Private firms may invest $150bn in infrastructure

Hello Everybody,

Did you notice this news article in today's 'The Hindu -24.10.09'.

Planning Commission adviser says the Government has set a target to spend around $518bn for infrastructure facilities by 2012. Well, we knew it, isn't it - Our Advisor said so! Accordingly, 30% is expected from private sector (aiming at PPP model) which is around $150bn, another 30% from budgetary resources and the rest of 40% from commercialized budgets of NTPC and power grid (Well, is this feasible? Can NTPC and Power grid aide this much amount?). The Adviser, Mr. Gajendra Haldea, planning commission, also states that they expect a quantum leap in the infrastructure development during the 11th FYP from 5% to 9% (Is our present rate only 5%?). they also expect PPP model from developed countries...Because markets in India offer huge opportunities (always quoted statement) and returns on capital would be higher than in a developed country (Ok...facts here). How does all this sound?

A new Indian Public Sector

Following Professor Sitaram's lecture highlighting the importance of heroes and how even public companies can also succeed, here's an interesting story which I came across some time ago.

http://www.indiatogether.org/2009/jul/eco-bridge.htm

The Bihar Rajya Pul Nirman Nigam, which was on the verge of being liquidated, has now turned the corner and built over 330 bridges in three years. The cause has been championed by Mr. Pratyaya Amrit ( :-) ) , an IAS officer of the batch of 1991.

The best part about this story is that it was effected in Bihar. Presently, the company is looking at expanding beyond Bihar and building bridges in other states!

The takeaways from this story are multifold. For instance, Mr Amrit came up with the idea of the “Mobile Inspector” system where all Executive Engineers have a GPRS enabled sim card in their phones. They can go to the site, photograph the bridge, take out their pencil stylus and fill in details like the name of the bridge, its location and status. It is then directly sent to the chairman who sees it on his computer in his office. Everyday, the Chairman monitors the progress. There is thus, a new sense of accountability.

The story is a great read and was shared to me by Vikas. I felt it has a lot of importance for this class. Comments please?

Regards,

Amrit Acharya

Hogenakkal Water Supply Project

Page 13 of today's Hindu has a tender for Hogenakkal Water Supply and Flurosis Mitigation Project. Some interesting observations:

1. It says "Re-Invitation", presumably implying that no one responded the first time around. What could be the reasons? Has anything changed this time around?
   
2. The GoTN has recieved financial assistance from the Japan International Cooperation Agency.
   
3. The contract is for construction and maintenance for a period of five years, and is unit-rate based.
   
4. The pre-qualification documents are available for free, possibly to encourage more small time contractors.

Any comments/observations?

Harsha