Accountability issues in PPP

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 process intact rather than the end result. All this is done to keep the government machinery accountable.

Accountable to.. (Willems & Dooren, 2011)

1. Political mechanisms – future elections, political debate, questions of opposition
2. Judicial review – questioning by the courts
3. Superior authority – chain of hierarchical command, government auditors, regulatory bodies, ombudsman
4. Groups – Citizens, Interest groups (NGO’s)

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)

Now, the account holders (people, judiciary, authority) concentrate on the process and not the performance of accounting. It has become easier to hold someone accountable for a 'failure in finance and fairness' rather than on a 'failure in performance'.

What is required now is a change looking at efficiency and value for money.

Few solutions in this regard as mentioned in (Forrer et.al, 2010) are

1. Cost- benefit analysis -  to show (people, judiciary and authority) that the project is done because of the benefits
2. Get social and political support – by increasing transparency and involving people in decision making
3. Performance measurement – based on implementation and benefit to people

Reference

1. http://www.governancenow.com/news/regular-story/how-get-governance-going-plug-policy-paralysis
2. Willems, T., & Van Dooren, W. (2011). Lost in diffusion? How collaborative arrangements lead to an accountability paradox. International Review of Administrative Sciences, 77(3), 505-530. 
3. Forrer, J., Kee, J. E., Newcomer, K. E., & Boyer, E. (2010). Public–private partnerships and the public accountability question. Public Administration Review, 70(3), 475-484. 

Water Redistribution - Learnings from China

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. 

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.

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. 

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.  

[1] http://en.wikipedia.org/wiki/Indian_Rivers_Inter-link

[2] http://en.wikipedia.org/wiki/South%E2%80%93North_Water_Transfer_Project

[3] http://www.economist.com/news/china/21620226-worlds-biggest-water-diversion-project-will-do-little-alleviate-water-scarcity-canal-too