System needed to renegotiate infra PPP deals

New Delhi: Economic Survey has backed a "renegotiation framework" for complex cases to prevent public-private partnership (PPP) projects in the infrastructure sector from termination. This is significant considering that PPP projects are long-term in nature and renegotiation had been seen as a "moral hazard" as such an issue may be subject to audit.

Renegotiation framework is a structured process used by parties to revise existing contracts. It defines rules, objectives and procedures for negotiation, aimed at improving terms, reducing costs or adapting to new conditions while preventing disputes.




The survey said "a renegotiation framework for complex cases to prevent project termination is worth exploring. PPPs should be treated as evo-lving financial assets rather than one-time contracts frozen at financial close". It said govt could create predictable exit and restructuring pathways for stressed but viable projects.