As PPP loses steam, CPCL relies on state for growth

“We have not been able to narrow down the reasons for the PPP mix not showing the desired results. However, the preference is either for public or private projects. If the choice is for public, the emphasis is on people, whereas in projects executed by private players, the focus is on profit, which is an outcome of efficiency.  

Once this mix happens, either profit or efficiency is compromised sometimes. Also, the arbitration in the PPP is skewed towards people. Since, not much change is possible and minor changes bring in the transparency issue into play, the PPP is no longer the ideal choice. Also, this appears to be a steel-like kind of structure without any scope for change,” the official said.  

In such a scenario, the industry bigwigs prefer government to create the infrastructure and then have processes like bidding after which the decision to bring in the industry is made. Noting that public-public partnerships are successful, the official said for a project, the state government would like to partner with a public sector undertaking such as ONGC. 

“Chennai Petroleum Corporation Ltd (CPCL), for instance, is seeking a partnership with the state for a particular project. So, that is working out well as even with flexibility, the issue of transparency does not arise. Litigations too  are taken care off,” the official noted. 

CPCL is coming up with a Rs 2,400 crore refinery project at Nagapattinam, which will give a fillip to the state’s economy. 

At a time when banks are not flexible to provide loans and industry also taking the stance of the government creating the infrastructure before it announces its business plans, such a PP model comes in handy, the official added.