Comments
This refers to “On poor response, Govt moves away from PPP model for roads” ( Business Line , May 23). The hurdles of acquiring land, mobilising resources and sustaining interest over long periods and vast stretches of land mass are so stupendous that road building would not be fascinating for the private sector.
Time and cost overruns are endemic to road projects. Passing the buck and finding fault with the “other” party in transactions have been the trends.
The Parliament Standing Committee’s reservations on the PPP model are understandable, especially in the light of poor response to the National Highway Authority’s bids.
After all, private sector could contribute money not from out of thin air but money raised from the same capital markets and by operating within the regulatory economic framework.
Road construction has been a happy hunting ground for big money but the work is slipshod almost everywhere. Since the activity is spread over wide geographical areas, it is rather beyond private organisations in general, unless they are highly organised corporate entities. The reality of the situation shows the experiment cannot succeed, at least for some more time. Slow-yielding and low-yielding infrastructure such as roads has a social angle linked with moderate profitability. The State should plan land-use, investment, and basic and housing services; connect them with jobs, schools, businesses and markets; and organise the financing through taxes by leveraging land and debt markets.
K. U. Mada
Mumbai
Home loan market
This refers to the editorial “What arbitrage?” ( Business Line , May 22) Difficulties do arise with two regulators pursuing two different channels of loan disbursement in the home loan market.
If there is a need for two regulators to serve customers in a more efficient manner and make the financial market more competitive, there should be a bifurcation between the RBI and the NHB.
Both may do business in their respective domain without crossover. Or else, a unified regulator should be put in place to look after the home loan business in India.
S. Lakshminarayanan
Cuddalore
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