Tuesday, September 23, 2008

Only Central & State Government must handle future metro projects...

This is the essence of an article in a news paper (23rd sep) written by E.Sreedharan (managing director of Delhi Metro Rail Corporation Ltd) to Montek Singh Ahluwalia (Deputy Chairman, Planning Commission, Government of India).


Already news came (on 30th Aug) in Economic Times that govt is willing to construct all future metro projects through BOT process. If this is true, private companies are the owners. The central Govt is just there to release funds. So there is a chance that they can extend the railway network thereby their properties near the project may increase to 2 to 3 folds.

Govt tries to charge less fares for the prosperity of the society and the private companies are not interested to take up the project unless they get high package amount. this may some times leads to losses for the Govt.

BOT projects are difficult to extend or repairs as each private company has their own way of constructing.

There is a chance of grabbing the valuable Govt lands for the construction. These all can be saved if govt involves, thereby ticket fares can be decreased so that purpose is served. In one Sentence, Govt have to handle large govt lands to private companies in the future if they nod for BOT projects as the private companies are the owners.

Conclusion: Only central & State Govt are the owners of future metro projects as BOT projects leads to more trouble in the future.

Both Central & State Govt s must involve in the metro projects. Only State Govt ownership also doesn't help much as it lacks the uniformity among the states.

This also helps to encourage the manufactures and producers in India.

Monday, September 15, 2008

BTO

I would like to add on the issue of What Rajesh told in class.
in context with doing a BTO.to go about doing a BTO , Build-Transfer-Operate. Building a infrastructure by the private sector and transferring it to public sector and the operation through the same private sector.
one thing when the Govt.raises the tax during transfer , can hold good, instead of private players raising the tax and getting vast opposition.
Also giving the operations and maintenance to the same private sector will be more efficient, than giving to another private player who might complain about the standards of the infrastructure and quality issues. also such a move would ensure quality standards, or other wise when two players one for building and another for operation might subsidize the quality at the cost of other.

Monday, September 8, 2008

PPPs in the USA

I recently read this article in the New York Times that talks about the perception of PPPs in the USA. The article makes for very interesting reading because almost all the issues mentioned are identical to those currently faced in India. For instance the article talks about opposition to private ownership of roads, reservations about government "selling out" to private companies and so on. Yet, the USA also seems to face the same problems with respect to crumbling infrastructure and lack of financial resources. Developed or developing country, PPP issues seem to be quite similar!