Govt for independent regulators to promote PPP projects

The government today made a case for strong independent regulatory authorities to promote Public-Private Partnership (PPP) projects in sectors like coal, road and rail.

"We do not have enough independent regulators... Their terms of reference are not properly defined to meet all the challenges that the sectors are facing.

"The regulatory authorities have to be empowered and they have to be given enough authority to be able them to deal with the issues which are arising on the regulatory side," Economic Affairs Secretary Arvind Mayaram said at a Ficci event here.

Budget 2013-14 has proposed formation of a new regulator for road sector and in Rail budget there has been a announcement for tariff regulator.

"The coal regulator which was earlier announced is also likely to come up this year. We are gng to see some more regulators coming in," he said.

Mayaram said there was a need for re look at the existing regulatory authority and ways to further empower them.

"We need to look deeper to create more regulatory authorities independently. The independent entities to be able to look at problems -- independent of the government and other party," he said.

Referring to the problems being faced by PPP projects, Mayaram said the government cannot bailout projects which fail due to commercial reasons.

However, he added that the government should step in if the failures are on account of regulatory hurdles.

"We need to make ours distinctions between these two. Wherever it is commercial failure, the private sector must take the hit, wherever there is a regulatory failure government must step in," he said.

The distinction between the two kinds of failures is necessary, Mayaram said, adding otherwise the PPP "will run into another kind of problem... The government (being) accused of crony capitalism. Effort should be to salvage the projects and not allow anybody to fail".