Recent article in ET about The government's plans to 'overhaul' PPP framework came at right time when we were going through our module 1. We all must be agree on the presence of PPP practice in almost all sectors of infrastructure. sometime i wonder whether governments ( central & states) are thinking as if this is the only option. Though we must acknowledge the contribution of this system in overall infrastructure development in India, there is need to take review on this.
Planning commission is going to undertake study on PPP with case studies , two infra projects and two power sector projects possibly come up with some new recommendation in coming months. This has a background of few PPP projects are felling apart and many still struggling to even start.(Recently FM has cleared projects almost 1-lakh crore)
I have few questions ;
1. Why the companies like GMR,GVK, Reliance Infra are pulling out of such important projects worth almost 16,000 crores after allotment?
2. Who will be responsible for the delay in the projects and will it end in increasing the concession period which ultimately burden on common people (e.g. case of Toll collection on highway)?
There is one more example I would like to share. In Kolhapur dist ( Maharashtra state) PWD completed intra city road work through PPP. Toll rates had been fixed. But the concept of paying toll even inside your city brought ire among the citizen and they got united over not to pay toll in any case. fortunately all political parties were united in this decision! so nobody is paying toll as on date. Now matter is still pending with State govt.
In this case where is the 'PUBLIC' partnership? how will govt settle this issue? what if same episodes will occur in other projects?
As it is assurance from government to recover money invested by the private player, in such cases, government has to take the burden of repay. ( that too with interest)
Then what is the purpose of bringing private player in if government has to empty his own pockets ?
Do we need to restrict PPP model upto certain sectors? ex. power, railway, ports
Is it possible to try for actual public partnership in some projects where they are directly in contact i.e. water, waste, road,.?
Planning commission is going to undertake study on PPP with case studies , two infra projects and two power sector projects possibly come up with some new recommendation in coming months. This has a background of few PPP projects are felling apart and many still struggling to even start.(Recently FM has cleared projects almost 1-lakh crore)
I have few questions ;
1. Why the companies like GMR,GVK, Reliance Infra are pulling out of such important projects worth almost 16,000 crores after allotment?
2. Who will be responsible for the delay in the projects and will it end in increasing the concession period which ultimately burden on common people (e.g. case of Toll collection on highway)?
There is one more example I would like to share. In Kolhapur dist ( Maharashtra state) PWD completed intra city road work through PPP. Toll rates had been fixed. But the concept of paying toll even inside your city brought ire among the citizen and they got united over not to pay toll in any case. fortunately all political parties were united in this decision! so nobody is paying toll as on date. Now matter is still pending with State govt.
In this case where is the 'PUBLIC' partnership? how will govt settle this issue? what if same episodes will occur in other projects?
As it is assurance from government to recover money invested by the private player, in such cases, government has to take the burden of repay. ( that too with interest)
Then what is the purpose of bringing private player in if government has to empty his own pockets ?
Do we need to restrict PPP model upto certain sectors? ex. power, railway, ports
Is it possible to try for actual public partnership in some projects where they are directly in contact i.e. water, waste, road,.?
3 comments:
In case of delays, to the best of my knowledge, I guess the private contractor has to pay a fine, and the government should see that they don't try to retrieve the fine by increasing the toll prices(which should be set during the tender allotment).
In case of roads, I feel that the method of shadow toll collection should be put into practice. The reason government gets into PPP is because of sufficient funds or/and lack of technical competence. Once put into use, shadow tolling method wouldn't require commuters to pay the toll and would also put pressure on the private contractor to maintain the road properly, so as to get more traffic, leading to more payment, unlike in the case of BOT(annuity). And, this also would serve as some kind of a guarantee for the builder.
Pure public partnership? Sounds difficult. Infrastructure projects are far sighted and costly. The primary issue is migration, a lot of people will move in and out, so one won't get the true value of their money unlike in toll where one pays depending on the usage. Correct me if I got the wrong meaning of what you meant by public partnership.
Its great to have shadow toll collection in practise. But wouldn't there be a problem for government implementing it?? On one hand because of implementation of shadow tolls in some express-ways commuters will be commuting absolutely free of cost on the other hand how government will convince people who are already paying tolls according to the earlier PPP set ups wouldn't the commuters paying toll for those express-ways refuse paying at all??
It is quite frustrating that there are so many ways around the system. After spending so much money in Kohlapur, the loss to the private player must be huge if people are refusing to pay tolls. The fact that the government actually backed this up is something that would really shake up the confidence of private players wanting to go ahead with PPPs.
Post a Comment