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For better infrastructure
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The role of Government-sponsored corporations in public works needs a relook, says K. Sukumaran
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The cornerstone of Indian economic development has been ‘mixed economy’ with the objective of evolving a socialistic pattern of society. Private initiatives for growth and progress came as a post-script to this approach.
In this process, foodgrains production and core industries were the major concerns, initially.
The role of infrastructure in development came to the forefront only in recent days. Again, the Public-Private Participation (PPP) model got its due as a result of the push from the private sector, for accelerating growth. Let us trace the much treaded path and chart the possible future journeys in this initiative.
Policy and planning
The preamble to the Five Year Plans often underscores the government policy for growth in different sectors. The first plan was fully devoted to the twin objectives of agriculture and heavy industries.
The subsequent plans contained a diversified approach. However, infrastructure, as we now understand like development of national highways, quadrilaterals, metro rails and ring roads, was not in the scheme of many plans.
Not that the steel industry, hydro power, dams and irrigation projects are not a sort of infrastructure. Certainly, they are.
However, intensive development of highways, building of aeroplanes, ships, new airports, high speed railway systems, mass transportation facilities and similar plans went up the development ladder only during the last 10-15 years.
The starting point
The establishment of the National Building Construction Corporation (NBCC) can be considered the forerunner in setting up Government agencies for carrying out construction activities by the State.
The first steps towards infrastructure development were taken with the setting up of Hindustan Shipyard, Hindustan Aeronautics, Hindustan Machine Tools and similar companies in the public sector.
SPVs
Design and development of these core sectors rested solely with the Central Government whereas building of roads, irrigation facilities and city-centric mass transport facilities were within the realm of the State Government through its Public Works Department.
It was realised later that the ability of the Government departments to execute and maintain large infrastructure projects need to be supplemented by Special Purpose Vehicles (SPVs) and this led to the formation of the Highways Authority, Road Development Authority, Land Army Corporation and the like.
Land Army
Two SPVs incorporated by some States including Karnataka are worth mentioning here. In the wake of the implementation of the rural housing programme in the Seventies, the Karnataka Land Army Corporation Ltd. was established in 1974. The Corporation was placed under the Panchayat Raj Department.
The main objectives of the KLACL have been:
• Execution of rural development projects, which are labour intensive.
• Creation of employment opportunities to rural people by taking up local works.
• Help build infrastructure such as irrigation dams, bridges, schools, hospitals.
• Take up works directly in order to cut down intermediary cost.
KRDCL
The Karnataka Road Development Corporation Ltd (KRDCL), another construction agency, was incorporated in 1999 as a wholly owned Government of Karnataka company.
The main objectives of this company are:
• Building of infrastructure projects.
• Build/develop, maintain and operate roads, highways, bridges, and other public facilities.
• Identify projects suitable for implementation under BOT (Build, Operate and Transfer) model.
• Invite bids and award contracts for works.
Some of the projects taken up by KRDCL are:
• Bangalore-Mysore Highway.
• Belur-Bilikere Road.
• Jewargi-Bijapur Road.
Mode of working
In all, construction of 147 bridges has been undertaken by KRDCL so far. In addition, maintenance of State highways in 27 divisions is handled by the Corporation.
Being organs of the State Government, funds required for the working of these companies are allocated from the State budgets.
Though the management is supposed to be run professionally, most of the staff are on deputation from the Government.
When the Government allocates/awards works, competitive quotations are often dispensed with, especially in the case of the Land Army Corporation.
The RTI Act requires full transparency in Government functioning, and this is not in consonance with the objectives of establishing these outfits.
The conflict
The Public-Private Partnership model has been accepted as a practical system when very large projects involving substantial funds layout are taken up.
The PPP, however, is more a professional management concept. It does not compromise on procedures in identifying projects, selecting of consultants and contractors, inviting of quotations, supervising the execution of the projects and the like.
Under the PPP model, the relevance of Government agencies and corporations disappears totally.
All activities are to be transparent and competitive in a PPP model. No preference of any sort can be shown to any agency.
Government-sponsored corporations are totally outmoded today. They may even become irrelevant in the years ahead of us and they need to be altogether eliminated.
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