Govt officials cannot deal with such projects: Mayaram

Arvind Mayaram, Secretary, Department of Economic Affairs, stressed the need to have a regulator for the road sector to handle disputes in public-private-partnership (PPP) projects.

He said Government officials do not have the capacity to deal with PPP projects where contracts between the Government and private sector span 20-30 years, thus requiring constant interaction and adjustment between the two parties based on the changing circumstances.

“Traditionally, we were used to paying the private sector to do a job in two-three years, after which the relationship ended. How to manage relationships in post award framework is an area where there is scope for improvement,” Mayaram said speaking at a FICCI conference here on Monday.

The regulator can help manage when the Government’s relationship with the private sector gets rocky, said Mayaram.

Omnibus Bill

Incidentally, the Planning Commission has taken a stance against the idea of having a road sector regulator to deal with such issues. It has rather supported the idea of an omnibus Bill, which will spell out ways for dealing with disputes in PPP projects.

Infrastructure

The Government has been increasingly wooing the private sector to build infrastructure through public private partnership basis.

In 2005, it decided to bid out all road projects on BOT-toll mode first, where the private developer designs, finances and builds a road, maintains it, collects toll from users for a long-term period. Vijay Chhibber, Secretary, Road Transport and Highways, said the Ministry is working on a proposal to have a regulator, as was announced in the Finance Minister P. Chidambaram’s Budget speech this year.

Advisory role

The regulator would have an advisory role on renegotiation of existing contracts, setting of service standards, project entry and exit options, tariff structuring and toll mechanism and knowledge management, according to the proposal under the consideration of the Road Ministry.

It would also have an adjudicatory role on contract dispute resolution, renegotiation of future contracts and enforcement of contractual provisions.

This is for the first time that the Highways Ministry has officially spelled out its detailed proposal for the regulator.

Source- http://www.thehindubusinessline.com