Reform calls to boost private role in infra

Demands for reforms to take forward infrastructure investment by private companies were made here at the Business Standard Infrastructure Round Table 2011.

Vinayak Chatterjee, chairman, Feedback Infrastructure, a leading servicing agency in the sector, said the biggest fear for the private sector in this regard was the government itself. “It changes stance so often. In the infra sector, of the billions of dollar investment that the government has planned, $500 billion has been sought from the private sector. We stand up and demand accountability and an independent regulatory agreement. The Prime Minister had said there would be an independent regulator. The Planning Commission, too, had spoken of the same. But, nothing has happened till now,” he said.

He also called upon the government to set up a body on the lines of the Foreign Investment Promotion Board to hasten investments in the sector.

K V Raju, economic advisor to the state chief minister, called for a cell in the Planning Commission for taking forward all infrastructure projects mooted by state governments. “Whenever a state government comes up with innovative infrastructure projects, this special cell should work towards securing all kinds of clearances at the central level for such projects. The government of Karnataka is willing to work with the Centre for realising this initiative,” he said.

The government of Karnataka was coming up with a master plan for the next 10 years to identify what infra projects were needed and the level of investment required, he said. It was also in the process of setting up an infrastructure board to take forward the ongoing 105 bankable projects. Raj Kumar Khatri, secretary, infrastructure, of the state government, highlighted the need for viability gap funding in implementing centrally-sponsored projects. “Karnataka government has set up a viability gap fund with an initial corpus of Rs 10 crore for the current financial year. We are also in the process of appointing leading transaction advisors to make an infrastructure investment plan for Karnataka, which will serve as a master plan,” he said.

The transaction advisors would help in identifiying projects and build capacity of government officials involved in implementing PPP projects, added Khatri.

CENTRE’S ADVICE
B K Chaturvedi, member of the Union planning commission, cautioned state governments from tweaking the model concession agreements while awarding public-private partnership (PPP) projects in the infrastructure sector. He also advised them to stay away from favouritism in doing so.

“There is a greater need for transparency in awarding PPP projects. The model of RFQ (request for qualification) and RFP (request for proposal) are proven to be working well in awarding projects involving huge investments. If the state governments twist this process, it will not only earn them a bad name but also slow down the process of development,” he said.

He said the central government strongly advocated transparency in awarding PPP projects. “It gives credibility to the system and encourages the private sector to come forward and invest.In the long run, private sector investment and PPP projects will grow only if we are able to provide a transparent mechanism. We should ensure improving the quality of the service and faster implementation of projects.” During the 12th Plan period (2012-17), the Union government plans road connectivity to all villages with a population of at least 250 and this involves a huge investment, he said.

Karnataka chief minister D V Sadananda Gowda said the mode of implementation of projects in the state was gradually shifting from government sponsored to PPP. There are 105 such projects, with an investment of Rs 80,946 crore implementation in the state, he said. “The state is facing several challenges in implementing PPP projects in the infrastructure sector. To overcome these, the state government is introducing an infrastructure Bill, which provides for constitution of an Infrastructure Authority, to expedite the process of development of projects on PPP formats,” he added.