The Hindu Business Line : Public-private partnership schemes come in for stick

The Public Private Partnership scheme for the promotion of infrastructure projects, as propounded by the Union Government, came in for criticism from the Ministers of two eastern States at a seminar, Infra East 2006, organised by the Confederation of India Industry, Eastern region, here on Wednesday. The Ministers also expressed their reservations about the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) while addressing the issues relating to urban development and PPP in infrastructure in eastern India.

Mr Sushil Modi, Deputy Chief Minister of Bihar, expressed the view that the PPP needed a re-look as many of the bureaucrats responsible for the implementation of scheme themselves were not clear how to go about it.

Also, there should be an effective regulatory mechanism for the proper implementation of the scheme. PPP, he said, might have succeeded in respect of a few highway projects but it was yet to make any dent into other infrastructure projects.

Availability of funds

While the Centre might have sanctioned a huge amount under the JNNUMR, the actual availability of fund to the States left much to be desired. "The States demand for fund under this project will often be turned down on one pretext or another and there will be unending flow of queries", he said wondering if the delaying tactics was not one way of negating the funds.

Mr Ashok Bhattacharyya, West Bengal Minister for Urban Development & Municipal Affairs, emphasised the need for amendments to the existing PPP Act which, he felt, did not always serve the requirements of the day. PPP was supposed to bridge the resource gap but the experience so far in this regard left much to be desired.

The JNNURM, Mr Bhattacharyya felt, was targeted more towards mega cities and big metros ignoring the imperatives of uplifting the smaller towns.

Mr Hari Sankaran, Managing Director of IL&FS, said an investment at the rate of $175 million per day for next five years was needed only to bridge the present gap in infrastructure and if the country was to go beyond bridging the gap, the fund requirement would be even higher.

Nearly 50 per cent of the proposed investment would be required for the power sector and eastern States could give leadership in this respect.

The eastern States, he said, must create capacity to absorb at least $100 million worth of investment a day for the next five years.

Mr S. S. Kohli, Chairman of IIFCL, pointed out that his organisation sanctioned assistance for 32 projects in past five months but only one of them was from the eastern region. Most of the projects sanctioned were from western and southern regions. The bulk of the assistance sanctioned was for road projects, he said. He pointed out that financial institutions and banks were not forthcoming in providing funds for infrastructure projects. IDBI and ICICI having now become banks, their priorities have shifted.

Mr Hemant Kanoria, Vice-Chairman of Srei Infrastructure Finance Ltd, cited factors such as fragmented jurisdiction, multiple authorities and complex procedural requirements as deterrents to private sector participation in infrastructure. Also, the concept of "one-window clearance", had remained a pipedream, he said.

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