`PPPs hold promise of faster financial closures'

Mohan Padmanabhan

Core competence


The agenda

to promote PPPs aims at enhancing the quality and quantum of infrastructure services

The full

potential of public sector will be tapped assets and a fair share of benefits for stakeholders is ensured.

Kolkata, April 28

Development of urban infrastructure in India has been fairly "stop-gap" in the last few decades, and barring a few large projects in a handful of cities, paucity of urban infrastructure projects is glaring.

Writing on `Urban Infrastructure Sector in India, 2005,' in the India Infrastructure Report 2006, prepared by the 3iNetwork (IDFC, IIM, Ahmedabad and IIT, Kanpur), Mr Anupam Rastogi says that while city mass transport systems and airports have found place in developmental plans, essential services such as roads, drinking water, sewage management, drainage and primary health, have not yet come on the development radar.

While conceding that efforts are being made to develop urban infrastructure in a sustainable manner, Mr Rastogi says Government wants the Urban Local Bodies to seriously take up the planning and development of urban infrastructure. "The deluge in Mumbai (July 2005) was a reminder that decisions made by authorities without due regard for consequences can prove painful later on."

The Government is now putting in place a policy framework under the Jawaharlal Nehru National Urban Renewal Mission, which, according to Mr Rastogi, would allow large infrastructure projects to come up on Public-Private Partnership basis.

According to him, the country's agenda to promote PPPs for infrastructure development aims at enhancing the quality and quantum of infrastructure services, releasing the full potential of public sector assets and ensuring that stakeholders receive a fair share of benefits from the PPP projects.

He says the partnerships, backed by the proposed India Infrastructure Finance Company (IIFC) and the Viability Gap Fund Scheme, hold the promise of faster financial closure of infrastructure projects without overburdening the nation's public finances.

It is felt that in order to manage a complex PPP programme, the Government is leaning heavily on the project appraisal and prioritisation skills of financial institutions that are also partners in lending to infrastructure projects.

Mr Rastogi is confident that the IIFC, and the scheme to support PPPs in infrastructure would go a long way in construction of large infrastructure projects in the country. "A disturbing sign in the development of infrastructure in general, and PPP in particular is Government's inclination to curb the powers of regulators."

He feels that the need of the hour is to ensure that irrational policy measures do not take a toll on the pace of acceleration of reforms.

(This article was published in the Business Line print edition dated April 29, 2006)
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