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,

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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.

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