Quality Of Infrastructure Projects Research Articles

Project finance bank loans and PPP funding in India: A risk management perspective

The objective of the research article is to critically analyse the risks involved in funding of Public Private Partnership (PPP) projects by project finance bank debt in economies like India. The article establishes that PPP structures in India cannot achieve the desired objective of optimal risk sharing and mitigation in the light of lack of suitably priced instruments to mitigate political, regulatory and legal risks. Thus, expected cash flows for repayment do not build up. This results in a problem of over-leverage and subsequent decline in the asset quality of the banking book. In the light of Basel II recommendations, project finance loans will carry a higher capital charge for projects in sub-investment grades. This will increase systemic risk to the banking system as infrastructure portfolios may start giving negative returns, if the loan quality of infrastructure projects declines.

Framework for Quality Improvement of Infrastructure Projects

In order to achieve high quality that not only gives acceptable return value to society but also satisfies the needs of all the stakeholders of infrastructure projects, comprehensive understanding of issues pertaining to the quality of the project is needed. The aim of this study is to provide an overview the most common procurement methods used in constructing infrastructure transport projects and analyze how these methods contribute to the desired quality of the final product in relation to client competence. An on-line survey of construction actors was carried out to ascertain quality level of Swedish infrastructure transport projects and determinant factors of quality problems. An equal number of respondents indicated that the quality of infrastructure projects has either increased or remained same level over the past twenty years. Respondents also pointed out lack of client competence that is vital in realizing the desired quality level through proper procurement, monitoring and evaluation procedures. Public clients heavily rely on traditional design-build procurement that requires considerable client involvement of a project. Thus, the association of quality problems and lack of client competence may not be a mere coincidence but an overlooked outcome of current situation.