Addressing bottlenecks is key to sustaining growth
M. Murali, Director General, National Highways Builders Federation, points out that, in order to revive the road sector and increase the inflow of investments, the new government will not only have to address the challenges and the concerns with urgency,
other procedural issues. In this context, one cannot ignore the fact that the global economic downturn and the subsequent economic uncertainty created within the country has also contributed to the slowdown in the road sector.
In order to revive the road sector and increase the inflow of investments, the new NDA government at the Centre will not only have to address all these challenges with urgency but also at the same time balance the interests of the users and investors.
Considering the vital role the road sector plays in the country’s economy, it may be noted that the concerns with regard to slowdown of reforms, governance, statutory clearances and loss of investor confidence need to be addressed immediately.
As far as the country’s overall infrastructure development is concerned, international experience suggests that the success of PPP projects requires a single
objective of better services for the public at a reasonable cost. This can be achieved through realistic and reasonable risk transfer while addressing the public concerns. The Indian PPP model needs to adhere to such objectives and best practices. In this pursuit, easy availability of long-term private capital is an essential requirement. Fostering greenfield investments in public infrastructure with appropriate user charges and transparent revenue and risk sharing agreements can enhance international capital inflows into productive ventures.
Above all, selection of the right PPP model for the right project at the right time through realistic planning will go a long way in facilitating the country’s infrastructure development.