Change in Law – Evolving Dimensions of Infrastructure Contracts

Certain unique features of infrastructure projects distinguish them from regular commercial arrangements. The most recent legislative recognition of the fact that infrastructure services are public goods involving facilities that cannot be denied to citizens and invariably lack substitutes came in the form of the 2018 amendment to the Specific Relief Act, 1963. Invariably, infrastructure facilities are premised on concessions granted by the state (licences, mining rights, use of airwaves, rights of way, etc.). They involve large up-front capital investments (the National Infrastructure Pipeline for 2019-24 targets an investment of $1.4 trillion of which 70-80 percent will be debt) with long gestation periods (construction phase) and regulated returns. They comprise vital inputs to the economy (roads, telecom, airports, power supply), which have multiplier effects on GDP growth, and a negative impact when they are un- reliable or in shortage.

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