, bridges citing their unviability as a major cause of concern.

Return on investment is the predominant factor in assessing the viability of the projects under PPP. Though there is a central scheme for viability gap funding up to 20 percent of the project cost from the Union government and the state government can also contribute some funds towards bridging the gap, in most of the cases the gap is too wide to be bridged.