The Hindu : National : Transparent policy soon on PPP projects

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Sunday, Oct 08, 2006
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Transparent policy soon on PPP projects

Special Correspondent

Manmohan stresses need for private participation

— Photo: Shanker Chakravarty

INFRASTRUCTURE DEFICIT: Prime Minister Manmohan Singh and Railway Minister Lalu Prasad at a conference on `Building Infrastructure: Challenges and Opportunities' in New Delhi on Saturday.

NEW DELHI: Prime Minister Manmohan Singh on Saturday promised the nation an independent, transparent policy along with an enabling regulatory mechanism for public-private partnership (PPP) projects. Substantial private participation would be required to close the huge gaps in infrastructure by 2012 at a cost of Rs. 14,50,000 crore, he said.

Inaugurating a mega conference on `Building infrastructure' here, Dr. Singh said: "In the coming weeks and months, we will be finalising the remaining elements of the policy, regulator and institutional framework for PPPs in infrastructure."

Hailing the emergence of India as a major economic force in the evolving global economy, he said the deficit in infrastructure was a "matter of concern." "Our growth potential will be realised only if we ensure that our infrastructure does not become a severe handicap. The quality and capacity of our infrastructure is certainly a matter of concern to one and all. We must deal with this deficit."

The power sector was the bane of the economy, he said and asked the States to take immediate steps to make the key infrastructure segment financially viable. In turn, "the bane of the sector seems to be the high transmission and distribution [T&D] losses, which account for almost 40 per cent of the electricity produced. No civilised society nor a functional commercial entity can sustain losses on such a scale."

Advocating a time-bound reduction in T&D losses along with an increase in generation capacity, he said: "We must also open up the power sector to competition as that would not only provide a choice to consumers but also bring [about] efficiency and cost reduction."

Partnership approach

The Prime Minister said the partnership approach was best suited for infrastructure projects. "Public resources available for investment in physical infrastructure will be limited... it is imperative that we explore avenues to increase investment in infrastructure through a combination of public investment, public-private partnerships and exclusive private investments, wherever feasible."

To ensure this, Dr. Singh called for clarity in the policy and regulatory framework with assured fair returns to investors even while protecting consumer interests. Tariffs and service quality needed to be regulated and consumer access should be protected.

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