tag:blogger.com,1999:blog-48885344660337610142024-03-07T01:30:42.440+05:30Infrastructure Planning and ManagementThis is a blog for the course "Infrastructure Planning and Management", offered at I.I.T-Madras, India. Students in this class will use this blog to discuss current issues relating to developments in the provision of physical Infrastructure.Mashhttp://www.blogger.com/profile/04915823544993018251noreply@blogger.comBlogger127125tag:blogger.com,1999:blog-4888534466033761014.post-47748309689865533612016-09-03T13:15:00.001+05:302016-09-03T13:15:49.500+05:30Another view on the Mylapore streetscape lecture - Opportunity vs Need<div dir="ltr" style="text-align: left;" trbidi="on">
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Most Infrastructure Projects are synthesized from public pain points. For example a flyover is built when decongestion becomes the need of the hour. New pipes are laid when there is shortage of water and so on. These projects would be championed by the public themselves as it has a direct effect and the media glorifies such initiatives. Netas consider these as feathers on their caps and leverage them as credentials.</div>
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Historically, Indian streets never had the concept of an organized street scape (more so in Mylapore which by itself is a historical place). You would find everything on Indian streets, ranging from flea markets, street food, hawkers, beggars to transformers (Kavitha pointed this out) and even garbage. And we have been happily living in this mess. In a broad sense, a better streetscape was never a burning issue for a developing country like ours and we had bigger problems to worry about, like shortage of everything (except people).</div>
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Kavitha's project intended to fundamentally change the idea of how the society looks at a walkway. She felt that the neighborhood deserved more - Much appreciated. However, this was opportunity based (not need based).</div>
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Now, lets consider Kavitha's mention of the "Car free Sundays" at Besant Nagar, which is a metropolitan locality (in contrast with the orthodox Mylapore). Perhaps Besant Nagar, with broad minded people, would possibly have accepted an opportunity based project.</div>
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Prof. Ashwin mentioned that this a stakeholder management issue and it clearly seems to be one. The thin line of difference between opportunity and need impacts the support received from parties involved. And this can make or break projects.</div>
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Other views are welcome....</div>
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Anonymoushttp://www.blogger.com/profile/00908344496854001300noreply@blogger.com7tag:blogger.com,1999:blog-4888534466033761014.post-44134047024213779652015-10-30T22:27:00.002+05:302015-11-01T18:04:23.480+05:30Is Amaravati a Utopian Dream??<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "Bookman Old Style",serif; line-height: 107%;">The relatively new born
state of Andhra Pradesh had the foundation laid for its new capital city of Amaravati
on 22<sup>nd</sup> of this month. The proposed capital region is spread about
an area of 7,420 sq. km and the capital city of 217 sq.km. It is the brain
child of its Chief Minister N. Chandra Babu Naidu, as he faces one of his
biggest challenge to construct the city. The master plan for the city was developed
by urban planning consultants Surbana International Consultants Pte. Ltd based
out of Singapore. They proposed an ambitious Seed Capital Area (SCA) Master Plan
for the capital city. Some of the key highlights of the plan are as under-<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">1)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">The SCA will house close to 3 lakh
residents. Being a vibrant business hub, close to 7 lakh jobs are expected to
be created<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">2)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">The plan also proposes to construct an integrated
network of Metro railway (12 km), Bus Rapid Transit (15 km), downtown roads (7
km), arterial and sub-arterial roads (about 26 km) and collector roads (about
53 km).<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">3)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">The plan is to construct a city with
world class aesthetic appeal but adhering to the sustainable green principles
with extensive open green spaces<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">4)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">Special emphasis has been laid on the
‘pedestrianisation’- with development of 25 kms of walkways linked to open
green spaces to promote a ‘walk to work environment’<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo1; text-align: justify; text-indent: -18.0pt;">
<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">5)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">A dedicated freight corridor and
establishment of 7 industrial zones have also been proposed. A total of 938 kms
of roads have been proposed<o:p></o:p></span></div>
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<span style="font-family: "Bookman Old Style",serif; line-height: 107%;">While every resident of
the state including me will be excited to see a ‘‘Singapore’’ level at Amravati
and so does its Chief Minister, he and his team have their task cut out. In
this blog I want to discuss about the challenge the state faces in raising
capital.<o:p></o:p></span></div>
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<b><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">Funding-
</span></b><span style="font-family: "Bookman Old Style",serif;"><span style="line-height: 107%;">Any
project in this capacity requires a large amount of capital especially since a
new city is to be constructed. One option for the CM and his team is to go in
for a PPP model. But again PPP projects on such a large scale have not been
constructed in India. Moreover the roadblocks faced by the present HMRL project
(PPP) in the </span><span style="line-height: 17.12px;">neighboring</span><span style="line-height: 107%;"> state has not gone down too well for the private
sector. Also given that the project is slated for completion in the year 2050,
its too long a call for any private company.<o:p></o:p></span></span></div>
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<span style="font-family: "Bookman Old Style",serif; line-height: 107%;">The Centre has promised
a sum of Rs. 60,000 crores as per the recommendations of the 14<sup>th</sup>
Finance Commission. In addition to paying the farmers for the compensation of
their land, a huge deficit still exists. So how does the CM look to raise money
for his ‘dream’ Project in addition to the state allocated budget and
institutional borrowing? Some of the options he could avail are-</span></div>
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<span style="font-family: Symbol; line-height: 107%; text-indent: -18pt;">·<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><span style="font-family: 'Bookman Old Style', serif; line-height: 107%; text-indent: -18pt;">He can look into the option of Corporation
investment from big companies along the industrial corridor in and around Amaravati
(Vijayawada and Guntur). Companies can be encouraged to develop infrastructure
in select pockets near their establishments by providing incentives such as
free land, water and electricity.</span></div>
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<span style="font-family: Symbol; line-height: 107%; text-indent: -18pt;">·<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><span style="font-family: 'Bookman Old Style', serif; line-height: 107%; text-indent: -18pt;">Already a lot of investment is coming
from Telugu Association of North America (TANA), the largest association of Telugu
people living outside India. They are raising funds through campaigns like ‘My
Brick-My Amaravati’ wherein donations are being accepted for buying bricks (at
Rs 10 a brick)</span></div>
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<span style="font-family: Symbol; line-height: 107%; text-indent: -18pt;">·<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><span style="font-family: 'Bookman Old Style', serif; line-height: 107%; text-indent: -18pt;">The Chief Minister has already embarked
on a journey to bring in investment from IT companies, like he did when he was
the Chief Minister of the then Andhra Pradesh. </span><br />
<span style="font-family: 'Bookman Old Style', serif; line-height: 107%; text-indent: -18pt;"><br /></span>
<span style="font-family: 'Bookman Old Style', serif; line-height: 107%; text-indent: -18pt;">So a lot depends on the Chief Minster himself and he needs to sail through the next election to come to power for another term in order to see his dream city take shape</span></div>
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<b><span style="font-family: "Bookman Old Style",serif; line-height: 107%;"><br /></span></b></div>
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<b><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">References</span></b></div>
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<br />
<div class="MsoListParagraphCxSpFirst" style="text-align: left; text-indent: -18pt;">
<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">a)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;"> </span></span><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">http://www.livemint.com/Politics/pJXIgjMM8849rTBxJDjiyL/Is-Amaravati-Chandrababu-Naidus-biggest-challenge-yet.html<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">b)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">http://indianexpress.com/article/explained/andhra-pradeshs-new-capital-amaravati-in-chandrababu-naidus-capital-idea-desire-to-impress-connect/<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpLast" style="text-align: left; text-indent: -18pt;">
<!--[if !supportLists]--><span style="font-family: "Bookman Old Style",serif; font-size: 12.0pt; line-height: 107%; mso-bidi-font-family: "Bookman Old Style"; mso-fareast-font-family: "Bookman Old Style";">c)<span style="font-family: 'Times New Roman'; font-stretch: normal; line-height: normal;"> </span></span><span style="font-family: "Bookman Old Style",serif; line-height: 107%;">http://indiatoday.intoday.in/story/chandrababu-naidu-amaravati-capital-challenge/1/455244.html<o:p></o:p></span></div>
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<span style="font-family: "Bookman Old Style",serif; line-height: 107%;"> <b style="font-size: 12pt;"><o:p></o:p></b></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4888534466033761014.post-64578057093535848992015-10-13T01:33:00.000+05:302015-10-13T01:35:35.838+05:30Bujagali Hydropower Project: A social challenge <div dir="ltr" style="text-align: left;" trbidi="on">
Bujagali hydro power plant was much needed project as per the government which might not be the case as that fund could be used for other development programs which can show up result earlier than a power plant since Uganda is poor country. But let us assume that the project was needed to be done. now there were many flaws:<br />
<ul style="text-align: left;">
<li>No feasibility and project study was done by the government or authorities even though this is considered as the most important step in any project.</li>
<li> Government just decided that we need to do the project and privately selected the company for the same, no transparency and competitive bid was involved which could have ended in much more reasonable prices </li>
<li>World bank known for its support for the socially relevant project played an important role and decided to finance the project with the help of different agencies, but WB itself did not do any studies or any member was involved in any of the committee which did the studies which made WB rely on the report which will be sent by the third party. That created problem when NGOs started protesting and WB did not had its own reprt so it got confused who is right here. </li>
<li>Here the biggest challenge was the social impact which was linked with economics of the country also. I realized here that the physically resettlement is not always the option as there are cultural and emotional or economical factors are also involved which are attached with the place where they live.</li>
<li>Since the EIA was done when project was allotted and was done by the AES. There is high probability that it will show it as good project to get the finance. This was 2500 pages report which is hard to read also.</li>
<li>A comprehensive study of the project with member from the WB, government and company would result in a good DPR which will help project to go along.</li>
</ul>
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4888534466033761014.post-45497442690667073252014-11-20T11:46:00.002+05:302014-11-20T11:46:51.774+05:30Way ahead for sustainable financing in Indian Infrastructure<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="margin-bottom: .0001pt; margin: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: Arial, sans-serif; font-size: 11pt;">Sustainability is a mix of <b>Social </b>sustainability, <b>Economic
</b>Sustainability and <b>Environmental </b>Sustainability<o:p></o:p></span></div>
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<span style="font-family: Arial, sans-serif; font-size: 11pt;"><b>Social </b>Sustainability is achieved by providing infrastructure
services to the socially deprived sections. Viability Gap funding (VGF) which
enables funding for projects which would not be economically feasible is a way
ahead to achieve social sustainability. VGF is funded through money earned by Government
from commercially viable projects through Negative funding. In Germany, a
certain percentage of work in a project should be handled by socially deprived
sections of the population. This kind of work allocation in India will develop
the socially weak sections of Indian society.<o:p></o:p></span></div>
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<span style="font-family: Arial, sans-serif; font-size: 11pt;"><b>Economic </b>Sustainability is possible by New Public Management (NPM)
principle of PPP where the private parties are encouraged to finance
Infrastructure relieving the Government of fiscal deficit. An alternative
funding source, Foreign Direct Investment (FDI) is subject to political and
financial risks and FDI players are averse to invest in India. In such cases,
developing the domestic finance market is the way to sustainable
financing. Real Estate Investment Trusts (REITs) incentives and
Infrastructure Investment Trust (INVIT) proposed in budget 2014 are welcome
moves towards achieving sustainable funding in India.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Arial, sans-serif; font-size: 11pt;"><b>Environmental </b>sustainability can be achieved when banks adopt
Equator Principles. <span style="background: white;">A move in this
direction was initiated by Infrastructure Development Finance Company (IDFC) in
2013 when it adopted the equator principle. IDFC is India’s leading finance
player and the first to adopt Equator Principles. However, sustainable funding
can be ensured only when all banks adopt them. Also, there should be banks
which exclusively finance sustainable projects to speed up sustainable
constructions in India. UK’s Green Investment Bank (GIB) lend to investors who
work on renewable energy projects. Another way to go ahead is tie up with
foreign institutions to learn from them. </span></span><span lang="EN-US" style="background: white; font-family: Arial, sans-serif; font-size: 11pt;">In 2014, India and German KfW
Development bank signed loan agreements for sustainable development of Tamil
Nadu<span class="apple-converted-space"> </span></span><span lang="EN-US" style="font-family: Arial, sans-serif; font-size: 11pt;">towns.</span><span style="font-family: Arial, sans-serif; font-size: 11pt;"><o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">References<o:p></o:p></span></div>
<div class="MsoNoSpacing" style="margin-left: 38.25pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;">1.<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;">"IDFC"
Sustainable Infrastructure Development
and Environment Management. Web. 7 Nov. 2014.
<http://www.idfc.com/our-firm/environment_management.htm>.<o:p></o:p></span></div>
<div class="MsoNoSpacing" style="margin-left: 38.25pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;">2.<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;">The
Greening of Infrastructure Finance, Insight magazine, Issue No. 2, Spring 2012<o:p></o:p></span></div>
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<div class="MsoNoSpacing" style="margin-left: 38.25pt; mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<!--[if !supportLists]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;">3.<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal;"> </span></span><!--[endif]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;">German
Embassy, New Delhi, 2014, “Germany India sign agreement for sustainable
infrastructure development”
<http://www.india.diplo.de/Vertretung/indien/en/__pr/Business__News/Kfw__2014.html><o:p></o:p></span></div>
</div>
Unknownnoreply@blogger.com10tag:blogger.com,1999:blog-4888534466033761014.post-73839575374473648292014-11-13T15:38:00.001+05:302014-11-13T15:38:47.163+05:30Meeting the $1 trillion investment in infrastructure<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Arial, Helvetica, sans-serif;"> AIIB which stands for Asian Infrastructure Investment Bank was launched last month on 24th october 2014. I think that this bank along with the BRICS bank would pose a major challenge to the Bretton woods twins the IMF and the world bank and it has possibility of <b>boosting the growth rate in infrastructure</b> in India.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<br />
<span style="font-family: Arial, Helvetica, sans-serif;">World Bank<b>:</b>US dominated bank</span><br />
<br />
<ul style="text-align: left;">
<li><span style="line-height: 24px;"><span style="font-family: Arial, Helvetica, sans-serif;">United States is discouraging the World Bank from lending to coal-based power projects in the asia.</span></span></li>
</ul>
<br />
<span style="font-family: Arial, Helvetica, sans-serif;">IMF:Europe led bank</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">ADB(Asian development bank):Japan dominated bank</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;"><b>BRICS</b> new development bank: </span><br />
<br />
<ul style="text-align: left;">
<li><span style="line-height: 115%;"><span style="line-height: 24px;"><span style="font-family: Arial, Helvetica, sans-serif;">At least 25 per cent of our power generation capacity over the next decade is based on Chinese equipment import. This means roughly $30 billion (about Rs 180,000 crore) of power equipment could be imported from China. </span></span></span></li>
<li><span style="line-height: 115%;"><span style="line-height: 24px;"><span style="font-family: Arial, Helvetica, sans-serif;">The BRICS bank could also offer <b>cheaper loans</b> for such power projects in BRICS countries.</span></span></span></li>
</ul>
<br />
<span style="font-family: Arial, Helvetica, sans-serif;"><b>AIIB:</b></span><br />
<ul>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Asian
development bank lends not more than $10 billion a year while asia needs $800
billion of investment in infrastructure annually between now and 2020</span></li>
</ul>
<div>
<span style="font-family: Arial, Helvetica, sans-serif;">Why this BRICS and AIIB are good for India?</span></div>
<div>
<ul style="text-align: left;">
<li style="box-sizing: border-box; line-height: 1.8;"><span style="font-family: Arial, Helvetica, sans-serif;">12th Five year plan says we need $1 trillion dollar investment in infrastructure. Few<span style="background-color: white; color: #333333; line-height: 28.7999992370605px;"> billions dollars we get as ‘soft loan’ from AIIB, BRICS bank is help in achieving this plan.</span></span></li>
<li style="box-sizing: border-box; line-height: 1.8;"><span style="background-color: white; color: #333333; line-height: 28.7999992370605px;"><span style="font-family: Arial, Helvetica, sans-serif;">India is 2nd largest stakeholder in AIIB, so it has large voting power and help India in getting loans according to its interest</span></span></li>
<li style="box-sizing: border-box; line-height: 1.8;"><span style="background-color: white; color: #333333; line-height: 28.7999992370605px;"><span style="font-family: Arial, Helvetica, sans-serif;">Cheaper loans</span></span></li>
</ul>
</div>
<div>
<br /></div>
<div>
<span style="color: #333333; font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 28.7999992370605px;"><br /></span></span></div>
<div>
<span style="color: #333333; font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 28.7999992370605px;"><br /></span></span></div>
<div>
<span style="font-family: Arial, Helvetica, sans-serif;">reference:</span></div>
<div>
<span style="font-family: Arial, Helvetica, sans-serif;">http://www.rediff.com/news/column/how-brics-bank-can-affect-world-economics-and-politics/20140718.htm</span></div>
<div>
<a href="http://www.livemint.com/Politics/tjdx86kAvM1Q9TjfAFyrFJ/China-launches-World-Banks-rival-AIIB-in-Asia.html?utm_source=ref_article" style="background-color: #efeee4; color: #f1592a; text-decoration: none;"><span style="font-family: Arial, Helvetica, sans-serif;">http://www.livemint.com/Politics/tjdx86kAvM1Q9TjfAFyrFJ/China-launches-World-Banks-rival-AIIB-in-Asia.html?utm_source=copy</span></a></div>
</div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-4888534466033761014.post-35730775228389960462014-10-27T15:20:00.002+05:302014-10-27T15:21:56.540+05:30Accountability issues in PPP<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "Arial","sans-serif";">We have
been seeing of late in New Public Management (NPM) about the changes required in Government’s role. A number of stages are required to get
an approval for a project. Government tends to keep the <b>process</b> intact rather than the <b>end
result</b>. All this is done to keep the government machinery accountable.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Accountable to.. </span><span style="font-family: Arial, sans-serif;">(Willems & Dooren, 2011)</span></div>
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<ol style="text-align: left;">
<li style="text-align: justify;"><span style="font-family: Arial, sans-serif; text-indent: -18pt;">Political mechanisms – future elections,
political debate, questions of opposition</span></li>
<li><span style="font-family: Arial, sans-serif; text-indent: -18pt;">Judicial review – questioning by the
courts</span></li>
<li style="text-align: justify;"><span style="font-family: Arial, sans-serif; text-indent: -18pt;">Superior authority – chain of
hierarchical command, government auditors, regulatory bodies, ombudsman</span></li>
<li><span style="font-family: Arial, sans-serif; text-indent: -18pt;">Groups – Citizens, Interest groups
(NGO’s)</span></li>
</ol>
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<div class="MsoNoSpacing" style="text-align: justify;">
<span style="font-family: Arial, sans-serif;">In India,
the ‘5 C’s and 1 M’ which question government decisions are CBI, CVC, CAG, CJI and CIC.
The M is of course Media (governancenow.com)<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";"><br /></span></div>
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<span style="font-family: "Arial","sans-serif";">Now, the
account holders (people, judiciary, authority) concentrate on the process and
not the performance of accounting. It has become easier to hold someone
<b>accountable for a 'failure in finance and fairness' rather than on a 'failure in performance'</b>. <o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">What is
required now is a change looking at efficiency and value for money.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif";">Few
solutions in this regard as mentioned in (Forrer et.al, 2010) are</span></div>
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</div>
<ol style="text-align: left;">
<li style="text-align: justify;"><span style="font-family: Arial, sans-serif;">Cost-
benefit analysis - to show (people,
judiciary and authority) that the project is done because of the benefits</span></li>
<li style="text-align: justify;"><span style="font-family: Arial, sans-serif;">Get
social and political support – by increasing transparency and involving people in decision making</span></li>
<li style="text-align: justify;"><span style="font-family: Arial, sans-serif;">Performance measurement – based on implementation and benefit to people</span></li>
</ol>
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<span style="font-family: "Arial","sans-serif";">Reference<o:p></o:p></span></div>
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</div>
<ol style="text-align: left;">
<li style="text-align: justify;"><a href="http://www.governancenow.com/news/regular-story/how-get-governance-going-plug-policy-paralysis" style="font-family: Arial, sans-serif;">http://www.governancenow.com/news/regular-story/how-get-governance-going-plug-policy-paralysis</a></li>
<li style="text-align: justify;"><span style="font-family: Arial, sans-serif;">Willems,
T., & Van Dooren, W. (2011). Lost in diffusion? How collaborative
arrangements lead to an accountability paradox. </span><i style="font-family: Arial, sans-serif;">International Review of
Administrative Sciences</i><span style="font-family: Arial, sans-serif;">, </span><i style="font-family: Arial, sans-serif;">77</i><span style="font-family: Arial, sans-serif;">(3), 505-530. </span></li>
<li style="text-align: justify;"><span style="font-family: Arial, sans-serif;">Forrer,
J., Kee, J. E., Newcomer, K. E., & Boyer, E. (2010). Public–private
partnerships and the public accountability question. </span><i style="font-family: Arial, sans-serif;">Public
Administration Review</i><span style="font-family: Arial, sans-serif;">, </span><i style="font-family: Arial, sans-serif;">70</i><span style="font-family: Arial, sans-serif;">(3), 475-484. </span></li>
</ol>
</div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-4888534466033761014.post-20588191533440966532014-10-06T20:29:00.001+05:302014-10-06T20:29:14.597+05:30Water Redistribution - Learnings from China<div dir="ltr" style="text-align: left;" trbidi="on">
Many of us would be quite aware of the 'Indian Rivers Inter-Link' [1] project which was proposed in 2005. This is a very large scale project that intends to interlink Indian rivers by a network of canals so as to reduce floods in certain zones of the nation while alleviating the water shortage problem in others. It seems like quite a reasonable thing to do and the government has been in the process of surveying the zones and estimating costs and benefits since 9 years now. There are environmental and relocation issues that the officials have foreseen and will look to address if the project goes ahead, which, judging by its current state seems to be the case. But these are predictions and all international comparisons that have been done so far are with similar projects in the West, where social and economic situations are very different from those in India. <div>
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<div>
But now, an opportunity for comparison with a similar project in a nation whose conditions are very similar to those of India has presented itself. China has finished constructing a canal more than 1200 km in length from Danjiangkou Dam in the central province of Hubei to the capital, Beijing [2]. The issues they faced were similar, heavy concentration of industries and agricultural lands near the economy-driving capital area had depleted and polluted the water naturally available in the region and so the only solution they could conjure up was to 'borrow' from the water abundant South. And just like India's Inter-Link project, this seemed like a prudent thing to do and so, being China, they quickly did it.</div>
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The Economist [3], however, has a very interesting take on the project and points out secondary and tertiary impacts that make the project seem far less prudent. They say that while the canal will solve the current problem and meet a significant proportion of the demand, this portion will quickly shrink over time with an accelerated increase in population, number of industries and farmlands, spurred by the canal. Additionally, the article mentions "By lubricating further water-intensive growth the current project may even end up exacerbating water stress in the north". And this argument seems largely valid. When there is abundant supply of a commodity, its value decreases and people tend to use more of it, rather carelessly. Moreover, shifting billions of cubic metres of water may stimulate the spread of diseases which is something that even might not have been considered during the planning process. </div>
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<div>
They point out the real issue: the high demand for water and inefficient use of it. And this problems only gets exacerbated by the 'solution'. Agreed, that some amount of redistribution will have to happen to address the problem in areas that face acute shortage. But a more enduring solution would be controlled tapping of sustainable local resources and promotion of efficient utilisation techniques. Also, the government shouldn't hesitate in charging high tariffs from the industrial users of the redistributed water. This case also highlights a very interesting aspect of project conception/appraisal: sometimes projects are not the solution and therefore, unneeded and the appraisers should feel comfortable accepting that. </div>
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[1] <a href="http://en.wikipedia.org/wiki/Indian_Rivers_Inter-link">http://en.wikipedia.org/wiki/Indian_Rivers_Inter-link</a></div>
<div>
[2] <a href="http://en.wikipedia.org/wiki/South%E2%80%93North_Water_Transfer_Project">http://en.wikipedia.org/wiki/South%E2%80%93North_Water_Transfer_Project</a></div>
<div>
[3] <a href="http://www.economist.com/news/china/21620226-worlds-biggest-water-diversion-project-will-do-little-alleviate-water-scarcity-canal-too">http://www.economist.com/news/china/21620226-worlds-biggest-water-diversion-project-will-do-little-alleviate-water-scarcity-canal-too</a></div>
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Unknownnoreply@blogger.com8tag:blogger.com,1999:blog-4888534466033761014.post-442905077031852232014-09-09T18:45:00.001+05:302014-09-09T21:02:45.342+05:30Eight steps away from 24x7 power!<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="background-color: white; font-family: Trebuchet MS, sans-serif; font-size: x-small;"> </span><span style="background-color: white; font-family: 'Trebuchet MS', sans-serif; font-size: x-small;">With the closed civil nuclear deal between India and Australia, the NDA govt. of India comes up with an 8 point plan with an aim(although a very bold one!) to provide 24*7 power for all domestic, industrial and commercial purposes.</span></div>
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<ol>
<li><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"><span style="background-color: white;">Rationalization of coal supplies and focus on improving productivity and efficiency of coal production. Target: coal output of 1 billion ton by 2019</span></span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"><span style="background-color: white;">Restructuring the coal regulatory body giving it more independent power in decision taking and its implementation</span></span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"><span style="background-color: white;">Steps to control of coal theft (Yes! coal theft actually amounts to around $1.5 billion)</span></span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"><span style="background-color: white;">Nuclear energy generation</span></span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"><span style="background-color: white;">Hydel plants in J&K on fast track basis</span></span></li>
<li><span style="background-color: white;"><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;">Faster environmental and forest clearances (cleared long-pending transmission projects worth Rs 12,272 crore</span><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;">)</span></span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"><span style="background-color: white;">More focus on green energy sources-wind and especially solar energy(solar ultra mega power plant in Sambhar)</span></span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"><span style="background-color: white;">Gas based energy generation of worth 24,148 MW</span></span></li>
</ol>
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<span style="background-color: white; font-family: Trebuchet MS, sans-serif; font-size: x-small;"><br /></span></div>
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<span style="background-color: white; font-family: Trebuchet MS, sans-serif; font-size: x-small;"><i><u>Merits:</u></i> Firstly the government has begun to focus on efficiency and productivity of energy reserves (from the first 3 points above). Secondly, the 8 point plan reflects that the government is determined to explore renewable and nuclear energy sources(last 5 points above).</span></div>
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<span style="background-color: white; font-family: Trebuchet MS, sans-serif; font-size: x-small;"><br /></span></div>
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<span style="background-color: white;"><span style="font-family: Trebuchet MS, sans-serif; font-size: x-small;"><u><i>Possible improvements:</i></u> One possible area that might need serious thinking---</span><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;"> </span><span style="font-family: 'Trebuchet MS', sans-serif; font-size: x-small;">instead of concentrating on generation alone (which resulted in looking at it as an isolated system independent of transmission and distribution), we have to start making efforts to integrate and improve the whole process of "generation, transmission and distribution".</span></span></div>
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<span style="background-color: white; font-family: 'Trebuchet MS', sans-serif; font-size: x-small;">It is high time that we realize that 'the whole is greater than the sum of its parts' (true,even though its entirely counter-intuitive!)</span></div>
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td><span style="background-color: white; font-family: Trebuchet MS, sans-serif; font-size: x-small;"><img src="http://burnanenergyjournal.com/wp-content/uploads/2011/08/SourcesVenDiagram_v2.jpg" height="200" style="margin-left: auto; margin-right: auto;" width="400" /></span></td></tr>
<tr><td class="tr-caption"><span style="background-color: white; font-family: Trebuchet MS, sans-serif; font-size: x-small;">VARIOUS ENERGY SOURCES</span></td></tr>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: x-small;"><b style="background-color: white;">REFERENCES:</b></span></div>
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<a href="http://economictimes.indiatimes.com/industry/energy/power/how-modi-government-plans-to-provide-247-power-eight-steps/articleshow/42015299.cms"><span style="background-color: white; color: black; font-family: Trebuchet MS, sans-serif; font-size: x-small;">http://economictimes.indiatimes.com/industry/energy/power/how-modi-government-plans-to-provide-247-power-eight-steps/articleshow/42015299.cms</span></a></div>
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<span style="background-color: white; font-family: Trebuchet MS, sans-serif; font-size: x-small;"><br /></span></div>
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<a href="http://www.bloomberg.com/news/2014-07-29/stolen-india-coal-sold-at-black-market-in-modi-s-backyard.html"><span style="background-color: white; color: black; font-family: Trebuchet MS, sans-serif; font-size: x-small;">http://www.bloomberg.com/news/2014-07-29/stolen-india-coal-sold-at-black-market-in-modi-s-backyard.html</span></a></div>
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Unknownnoreply@blogger.com6tag:blogger.com,1999:blog-4888534466033761014.post-1490394690050878812014-08-26T23:52:00.000+05:302014-08-26T23:52:49.094+05:30Ministers handing out infrastructure projects to please voters<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;">On 11th August 2014, there was a news article in the Economic Times titled "<span style="background-color: white;"><i>Akin to railways, aviation ministers handing out airport projects to please voters</i>" [1]. I found this interesting since this brings out the influence of politics on infrastructure projects, an aspect that is often overlooked and overpowered by financial and technical perspectives in discussions about projects. </span></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white;"><br /></span></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white;">The articles mentioned that "</span><span style="background-color: white;">Andhra Pradesh is the new focus area for the civil aviation ministry which, with a politician from the state heading it, has set the wheels in motion to develop three international airports in the state, including one to be built from scratch." I wouldn't so much focus on the particular state or minister as much as I'd like to focus on the fact that many a times, projects are unnecessarily taken up to please voters. In this particular case, the three airports that are slated to be given international status are Tirupati, Vijayawada and Vishakhapatnam, with the former two being upgradation projects and the last being an entirely new development. </span></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white;"><br /></span></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white;">All three of these cities face shortages of basic amenities [2] [3] and the capital and expertise invested in the construction of airports could have been channeled to tackle these fundamental problems rather than using them to construct international airports, which, in fact are not even needed. With the national carrier Air India operating out of its hubs in T3 Indira Gandhi International Airport, New Delhi and T2 Chattrapati Shivaji International Airport, Mumbai [4], what every other city needs to have is a domestic airport of international standards instead of having an international airport that is underutilised. Moreover, the presence of an international airport in the state at Hyderabad further renders the development of more airports unnecessary. A passenger travelling to the US or Europe is typically taken to one of the hubs and then flown out of the country. For short distance flights to the Middle-East or the Far-East, mid sized international airports of Hyderabad, Chennai, Bangalore etc. are more than capable of handling the present and future traffic volumes. </span></span><br />
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white;"><br /></span></span>
<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white;">A classic case of how underutilised these projects become is the Raja Bhoj airport in Bhopal, the city where I hail from, that was upgraded to handle international air traffic in 2011 but the only international flights that are operated out of the airport are the seasonal <i>Hajj</i> flights operated by Saudia, Bhopal being a city with a considerable Muslim population. The upgrade did instill a sense of pride among the residents of Bhopal when it happened but now it is felt that maybe those funds could have been used to speed up the implementation of the Bhopal Bus Rapid Transit System or the Narmada Pipeline which address much more fundamental issues that the city faces. </span></span><br />
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<span style="font-family: Helvetica Neue, Arial, Helvetica, sans-serif;"><span style="background-color: white;">It is obvious that these projects are taken up by politicians to please the voters in their constituency because of the mileage that association with terms such as 'international' generate. It would be interesting to see what becomes of these airports over the next few years since quite clearly, these aren't well thought out projects aimed at developmental or social gains as much as they are aimed at ensuring the continuation of political reigns. </span></span><br />
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<ol style="text-align: left;">
<li><span style="background-color: white; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">[1] http://goo.gl/JrMTf6</span></li>
<li><span style="background-color: white; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">[2] http://goo.gl/DI6wuu</span></li>
<li><span style="background-color: white; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">[3] http://goo.gl/wHWGWC</span></li>
<li><span style="background-color: white; font-family: 'Helvetica Neue', Arial, Helvetica, sans-serif;">[4] http://goo.gl/QiIxm8</span></li>
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Unknownnoreply@blogger.com7tag:blogger.com,1999:blog-4888534466033761014.post-30430308763743230032014-08-22T11:51:00.002+05:302014-08-22T11:51:25.298+05:30Mumbai Metro : (Non) Cooperation between Infrastructure Players on RTI<div dir="ltr" style="text-align: left;" trbidi="on">
After struggling through a lot of problems similar to the <i>Mumbaikar,</i> the much coveted Mumbai Metro finally started running on 8th June 2014. With total 63km of lines to be laid, the first line of 11.7 km between Versova-Andheri-Ghatkopar finally became operational. This PPP had raised lot of expectations not only from commuters point of view but also as a model on which other PPPs could be formualted. May it be cost and time overruns or Reliance claiming the Metro to be Reliance Metro this project has shown the cooperation or (lack of it) that exists among Infrastructure Players.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhpIf25KgVYTrqMvSa8T7D6TykqZU9YxOXF3YY9U_jwN6nUWl65NnU_JoczraUDFNqiMdkTRxA9RooyHbX_ru_ucs1dKweWjbCc4IFrJd39c8A80CB4_mlFptu17SPLctVdmm0QE1PSLIQ/s1600/metro1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhpIf25KgVYTrqMvSa8T7D6TykqZU9YxOXF3YY9U_jwN6nUWl65NnU_JoczraUDFNqiMdkTRxA9RooyHbX_ru_ucs1dKweWjbCc4IFrJd39c8A80CB4_mlFptu17SPLctVdmm0QE1PSLIQ/s1600/metro1.jpg" height="192" width="640" /></a></div>
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Latest to top it is the secrecy that Reliance Infrastructure has been maintaining about the project. Three RTI applications to get reports by RDSO, CMRS and Railway Board have not been responded to. This is not the first time Rinfra has been unwilling to share information with the public. It has ran away from taking responsibiltiy for signal failure near Jagruti Nagar Metro Station and technical failure at Ghatkopar Metro Station as well.<br />
Mumbai Metro One Pvt. Ltd. is the joint venture of Rinfra, Veolia Transport and MMRDA running the operations of the Line 1 of Metro. Rinfra has a major stake while MMRDA owns only 26%. With 3 of the 8 Board of Directors being from MMRDA other from Rinfra, the latter certainly has a upper hand in decision making process. Rinfra is a private organisation and hence does not come under purview of RTI. However, RTI experts claim that since CEO of MMOPL is Metro Rail Administrator, a public servant, MMOPL should come under RTI.<br />
In the current grievance redressal mechanism, <i>Mumbaikars</i> have to direct their pleas to MMRDA for information, which then alerts MMOPL, which may or may not reply since the RTI has not been served directly to it. Hence, Rinfra stays clean and non-accountable. Steps need to be taken to make the mechanism more transparent and hold Rinfra accountable, so that same mistakes are not repeated for other phases of the project. Any suggestions and also what are the problems that we may face in implementing them?<br />
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<b>Source</b> : http://www.dnaindia.com/mumbai/report-dna-exclusive-is-rinfra-s-mumbai-metro-a-top-secret-project-2012706</div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-4888534466033761014.post-64740880663298673662014-08-18T12:50:00.000+05:302014-08-18T20:09:54.425+05:30Public Vs Private - A contradiction<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Times, Times New Roman, serif;">Hey ! I have recently come across an article in Economic Times. I thought of sharing some of the interesting observations.</span><br />
<span style="font-family: Times, Times New Roman, serif;">There was a comparison made between the government run Kandla port and the privately run Mundra port in Gujarat.It turns out that the Mundra Port is excelling a lot more compared to the Kandla port. Mundra loads nearly seven times more cargo compared to Kandla.</span><br />
<span style="font-family: Times, Times New Roman, serif;">The Adani Group which owns the Mundra Port charges up to five times more compared to the Kandla Port. But still the shippers prefer Mundra, this is mainly because of the high quality of infrastructure provided by Mundra in comparison to Kandla. Mundra does charge more but it properly uses the money in improving the Infrastructure which attracts the shippers.</span><br />
<span style="font-family: Times, Times New Roman, serif;">Anand Sharma, director, Mantrana Maritime Advisory, said that "Shippers choose to go to a port with higher charges but better infrastructure than a port that is cheaper but is saddled with poor infrastructure. A cheaper, but clumsy port would eventually make shippers pay more in total end-to-end logistics cost".</span><br />
<span style="font-family: Times, Times New Roman, serif;">(Economic Times, August 3-2014)</span><br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLX0x82M2TxlMxUgijJdAlXgc4Q_GbG9oaY8oCXJqhmtmUJI1mVf0ud3egAYCF27WSDj9133T8eHmKmd1-XNCGa5znEhSiTD25wuO8nKjosqrBVV05MRVf-ILhLtx-ikH6SS09LJMmItDH/s1600/kandla-Mundra.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLX0x82M2TxlMxUgijJdAlXgc4Q_GbG9oaY8oCXJqhmtmUJI1mVf0ud3egAYCF27WSDj9133T8eHmKmd1-XNCGa5znEhSiTD25wuO8nKjosqrBVV05MRVf-ILhLtx-ikH6SS09LJMmItDH/s1600/kandla-Mundra.JPG" height="262" width="320" /></a><br />
<i style="font-family: Times, 'Times New Roman', serif;">So, I think low tariffs do not make a port more attractive, in fact what matters is the infrastructure of the port. The government should start looking into this, may be it should start charging more and use the revenues in modernizing the ports.</i><br />
<span style="font-family: Times, 'Times New Roman', serif;">Have a good read at:</span><br />
<span style="font-family: Times, 'Times New Roman', serif;"><a href="http://articles.economictimes.indiatimes.com/2013-08-01/news/40963238_1_mundra-kandla-port-trust-adani-port">http://articles.economictimes.indiatimes.com/2013-08-01/news/40963238_1_mundra-kandla-port-trust-adani-port</a></span><br />
<span style="font-family: Times, 'Times New Roman', serif;"><a href="http://m.economictimes.com/advantage-pvt-easier-tariff-guidelines-for-govt-run-ports-not-sufficient-to-revive-them/articleshow/39493701.cms">http://m.economictimes.com/advantage-pvt-easier-tariff-guidelines-for-govt-run-ports-not-sufficient-to-revive-them/articleshow/39493701.cms</a> </span><br />
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Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-4888534466033761014.post-77470001492666179822014-08-11T17:37:00.002+05:302018-03-29T14:44:01.529+05:30Land Acquisition Act, 2013<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "times new roman" , serif;">Land is needed for all
infrastructure projects. Highway projects require more land in the cities and
road side (for expansion) compared to other infrastructure projects and hence
Land Acquisition is the main reason stated for delay in highway projects.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "times new roman" , serif;">In India, land is considered as a source of livelihood and identity as majority of the people are
agrarian. Many argue that it would not be fair on the government to rip this
resource from the poor for the sake of infrastructure development. So, there is
a need to balance the objectives of development and social justice. With
this aim, the government took a step to replace the 120-year old prevailing
Land Acquisition Act, 1894 with the Land Acquisition Act, 2013. This act came
into force on 1<sup>st</sup> Jan 2014. <o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "times new roman" , serif;">Some of the key reforms
and issues in this act are as follows.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm;">
<br /></div>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 0cm 0cm 0cm; mso-yfti-tbllook: 1184;">
<tbody>
<tr>
<td style="border: solid black 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: center;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">Reforms<o:p></o:p></span></div>
</td>
<td style="border-left: none; border: solid black 1.0pt; mso-border-left-alt: solid black 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: center;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">Issues for implementation<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid black 1.0pt; mso-border-top-alt: solid black 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">There is a minimum consent to sell
from land owners. This is fixed at 70-80% for projects involving private players.<o:p></o:p></span></div>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">Lands in India are highly
fragmented. It is said that 12,000 owners were there in 1,000 acres to be
acquired by Tata motors for Singur plant (West Bengal). It is difficult to
get consent from these many owners.<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid black 1.0pt; mso-border-top-alt: solid black 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">Market value of land fixed based
on consent of land owners, average prices of recent transactions in the
vicinity, etc.<o:p></o:p></span></div>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">-Effective compensation becomes
2-4 times than before. Huge concern for Investors.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">-Definition of recent transactions
and vicinity not given.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">-Since consent of owners are
required, they would escalate costs to high values.<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid black 1.0pt; mso-border-top-alt: solid black 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">Gram sabhas, Panchayat and
Collector are involved in decision making process.<o:p></o:p></span></div>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">-Sequential time would be 48-60
months from inception to payment of award<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">-Since more levels of approval, there is scope for misuse of powers (corruption)<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid black 1.0pt; mso-border-top-alt: solid black 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">These new reforms are applicable
for projects of 100 acres in rural and 50 acres in urban<o:p></o:p></span></div>
</td>
<td style="border-bottom: solid black 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: none; padding: 0cm 5.4pt 0cm 5.4pt; width: 231.05pt;" valign="top" width="308"><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span style="font-family: "times new roman" , "serif"; mso-fareast-font-family: "Times New Roman";">Rather than land area measurement,
the number of people displaced would have been a better criteria<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
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<br /></div>
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<span style="font-family: "times new roman" , serif;">The Act is criticised to
be favouring land owners and not favouring new projects in this infrastructure
deficient country. This also puts a lot of pressure on the government as it
promises land owners so many benefits like 4X land value, Job to family
member, house of 50 sqm. plinth area etc.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "times new roman" , serif;">Rather than giving
owners all these benefits, it would be better to give Land bonds (Infrastructure
bonds) as currently practised in many countries. These land bonds would
reduce upfront costs of payment to owners, would be a livelihood for owners who
lost land and land owners would not delay the process as they are also
stakeholders of the project. <o:p></o:p></span></div>
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<br /></div>
<span style="font-family: "times new roman" , serif;">Reference- </span><span style="color: blue; font-family: "times new roman" , serif;"><a href="http://infrastructuretoday.co.in/News.aspx?nId=cl3s8luU2PIhzEIUfJZDsQ==&NewsType=How-does-the-new-Land-Acquisition-Act-impact-the-infrastructure-sector--India-Sector" style="font-family: 'Times New Roman', serif;">Infrastructuretoday - LA Bill</a></span><br />
<a href="http://timesofindia.indiatimes.com/city/kochi/Govt-nod-for-land-acquisition-rehabilitation-policy/articleshow/10835032.cms?referral=PM">TOI - Land Bonds</a><br />
<br /></div>
</div>
Unknownnoreply@blogger.com6tag:blogger.com,1999:blog-4888534466033761014.post-51515051351082017862013-11-16T11:13:00.000+05:302013-11-16T11:15:18.721+05:30Debt Vs Equity Financing<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: Verdana, sans-serif;">The appropriate ratio of debt to equity is vital in
financial structuring of an infrastructure project. Debt financing means borrowing for a
particular project with provisions for repayment with interest. In equity
financing, the capital is either invested by the stakeholders or by raising
money via selling interests in the company (stocks/bonds).</span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: Verdana, sans-serif;">Comparison</span></div>
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<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="text-align: left;">
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o:title="Debt_vs_Equity_Diagram"/>
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</v:shape><![endif]--><!--[if !vml]--><!--[endif]--><span style="line-height: 115%;"><span style="font-family: Verdana, sans-serif;">Equity need not be paid
back while debt has to be. Additionally equity ownership adds credibility to a
venture while high debt projects are considered to be risky. In debt financing, the lender has no
claim on the profits generated as opposed to equity owners. And the interest on loans is tax deductible
thus providing a tax shield. Furthermore, actions taken by the
company need not undergo clearance from the lender as opposed to voting from
equity holders for approval (Thomson Reuters,
2013). </span></span><span style="font-family: Verdana, sans-serif; line-height: 115%;">On the other hand the advantages of equity financing cannot
be over emphasized. It adds to the net worth of the venture providing financial
strength and preserves the borrowing capacity for future needs ( Ebi Ofrey, 2011).</span></div>
<div style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: Verdana, sans-serif; font-size: x-small;"><br /></span></span></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLIwYUGU1mhDTwjiT1Evg5CPJXFeyHtlnWQIXjXzZwGLhF3K0BLlKswUvauLDbm3jqMCs8WwNqYBMGSUew8tIEsUx_ELyEh17xMN2Zo322ECPdK_VzZ57DyywwI9lYm7wjqmF_ZEjAE_Q/s1600/Debt_vs_Equity_Diagram.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLIwYUGU1mhDTwjiT1Evg5CPJXFeyHtlnWQIXjXzZwGLhF3K0BLlKswUvauLDbm3jqMCs8WwNqYBMGSUew8tIEsUx_ELyEh17xMN2Zo322ECPdK_VzZ57DyywwI9lYm7wjqmF_ZEjAE_Q/s320/Debt_vs_Equity_Diagram.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 1: Growth: Debt Vs Equity Financing (Sweeney, 2013)</td></tr>
</tbody></table>
<div class="MsoNormal" style="page-break-after: avoid;">
<span style="font-family: Verdana, sans-serif;">Both debt and equity have
their pros and cons. It is up to the stakeholders in the business venture to
analyze and arrive at the option that best suits their needs. Figure 1 (Sweeney, 2013)
gives a graphical representation of expected growth via debt and equity
financing. Hence, debt financing would be appropriate for business owners who
do not want to dilute ownership, have limited ability to raise equity, or share
future profits (Sweeney, 2013).</span></div>
</div>
Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-4888534466033761014.post-45178298475720864912013-10-28T16:54:00.001+05:302013-10-28T16:54:51.145+05:30Equator principles as a hindrance to developing economies<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: left;">
<span style="font-family: inherit;">The equator principles defines the term "Designated countries" as "<span style="background-color: white; line-height: 16px; text-align: justify;">those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment." The list (which can be viewed at: </span></span><a href="http://www.equator-principles.com/index.php/ep3/324">http://www.equator-principles.com/index.php/ep3/324</a>) of such countries <span style="background-color: white; font-family: inherit; line-height: 16px; text-align: justify;">comprises of almost exclusively developed countries. I find this quite one sided, it is obvious that developed countries will have far less pollution and energy usage emenating from construction when compared to developing countries. The latter have not reached their optimum yet, and as such they obviously need to keep their economic stability first.</span></div>
<div style="text-align: left;">
<span style="background-color: white; font-family: inherit; line-height: 16px; text-align: justify;"><br /></span></div>
<div style="text-align: left;">
<span style="background-color: white; font-family: inherit; line-height: 16px; text-align: justify;">To put things in perspective, there are just 6 out of the 70+ lending institutions from Asia and the Middle East, and just one from India (IDFC). IDFC only joined in the earlier half of this year, so it will be quite interesting to see how this move is received.</span></div>
<div style="text-align: left;">
<span style="background-color: white; font-family: inherit; line-height: 16px; text-align: justify;"><br /></span></div>
<div style="text-align: justify;">
<span style="line-height: 16px;">The equator principles, if applied to institutions financing projects in these countries, would definitely hinder their growth. This is probably why we see so few institutions from Asia and the Middle East.</span></div>
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<span style="line-height: 16px;"><br /></span></div>
<div style="text-align: justify;">
<span style="line-height: 16px;">It is not that these principles have not been violated. There have been cases such as the Baku-Tbilihi-Ceyhan pipeline, where the principles were tossed aside because the project had to go ahead. Selectively applying them in situations can lead to all sorts of irregularities in the future, all the way up to banks strong arming the client into doing things their way in the name of these principles. </span></div>
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<span style="line-height: 16px;"><br /></span></div>
<div style="text-align: justify;">
<span style="line-height: 16px;">These factors have made lending institutions of developing countries very wary of the principles as they view them as something that will just slow them down and reduce their competitiveness.</span></div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4888534466033761014.post-48342475122728819832013-10-28T15:57:00.002+05:302013-10-28T15:57:40.663+05:30Eminent Domain and its implication for project finance<div dir="ltr" style="text-align: left;" trbidi="on">
This is an interesting article regarding eminent domain that was published very recently:<br />
<a href="http://www.theatlanticcities.com/housing/2013/10/why-eminent-domain-cant-save-broke-cities-richmond/7358/">http://www.theatlanticcities.com/housing/2013/10/why-eminent-domain-cant-save-broke-cities-richmond/7358/</a><br />
<br />
In most cases, we see it being used to seize land for an infrastructure or construction project. This is a case where the government of Richmond, California is attempting to seize the land from the project sponsors in order to save the numerous homeowners who have defaulted on their mortgages.<br />
<br />
This has quite a few implications for the infrastructure market, as explained by this article.<br />
<br />
While not illegal, this is a move that brings extremely bad faith.The main implication is that banks will have to stop lending to cities willing to resort to this form of eminent domain. These cities are then likely to fall behind due to a lack of funds to pursue projects. And if this is done by every city in America with similar issues, the effect on their economy would be crushing. Creditworthiness and trust would take a huge hit, similar to what happened to India after Dabhol.<br />
<br />
Therefore, I am inclined to agree with the author when he says that this move is somewhat suicidal to the economy of Richmond or any other city that does it.</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4888534466033761014.post-70339996143062818752013-10-14T11:53:00.002+05:302013-10-14T11:53:35.623+05:30Findings on Tirupur Project<div dir="ltr" style="text-align: left;" trbidi="on">
I came across a case study which was quite contradictory to the one which we had<br />
discussed in class. The case study which was authored by Gaurav Dwivedi stated Tirupur as a<br />
failure in meeting its customer needs leading to a lot of slum dwellers still depending on<br />
water vendors and other water sources due to scarcity. A lot of facts regarding the<br />
concession like operations, shareholding, debt, revenue, expenditure and profits, remains<br />
unavailable to the public. Also there were confidential clauses incorporated in the<br />
concession which were against the transparency concerns. In fact the author had to move<br />
legally against the New Tirupur Area Development Corporation Limited (NTADCL) in order to<br />
obtain real data regarding the project.<br />
<br />
Ref: <a href="http://www.manthan-india.org/IMG/pdf/PPP-Tiruppur_Paper_IIMB_Conference_for_Website.pdf">http://www.manthan-india.org/IMG/pdf/PPP-Tiruppur_Paper_IIMB_Conference_for_Website.pdf</a><br />
<br />
<div>
<br /></div>
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4888534466033761014.post-27862465041424928282013-10-13T08:36:00.003+05:302013-10-13T08:36:31.840+05:30USD 1 trillion for Infrastructure development<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 150%;">
<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial, sans-serif; font-size: 10pt; line-height: 150%;">According
to 12<sup>th</sup> Five Year Plan in India, infrastructure sectors which
includes power, roads, ports , civil aviation etc. has a projected investment
of $ 1 trillion with an equal participation of private sector. In an annual
plenary meeting of IMF and WB, finance minister P Chidambaram promoted PPP and
included many sub-sectors like modern storage, education, health, irrigation,
etc. for VGF scheme to achieve his target (<a href="http://www.business-standard.com/article/pti-stories/huge-opportunity-for-foreign-investment-in-india-chidambaram-113101200082_1.html" target="_blank">reference</a>).<o:p></o:p></span></div>
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<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial, sans-serif; font-size: 10pt; line-height: 150%;"><br /></span></div>
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</div>
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<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial, sans-serif; font-size: 10pt; line-height: 150%;">Another
upcoming example of PPP is<a href="http://www.scribd.com/doc/138218424/5MJC-Business-Investment-Document" target="_blank"> 5MJC</a>, a company that has a vision of building five
major cities in the nation of Malawi.</span> <span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial, sans-serif; font-size: 10pt; line-height: 150%;">The
government of 5Major Cities (Shekinah City, Heaven’s Gate City, Zion City, Zoe City
and Zeal City) has planned to provide "strong" mayor-council system.
The cities governments being responsible for public education, correctional institutions,
libraries, public safety, recreational facilities and sanitation, water supply and
welfare services which is in line with the <a href="http://en.wikipedia.org/wiki/Mercer_Quality_of_Living_Survey" target="_blank">Mercer’s Quality of Living</a> which for 2012 Infrastructure is based on electricity
supply, water availability, telephone and mail services, public transportation,
airports and traffic congestion.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4888534466033761014.post-1855107035252747842013-10-12T01:03:00.001+05:302013-10-12T01:03:21.735+05:30One sided nature of the MoU between the MSEB and Enron in the Dhabol Project<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
The World Bank commented on the MoU between Enron and the
MSEB as that it was biased in favour Enron. After the WB’s comment on the MoU the GOI’s Central Electricity Authority (CEA) did their own analysis and
found certain abnormalities in the MoU. The findings include:</div>
<div class="MsoNormal">
i) no specific details of project costs were provided as per
Indian Law</div>
<div class="MsoNormal">
ii) the date of start of the contract and payments were not
mentioned i.e when the electricity is available or when the contract was signed</div>
<div class="MsoNormal">
iii) the payment structure was different from the usual
norms</div>
<div class="MsoNormal">
iv) high price of power higher than anywhere else in the
country</div>
<div class="MsoNormal">
v) no provision to scrutinize the project was made to make
sure that the payment of MSEB was corresponding to the actual electricity cost</div>
<div class="MsoNormal">
vi) while MSEB guaranteed to buy a minimum amount of fuel,
the fuel supplier was not adhered to providing minimum fuel.</div>
<div class="MsoNormal">
vii) no study of economical justification or verification of
the price of fuel was done by MSEB</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Even after all these findings the authoritative bodies of the GOI gave approval for the project which was immediately followed by MSEB signing the PPA with Enron. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Still even more anomalies can be observed in the project which makes it obvious of the quantum of illegal movements which would have taken place in the project.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Article ref: <a href="http://www.atimes.com/reports/CA13Ai01.html">http://www.atimes.com/reports/CA13Ai01.html</a></div>
<br />
<div class="MsoNormal">
<br /></div>
</div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-4888534466033761014.post-59533233097854746882013-10-01T21:34:00.002+05:302013-10-01T21:34:38.105+05:30A new kind of infrastructure risk<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
We’ve spoken a bit about the factor of risk in
infrastructure projects, and categorized them as well.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The article here (<b>A</b><b><span style="background: white; mso-bidi-font-family: Arial;"> New Type of Risk in
Infrastructure Projects, </span></b><b>by
Maria Craciun</b>), adds to that categorization, using a few different lines of thinking. It also talks about a kind of risk we haven't mentioned..</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Please find below a paragraph from the paper of particular significance
with respect to PPPs:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<i>To the above three
risks it seems appropriate to introduce a fourth one, manifested especially in
the latest years<b>: the risk of financing</b>. The global financial crisis
that affected, 2008-2010, a significant part of the world economy, including
the U.S., EU or Japan, gave birth to a new type of risk, one that initiators of
investment projects had not witnessed before. This risk is determined by events
which can lead to loss of project funding opportunities. So far, usually, the
inability to finance a project has been due for the most part, to the project
itself. Either this did not meet the requirements of potential lenders or
providers of capital, or was confronted with a number of risks whose costs and
whose ownership was deemed too expensive. <o:p></o:p></i></div>
<div class="MsoNormal">
<i><br /></i></div>
<br />
<div class="MsoNormal">
Please note the final risk the author talks about is
something that has become predominant relatively recently. This risk is the
risk of a good project not being able to take off because of the lack of
sufficient funds. That point really stresses on the importance of PPPs because
the risk can be totally mitigated if governments really are willing to fund and
support private projects and set up partnerships with them. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Although, I am not sure how
valid this kind of risk is for the Indian scenario at present.</div>
</div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-4888534466033761014.post-12446238691489975892013-09-19T14:54:00.001+05:302013-09-19T14:54:17.390+05:30"PPP readiness" in Latin America- A gauge mechanism<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
“<span style="background: white; mso-bidi-font-family: Helvetica;">Evaluating the environment for public-private partnerships in Latin
America and the Caribbean</span>”<span style="background: white; font-family: "Helvetica","sans-serif"; font-size: 7.0pt; line-height: 115%;"> </span>is
a good article with regard to the “PPP Readiness” in Latin America. Bolivia
doesn’t seem to be on this list though, so we can’t really gauge how they’ve
changed since Cochabamba. Perhaps if this sort of an analysis had been done beforehand, things might have turned out differently for the project (or the project may even have been scrapped).</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
One of the key observations I was able to pull from this was
that countries that are more developed seem to score higher than ones that are
less developed. Economic stability is a driving factor on this list. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
It also mentions that centralized states score higher. But
is a single government body taking all decisions from their side really the best
thing? It probably would be the best thing for the PPP to succeed, but not
necessarily the best thing for all the stakeholders involved if they are
represented by a single entity. While the model seems to be having success,
would the pros outweigh the cons?</div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
(To access the article, go to <a href="http://www5.iadb.org/mif/en-us/home/knowledge.aspx">http://www5.iadb.org/mif/en-us/home/knowledge.aspx</a>
and search for “PPP”)</div>
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4888534466033761014.post-18405798212067863362013-09-17T17:51:00.001+05:302013-09-17T17:51:39.239+05:30Alandur Case Study<div dir="ltr" style="text-align: left;" trbidi="on">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://2.bp.blogspot.com/-nG-FXleKyVs/UjhBTBa97LI/AAAAAAAAAec/eAdZqu5qLT4/s1600/proj_Alandur_02.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="http://2.bp.blogspot.com/-nG-FXleKyVs/UjhBTBa97LI/AAAAAAAAAec/eAdZqu5qLT4/s1600/proj_Alandur_02.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Alandur STP (www.wabag.com)</td></tr>
</tbody></table>
The STP at Alandur discharges the effluent in to the Adyar River and the sludge to an open dumping site at Palliakaranai (Alandur Sewerage Project: A Success Story of PPP Arrangements by Dr. Mukesh P Mathur). As far as current status goes, the project which included the construction of the STP, pumping station and the piping network was completed by the end of 2001. The 23,000 households that paid for the connection were split and categorized into phases to be connected to the sewer system. This includes 43% of the slum dwellers who opted to pay for separate sewer connections to their houses. As of today, 100% of the community is not connected to the sewer system yet. This is due to two main reasons: (1) the number of households that were willing to pay to be connected to the underground sewer system increased with increase in time, and (2) some of the households have not connected their septic systems to the main sewer, which is regarded as the responsibility of the house owner by the municipality. The O&M of the piping system is overseen by the City ever since the expiry of the contract in 2005. The STP contract with the private sector will expire in 2019.<br />
<br />
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://4.bp.blogspot.com/-jyRGDm8Ox8U/UjhBTPeZ2bI/AAAAAAAAAeg/82MKEb9Vshs/s1600/proj_Alandur_01.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="http://4.bp.blogspot.com/-jyRGDm8Ox8U/UjhBTPeZ2bI/AAAAAAAAAeg/82MKEb9Vshs/s1600/proj_Alandur_01.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Alandur STP (www.wabag.com)</td></tr>
</tbody></table>
<div style="text-align: left;">
The VfM analysis provided at <a href="http://toolkit.pppinindia.com/solid-waste-management/module3-rocs-asp7.php?links=asp7" target="_blank">http://toolkit.pppinindia.com/solid-waste-management/module3-rocs-asp7.php?links=asp7</a> gives a brief overview of why this particular project has been successful so far. For instance, the graded monthly sewerage fee collected by the municipality covers both the debt repayment and the O&M costs. Also, the detailed studies performed by the municipality prior to bidding, reduced any potential for scope creep. This in combination with the payment assurance by the municipality was one of the factors that enabled the successful implementation and operation of this project. </div>
</div>
Unknownnoreply@blogger.com8tag:blogger.com,1999:blog-4888534466033761014.post-18812069179340129212013-09-14T09:12:00.001+05:302013-09-19T18:25:27.868+05:30Follow up on Cochabamba<div dir="ltr" style="text-align: left;" trbidi="on">
The paper by Geraldine Dalton discusses the causes for failure of the Cochabamba project where private sector financing was used as a tool to carry out the project. While, the issues which led to the project being scrapped such as the water tariff hikes, terms of privatization, etc were discussed by the author, the passing of Law 2029 boggles my mind. According to Law 2029, the water was made into a State commodity and was exclusively licensed over to ADT. This not only meant people cant draw water from their own private wells, but also cannot collect rain water without a license. In September of 2001, the residents of Cochabamba took control of SEMAPA through La Coordinadora (La Coordinadora de Defensa del Agua y la Vida). The new SEMAPA has so far reduced the water tariffs, built a community water tank in Alto Cochabamba, installed 800 new water connections and connected 400 communities abandoned by the old company to water supply network. I have included an excerpt from the paper regarding the newly formed SEMAPA.<br />
<br />
<i> As an institution, SEMAPA is a model participatory organisation. The company is run with full support and inclusion of its workers and its community rather than by ‘corrupt politicians’ (Shultz, 2001, Harden, 2001). This is achieved through the institutional focus of </i><i>neighborhood citizens meetings that use local knowledge to prioritize local needs and to help </i><i>solve water supply problems. Similarly, public hearings are used to define how SEMAPA </i><i>should develop, and on a weekly TV show the SEMAPA Director Dr. Jorge Alvarado, answers </i><i>the public's questions and hears their concerns (Barlow, 2001). This approach enables </i><i>SEMAPA to optimize the financial resources available to it in order to meet social objectives in </i><i>water provision and maintain and popular support for its operations.There are some constraints on SEMAPA’s continued success. Despite popular support, its </i><i>affiliation with La Coordinadora has ruled out support from Cochabamba’s political and </i><i>business elite. They have boycotted the organisation and refused to pay water tariffs (Harden,</i><i>2001). Apart from loss of revenue, lack of support from this community is detracts from </i><i>16 </i><i>SEMAPA’s institutional credibility. Although progress has been made, Cochabamba’s </i><i>problems have not been solved. Jorge Cuba, a Bolivian journalist has noted that the city has no </i><i>more than 5 hours of water a day and only 40% of the farmers in surrounding areas have access </i><i>to clean water (Cuba, 2000). The true measure of ‘new’ SEMAPA’s potential as an </i><i>organisation is its capacity to raise finance and address future as well as current water </i><i>requirements.</i><br />
<i><br /></i>
Source: Private sector finance for water sector infrastructure: what does Cochabamba tell us about using this instrument? by Geraldine Dalton, Occasional Paper No 37, Water Issues Study Group, School of Oriental and African Studies (SOAS), University of London, September 2001</div>
Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-4888534466033761014.post-60931089565114482022013-09-05T00:02:00.001+05:302013-09-05T00:02:11.790+05:30Increasing share of PPPs in JNNURM<div dir="ltr" style="text-align: left;" trbidi="on">
I read this in ET today..... its good news.<br />
<br />
The government plans to increase the funding for projects that are carried out via PPP mode under the JNNURM scheme. This is what we were discussing in class the other day- there was earlier little to incentivize the projects via the PPP mode.<br />
<br />
Kamal Nath (Urban Development minister) has himself emphasized on the importance of PPP projects in India. Quoting him:"In our next urban renewal mission program, we propose that the central share in the case of PPPs will be enhanced by 20%".<br />
<br />
This will be rolled out in phase-2 of the JNNURM. Although it does not guarantee better projects, in my personal view it will lead to increased capital inflows and better employment of technical knowledge. </div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-4888534466033761014.post-25622074836501711062013-08-29T23:21:00.002+05:302013-08-29T23:21:10.637+05:30Urban Infrastructure: - Special Economic Zone in India<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
<b><span style="font-size: 14.0pt; line-height: 115%;">Urban Infrastructure: - Special Economic
Zone in India<o:p></o:p></span></b></div>
<div class="MsoNormal">
Special economic zone is geographical region which is
designed for export goods and creating employment. SEZ comprises of free trade
zone, industrial park, free economic zone, urban enterprise zone etc.<o:p></o:p></div>
<div class="MsoNormal">
<b>The objective</b> of
SEZ is <o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo1; mso-text-indent-alt: -.25in; tab-stops: list .5in; text-indent: -.5in;">
<!--[if !supportLists]--><span style="font-size: 7pt;">
</span>i)<span style="font-size: 7pt;">
</span><!--[endif]-->generate additional economic activity<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo1; mso-text-indent-alt: -.25in; tab-stops: list .5in; text-indent: -.5in;">
<!--[if !supportLists]--><span style="font-size: 7pt;">
</span>ii)<span style="font-size: 7pt;">
</span><!--[endif]-->Promotion of export of goods and services.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo1; mso-text-indent-alt: -.25in; tab-stops: list .5in; text-indent: -.5in;">
<!--[if !supportLists]--><span style="font-size: 7pt;">
</span>iii)<span style="font-size: 7pt;">
</span><!--[endif]-->Promotion of investment from domestics and
foreign resources.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo1; mso-text-indent-alt: -.25in; tab-stops: list .5in; text-indent: -.5in;">
<!--[if !supportLists]--><span style="font-size: 7pt;">
</span>iv)<span style="font-size: 7pt;">
</span><!--[endif]-->Creation of employment<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in; mso-list: l0 level1 lfo1; mso-text-indent-alt: -.25in; tab-stops: list .5in; text-indent: -.5in;">
<!--[if !supportLists]--><span style="font-size: 7pt;">
</span>v)<span style="font-size: 7pt;">
</span><!--[endif]-->Development of infrastructure.<o:p></o:p></div>
<div class="MsoNormal">
<b>SEZ Act 2005<o:p></o:p></b></div>
<div class="MsoNormal">
SEZ act bill was passed in May 2005 and it came into effect in
Feb 2006. This bill provide partial or complete exemption in custom/excise,
income tax, dividend distribution tax, central sales tax and service tax for
developer and operating unit. For operating unit, 100% tax exemption for first
5 years, 50% for next five year, and 50% of ploughed back profit for next 5
year. Ploughed back means it enables these units to reinvest profit into their business
without paying the taxes. While for developer, they will continue to get 100%
income tax exemption for 10 year in block period of 15 years.<o:p></o:p></div>
<div class="MsoNormal">
It also has provision for <i>Single Window Clearance Mechanism. </i>It is trade facilitation idea which
enables traders to submit regulatory document at single location or single entity.
Such documents are typically custom declaration, import export permits and
other certificates.<o:p></o:p></div>
<div class="MsoNormal">
<b>Indian Scenario</b><o:p></o:p></div>
<div class="MsoNormal">
In India 143 SEZ are currently operating in our country (till
June 2012)<b>. </b> And as
of June 2012, 634 SEZ are approved by Indian Government. It results in
tremendous increase in export which is shown in table.<o:p></o:p></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; margin-left: 108.9pt; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;">
<tbody>
<tr>
<td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 130.5pt;" valign="top" width="174">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b>Year<o:p></o:p></b></div>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.5in;" valign="top" width="144">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b>Export<o:p></o:p></b></div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 130.5pt;" valign="top" width="174">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
2009-2010<o:p></o:p></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.5in;" valign="top" width="144">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
INR 2.20 Trillion<o:p></o:p></div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 130.5pt;" valign="top" width="174">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
2010-2011<o:p></o:p></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.5in;" valign="top" width="144">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
INR 3.16 Trillion<o:p></o:p></div>
</td>
</tr>
<tr>
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 130.5pt;" valign="top" width="174">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
2011-2012<o:p></o:p></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.5in;" valign="top" width="144">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
INR 3.64 Trillion<o:p></o:p></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
In year 2010-2011, SEZ created 840,000 jobs in country. SEZ
comprises of 23% of total India’s Export.<o:p></o:p></div>
<div class="MsoNormal">
<b>India and China: Scenario
compared<o:p></o:p></b></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->In India, apart from land grabbing exercise, SEZ
is completely led by private sector. While in China, public sector is too
involved in it.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->China has Command Economy, which means there is
no other way for foreign traders or investor to enter into the country. While in
India it is not which makes its importance a little.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->China has world class infrastructure, more
liberal labor environment, and more attractive tax exemption which give chance
for SEZ to grow properly, while in India there is always dirty political
interference and buckling pressure from left parties which doesn’t facilitate
SEZ and leads to some corruption scam.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->The only advantage which India has from China is
that we have advantage of large English speaking workforce and better knowledge
based industry.<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle">
<br /></div>
<div class="MsoListParagraphCxSpMiddle">
<b>Areas
of Concern<o:p></o:p></b></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]--><i>Role of
State Government</i>: - As every state doesn’t have capacity to build their own
SEZ and can have different political Constraint, therefore central Govt. should
take care of it.<i><o:p></o:p></i></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]--><i>Conversion
of Agricultural land to SEZ: -</i> Though land used for SEZ in India is not much
(75000 acres) which is .0025 % of agricultural land. But proper rehabilitation
and reimbursements should be given to farmer who loses their land. For this
Ministry of Rural development has formulated a comprehensive resettlement and rehabilitation
policy. <i><o:p></o:p></i></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;">ü<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]--><i>Losses in
Tax Revenues: -</i> Because of various tax exemption, India is losing INR
75,000 Crore per year. But if we are able to get more profit out of it like
creating employment, increase in economic activity etc... It’s not a bad deal!!<i><o:p></o:p></i></div>
<div class="MsoListParagraphCxSpMiddle">
<br /></div>
<div class="MsoListParagraphCxSpMiddle">
<i><span style="font-size: 10.0pt; line-height: 115%;">REFERENCES<o:p></o:p></span></i></div>
<div class="MsoListParagraphCxSpMiddle">
<i><span style="font-size: 9.0pt; line-height: 115%;">Wikipedia,<o:p></o:p></span></i></div>
<div class="MsoListParagraphCxSpMiddle">
<i><span style="font-size: 9.0pt; line-height: 115%;">Indian Infrastructure Report 2008,<o:p></o:p></span></i></div>
<div class="MsoListParagraphCxSpMiddle">
<i><span style="font-size: 9.0pt; line-height: 115%;">Article by Amit Abhayankar (Mumbai based Lawyer</span>)<o:p></o:p></i></div>
<br />
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<br /></div>
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4888534466033761014.post-63829044222548136122013-08-24T17:18:00.002+05:302013-08-24T17:18:53.420+05:30Time to review our PPP policy? <div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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)<br />
I have few questions ;<br />
1. Why the companies like GMR,GVK, Reliance Infra are pulling out of such important projects worth almost 16,000 crores after allotment?<br />
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)?<br />
<br />
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.<br />
In this case where is the 'PUBLIC' partnership? how will govt settle this issue? what if same episodes will occur in other projects?<br />
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)<br />
Then what is the purpose of bringing private player in if government has to empty his own pockets ? <br />
Do we need to restrict PPP model upto certain sectors? ex. power, railway, ports<br />
Is it possible to try for actual public partnership in some projects where they are directly in contact i.e. water, waste, road,.?<br />
<br /></div>
Unknownnoreply@blogger.com3