Kerala - Thiruvananthapuram   

Pros and cons of the system

THIRUVANANTHAPURAM: The Swiss Challenger System (SCS) has been widely adopted worldwide, though it has its supporters and opponents. Several States in India have taken this route to promote development in core sectors with varying success. From the Kerala perspective, the method is worth experimenting in many sectors that are languishing for want of development.

The system, sources said, helps private sector initiative and in a way rewards innovation. It also allows third parties to make better offers or challenges for a project, besides presenting an opportunity to the original proposer of the right to match such offers. It also eliminates frivolous proposals or higher cost estimates. It is, however, difficult to strike a right balance on the incentives for the original proposer and the bidder. The legal validity of the system has also not come under scrutiny, sources said.

Madhya Pradesh took the SCS route mainly for work under its Public Works Department. The Karnataka government had adopted this method for the Nandi corridor project and Andhra Pradesh for a major road project in Hyderabad.

Sources point out that the system could function effectively if it revolved around a regulatory framework, based on maximising competition and transparency. The Andhra Pradesh Infrastructure Development Enabling Act in a way provides the regulatory framework for all infrastructure development projects, including the SCS. The legislation empowers the Infrastructure Authority to function independently with clear provisions relating to tenders and conciliation mechanisms in addition to giving legal cover to the SCS and other processes. Karnataka has listed out in detail the core sectors where this method would be developed in its infrastructure policy and has moved in the direction of providing legal cover to this.

A bane of Kerala’s major infrastructure projects is the controversies that override them. There is hardly any that have not landed in courts, with transparency under question and undue delays leading to cost overruns. While Ponnani port development could be an experiment, the government should consider a regulatory framework for projects proposed under the public-private participation mode at the earliest, sources said.

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Pros and cons of the system

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