Govt’s pre-fixation with PPP not good for infrastructure: Parliamentary Panel

May 10, 2013

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PTI : New Delhi, Sun May 05 2013,

Urging the government to come out of “pathological prefixation” with public-private-partnership (PPP) model, a Parliamentary panel has asked it to build through budgetary support all highways where bidders have failed to respond.

“PPP as a model for the development of road project needs to be reviewed seriously in the light of our experience so far in this regard. That private capital is mainly for profit is borne out by the fact that the profitable projects are being bid out fast,” Standing Committee on Transport, Tourism and Culture has said in its latest report.

Committee Chairman and CPI-M MP Sitaram Yechury said: “Unfortunately the government has pathological pre-fixation with PPP which is hindering infrastructure development in the country as driven by the objective of profit, private sector is not coming forward to bid for unprofitable projects.”

Stressing upon the need for government’s thrust on infrastructure Yechury said: “No other country whether USA or China depended on private sector for building its infrastructure unlike India. Unfortunately the allocation has been reduced drastically for infrastructure as Planning Commission is encouraging private partnership.”

He said only such projects were bid out in the PPP mode where profit is envisaged, asking as to how there was no response for 13 bids invited by the NHAI last year. The report said that a vast country like India needed faster connectivity to its length and breadth and should “adopt an alternative model of project development which is development driven and not profit driven”.

It added: “Since profitable projects are sold out first, the government is facing problems in getting bidders for such non-profitable road projects as those in Left Wing Extremist and North-East Areas.”

Emphasising that India needs faster construction of roads, the Committee recommended that “all such projects without bidders should be developed with the budgetary support from the government and the Planning Commission needs to be more practical and careful about its role and function”. National Highways Authority of India (NHAI) had set a target to award projects for 7,464 km of roads during the last financial year, of which only projects worth 879 km could be awarded.

Source – http://www.indianexpress.com