Karnataka - Bangalore   

‘PPPs not a panacea for all infrastructure-related problems’

Bangalore: The idea of using public private partnerships (PPPs) as a means of financing infrastructure projects was discussed at a seminar organised by the Bangalore Chamber of Commerce and Industry (BCIC) here on Thursday.

Devesh Agarwal, chairman of the Infrastructure Committee of BCIC, said an investment of Rs. 14.7 lakh crore was needed for funding infrastructure projects during the Eleventh Five Year Plan. “Clearly, the Government cannot bring in this quantum of funding,” he said. The PPP, he said, “is an innovative mechanism that leverages the agility of the private sector with the reach of the Government.”

Somak Ghosh, Group President, Corporate Finance and Development Banking, Yes Bank, cautioned that PPPs ought not be treated “as a panacea” for solving all theinfrastructure-related problems. Explaining the evolution of the PPP model, he pointed out that infrastructure used to be considered a “public good” prior to the entry of the private sector as an active player in the sector. However, the private sector’s “new role” was made possible by the Government’s policy which aims to draw private investment in infrastructure.

Since running infrastructure projects on “completely commercial lines” may make them unviable, the Government provides grants so that the cost to end users is kept low.

Mr. Ghosh pointed out that a characteristic feature of infrastructure projects is the fact that while there is substantial expenditure of foreign exchange, the earnings from the project are not in terms of foreign currency.

“Unless the foreign exchange component of such projects is fully hedged, it is a recipe for a disaster,” he said. Special Secretary, Infrastructure Development, Gaurav Gupta, said the Karnataka Government had initiated several steps to further PPPs in the State for building infrastructure.

The State had incorporated provider charges and the “user pays” principle into its scheme for PPPs, he added.

A. Ravindra, chairman of the, Centre for Sustainable Development and former Chief Secretary, said: “PPP has become a mantra in recent years.”

Referring the PPP model, which was used to establish the Bangalore International Airport Ltd., he pointed out that even sections of the private industry were questioning whether “BIAL enjoys monopoly rights over a public infrastructure.”

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Three-day meeting of civil engineers begins
Sarang flies in Europe
U.S. expats can vote from India for November elections
Probe sought into boy’s death
Bhagyalakshmi deposit doubled
Power cut inevitable, says Eshwarappa
Lokayukta nets five officials
Non-Kannada film producers enthused by decision on tax
An additional burden on the State exchequer
It’s an elephantine problem for them
Varsity signs MoUs for collaborative research
HC: put on hold mining in forest areas
‘Don’t allow event’
‘PPPs not a panacea for all infrastructure-related problems’
A nightmare all over again for them
People in Chitradurga deprived of wages under NREGS
15 districts receive deficient rainfall
One-way rules: fewer accidents in Bangalore
BSNL plans to have four million mobile subscribers
Schools’ plea on English adjourned
Tiny hands plant saplings SCHOOL NOTES
IT Department to be handed over cash
Gang raids house in Peenya CriMe NOTES
City taxi operators allege discrimination
‘Fire safety is a social responsibility’
Judge heckled
Bescom gives customers a shock
Release arrested farmers: Vatal
You need to move fast, officials told
Centre opposes relocation of Tadari power project
State, BHEL to sign pact for joint venture projects
Amarnath row: BJP plans protest
‘Corruption is a grave violator of human rights’
Educate children, workers told
Bangalore Today

Copyright © 2008, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu