From the Editor’s Desk

Dear Friends,The response to the first coloured issue of ‘Update’ has been overwhelming. Officers have complemented the editorial team, for the change in form and content of ‘Update’, but they remain content with just that ! To make the quarterly more interesting and more meaningful, you all need to contribute, by way of, articles, stories, experiences etc.Good governance is in focus once again. A lot of thinking is taking place at the level of the Central Government. A changed system of appraisal for the officers in on the cards, which will evaluate them more objectively. The present system of evaluation is very subjective and is not able to differentiate the chalk from the cheese. A recent article in some newspapers also suggests that those IAS officers, who will not be empanelled for becoming Secretary to GOI, will be asked to take retirement. This brings the issue of efficiency, integrity and knowledge upgradation to the fore ! The State Government must also take major initiatives to improve governance and such measures should be thought of about the services under the State Government too !Improvement of the delivery mechanism has always been a major challenge. The governmental machinery must deliver, quantitatively and qualitatively both. The people, who pay for our salaries and allowances, can’t be made to suffer because of the arrogance, ignorance and callousness of the government functionaries ! And that will be possible only with the introduction of a comprehensive monitoring system, combined with a system of reward and punishment, which does not reward the inefficient and the corrupt and does not punish the upright. There are very few departments which set our comprehensive measuring parameters for the officers and the employees. And to my mind, the assumption that the Government Servants will work due to intrinsic motivation, does not work !I am personally grateful to the contributors of this issue. All of them have taken pains to write beautiful pieces on my request. I will be going to IDS, Sussex by the end of this month. Sri Umesh Sinha, IAS (1986) will henceforth be editing the esteemed quarterly. I want to place on record, my heartfelt gratitude to the colleagues on the editorial board and all the IAS officers in general for providing me wholehearted support in giving a new look to the magazine.

(Amit Mohan Prasad)

TIME FILES

T. George Joseph, IAS (1971)
It happened some twelve years back. A friend of mine who had just retired from service asked me about my year of retirement. How many years were left before I was to retire from the IAS? I told him that I had completed only two thirds of my service and the last one third was still left. He smiled. He said that he was also under the same delusion before he had actually gone through those years.

Delusion? I had a total of thirty-three years of service and eleven years were still left. That made exactly one third of my service period.

He said he was not disputing the arithmetical calculation. He was referring to the length of time recorded by my mental clock. In his opinion the last one third of service would disappear in a flash. It would fly two or three times faster than the earlier phases of service.

I thought the logic was absurd. Since I had no reason to doubt my friend’s integrity, I accepted the phenomenon as an isolated experience of my friend. I was sure that my friend’s theory had no universal application.

Twelve years have passed. The last one third of my service is over. I am in the extended period of those two years when the retirement age was raised to sixty. To my great surprise I have also started feeling the same way as my friend. I also felt that time flew at an unusually faster pace in the last part of my service.

Or shall I say in the latter part of my life? That is what I thought when I read the following poem.

The River of Life

The more we live, more brief appear
Our life’s succeeding stages:
A day to childhood seems a year,
And years like passing ages.

The gladsome current of our youth,
Ere passion yet disorders,
Steals lingering like a river smooth
Along its grassy borders.

But as the careworn cheek grows wan,
And sorrow’s shafts fly thicker,
Ye stars, that measure life to man,
Why seem your courses quicker?

When joys have lost their bloom and breath,
And life itself is vapid,
Why as we reach the falls of death,
Feel we its tide more rapid?

It may be strange — yet who would change
Time’s course to slower speeding,
When one by one our friends have gone
And left our bosoms bleeding?

Heaven gives our years of fading strength
Indemnifying fleetness;
And those of youth, a seeming length,
Proportioned to their sweetness.

This poem was written by T. Campbell, a famous English poet of the nineteenth century. Obviously he had written it when he was in his old age. In the fifth paragraph he refers to his friends departing from this world.

After I had my own experience to guide me and a famous poet to support the theory, I got convinced that my friend’s feeling was not a chance occurrence. It was not an isolated individual experience. The hypothesis was universally relevant. Poets are known to give expression to universal truths that normally escape the pedestrian sensibilities of average men.

Poet Campbell has raised a question. Why do stars that measure the life of men speed up their course in the succeeding stages of a man’s life? He has answered the question in a poetic manner. He says that God has been kind in making it this way. When a man is old and weak, mercifully time passes quickly and when he is robust and strong, time has been asked to linger on. This is something God has done to make our life more agreeable.

This is not a straight answer to the question. It is only a poetic flourish. Poets are in the habit of hoodwinking the readers by indulging in some flight of fancy to surprise and confuse. But I have decided to analyse this question in a reasoned manner and find out a satisfying answer.

We all know that time is a relative concept. Time means differently to different people. It means something to a very busy executive who cannot even find enough time to sleep and something else to a bored housewife who would shudder to think of the day when Jitendra’s daughter stops producing those serials of Saases and Bahus.

At different times, time means differently to the same person too. For a newly married husband waiting in his bedroom on the first night for his coy bride to appear at the door, every moment would look like century. A few years later when he walks back home knowing fully well the consequences of overstaying at the office and forgetting his marriage anniversary, time would appear to be flying at the speed of light.

Then you recollect the different stages and compare them. For this, you have no alternative but to depend on your memory.

Memory has a strange character. It allots space only to remarkable events. Unimpressive events do not get registered. Like a historian, human memory ignores the minor events of any period. Then it assesses the length of each stage on the basis of the number of events registered on it. If more events were registered during a particular stage of life, memory would consider it longer. If fewer events were registered, that stage would be reported as brief.

So we come to the crux of my argument. The earlier stages of our life appear longer because more events of those days are registered in our memory. The earlier stages have more notable events because at that time we were on a discovering spree. At the social level, we had discovered a number of interpersonal patterns of relationships. Even before that, we had discovered the magic of several natural phenomena. For example, the first time we saw the majesty and the grandeur of the sea was a marvelous episode which made an indelible impression on our memory. Later we might have seen the sea several times. But they are repetitions and are not registered. First kiss is deeply engraved in the recesses of our memory. We might have received many more kisses in later life. But the administrator of our memory would dismiss them as colourless repetitions.

This sentiment has been expressed in a famous poem by William Wordsworth.

“There was a time when meadow, grove, and stream,
The earth, and every common sight,
To me did seem
Apparelled in celestial light,
The glory and the freshness of a dream.
It is not now as it hath been of yore;
Turn wheresoe’er I may
By night or day,

That is one concept of the relativity of time. When you are impatiently waiting for something good to happen, time moves slowly. When you are anticipating something unpleasant, time passes very fast. Does this paradigm explain the phenomenon mentioned in Campbell’s poem? Is it because in the earlier phases of our lives we wait for fantastic things to ensue and in later stages we foresee unwelcome adversities in the making? Let us see.

It is true that in the early part of life, one has only good things to look forward to. In the subsequent stages, the dreams become fewer and less pleasing. A small boy or girl eagerly waits for the time when he or she would become an attractive adult. Have we not seen a small girl secretly wearing a sari and appreciating herself in front of a mirror? And a boy stealing an eyebrow pencil from his mother’s chest and drawing a moustache, which is yet to sprout? But we would never come across a middle-aged man or woman trying to put on the appearance of an old person and appreciate the reflection in a mirror. Definitely there are a lot of good things to look forward to when you are younger; only unsavory things to anticipate in later stages of life. Does this explain the difference in the length of time at different stages of one’s life? I am not sure. We have not looked at the issue from the angle of social status.

Take the case of an IAS officer. When he is in the middle level, he is dreaming of the day when he would become the Chief Secretary and boss over the whole tribe. In physical terms he may not like his appearance at such an age, but in terms of social recognition he would die for it. How can we say that he has nothing but unpleasant prospects to look forward to? In terms of power and status his eagerness is nothing less than the aspirations of the boy who sports a moustache with his mother’s eyebrow pencil. Similar is the case with politicians, advocates or doctors.

Think of politicians. A middle-aged politician dreams of reaching higher positions of power when he grows older. An old politician may be moving on a wheel chair, but he would not stop dreaming of some strange coincidences that could catapult him to the highest seats of power. He would justify his dream on the example of Narasimha Rao. Advocates earn more when they are older. Doctors become consultants and achieve more respect in their old age. Entrepreneurs use the benefit of their experience to conquer new heights. None of these professionals look forward to a dip in their social status in the older part of their life. So how can we say that, time moves faster because a person ceases to have worthwhile dreams when he crosses his youth? I have to look for some other reasons to explain the issue raised in Campbell’s poem.

There is a second concept of the relativity of time. To illustrate this concept I would refer to a discussion I had with my roommate in the academy during our foundational course. My roommate was an officer of the Indian Statistical Service and was a Ph.D. in Statistics. Once he narrated to me how he had felt during the last one week of finalising his research paper. That was so absorbing that he did not sleep for two continuous days. He did not know how fast that one week had passed. Then I would invite him to compare that one week with the one hour of torture we had to undergo every day listening to our Professor in Public Administration. This Professor was a great bore. My roommate would swear that the one hour spent before this professor was definitely longer than the last one week of finalizing his research paper.

This concept is related to a man’s interest in the work. If the work is interesting, time moves fast. If the engagement is dull, time drags. Let us see whether this theory any way helps us to clarify the question raised by the poet?

Here also I should admit that the answer is not satisfying. If I go by this theory I have to accept that, work in the last phase of my career was enormously interesting, which in fact it was not. I had all my interesting jobs in the first one third of my career. The second one third was also not bad. But the third one third was positively uninteresting. That was the time when I was mostly in the Secretariat dealing with files and not with people. So the work was positively dull and drab. When you reach the higher echelons of your career, the jobs become important, but less interesting. So I cannot quote my second concept of time-relativity to explain the question posed by Campbell in his poem.

I think the key to unravel the question raised by the poet is human memory. As I have pointed out earlier, Campbell was old when he wrote the poem. He was trying to compare the duration of each stage of his life on the basis of his memory. What he did was to spread his childhood, youth, midlife, and his old age on the table of his memory and find out which was longer and which was short. My friend and I also probably did the same thing.

In fact we can compare the different stages of our life only by placing them parallel to each other in our memory. There is no other way we can compare them because comparisons can be made only after we have lived those stages. You cannot look at a phase of your life before that has actually taken place. You have to wait till the phase has really been lived.

The things, which I have seen, I now can see no more.

Whither is fled the visionary gleam?

Where is it now, the glory and the dream?”

Wordsworth had written this poem when the wonderment of discovering things had waned in his life. We also experience the same decline when we grow older. Things do not excite, inspire, or electrify, because they are repetitions. We have lesser and lesser matters to discover and more and more repetitions to endure. That is when time appears to be flying fast. Then time becomes weightless. It is not burdened by the load of memorable materials.

I think I have found the clue to the puzzle raised by poet Campbell, and my friend, and myself.

(The Author is Administrative Member, Board of Revenue )

Metamorphosis of the IAS

In The Last 25 Years
V. N. Garg, IAS (1980)
“What the caterpillar calls the end of the world, the master calls a butterfly”, so said Richard Bach in his book ‘Illusions; the adventures of a Reluctant Messiah’. This year in September the 1980 batch of IAS (our batch) completes 25 years of service. It is a stage to reminisce, to remember and to feel the nostalgia of sweet remembrances of things past. It is time to reflect on “who moved my cheese”. What has happened to the caterpillars who became butterflies? Has the world ended for the butterflies?

Yea. There have been changes. Some of these have been vital, sweeping and epoch-making, so much so that life would never be the same again. Some changes went on expected lines while others were totally unexpected, high voltage, swift changes, making waves at the speed of light.

First and the foremost. The changes brought about by the economic reforms, by the policies of liberalization, privatization and globalization. No doubt, on a macro level, their sweep was large. For some people, these changes were like bright, sunny spring of hope and progress. But for others, these were like a winter of discontent.

With liberalization, the regime of permits, quota and licenses was dismantled. With this went the ‘authority’ to oblige the industrialists and entrepreneurs by giving some of them selective preference over others in the grant of licenses, permits and quotas. The Director of Industries, a cadre post for IAS, which used to be a coveted post remained no longer so after liberalization.

Liberalization also saw the gradual diminishing of the role of other departments and their related posts, like those in Civil Supplies Department. I remember how in early eighties, it was difficult to procure a cooking gas connection or a few bags of cement. Those were the days of scarcity, rationing, permits, permissions and the Essential Commodities Act at its height. The availability of cooking gas connection or cement is no longer a problem. Administrative, technological changes and technology mission on telecommunication brought instant connectivity and a network of PCO’s throughout the country. I recall, as late as in 1988, as District Magistrate of an important district, I could not contact Home Secretary telephonically on an urgent matter of law and order because STD calls did not mature and ‘hotlines’ were down and cold.

In mid-eighties, we would covet the posts in corporate sector and public sector undertakings. Slowly, as these corporations became financially sick, and the word ‘privatization’ got a respectful acceptance in official lexicon, these jobs changed from entrepreneurial to those involving nurturing of sick units or selling these to private sector. Not that the lure for corporate sector has totally disappeared. It still remains but with much reduced lustre. The holders of jobs in these corporations have substantially less say in influencing the ‘policies’.

Globalization impacted the civil service subtly but considerably. It also compelled civil service to modernize. Slowly multinational corporations came to our country, offering jobs to young graduates from IIT’s and IIM’s at salaries much more than those in the IAS. MNC jobs became powerful competitors to IAS as careers for brilliant youths of the country. This also affected adversely the monopoly of the IAS as the best career option for the youth. In the late seventies, the question was not whether IAS was the best career. It was nearly a universally accepted axiom. The question was how to get into it. Globalization has challenged this axiom effectively, and to some extent successfully. The paradigm shift has taken place.

With globalization and liberalization, the interventionist role of the state has reduced gradually, allowing greater role for free markets. Larger economic and political forces have taken this direction at the global level, after the fall of Berlin Wall and the collapse of communism in Russia and other European countries in 1989 onwards. But these also had their impact on our very own-the IAS.

In early eighties, we used to talk fervently about the removal of poverty through antipoverty programmes like Integrated Rural Development Programme. Such schemes were then at the top of agenda of the government. Not any longer now. To a majority of the civil servants, such programmes no longer appear worthwhile and effective in achieving poverty reduction. In fact, we have stopped looking at poverty as an issue, or as a problem, as if it no longer existed! What is worse, we no longer believe in doing anything about the poor, whom we have left at the mercy of cruel free markets. This mindset definitely needs a change .

Then came the 73rd and 74th amendments to the Constitution of India, as also the Jawahar Rozgar Yojana. Enhanced role of Panchayats at gram sabha, block and district level in the allocation and utilization of funds progressively diminished the role of District Collectors (IAS) and the lower bureaucracy at the field level in rural development schemes. The constitution of State Finance Commissions also resulted in reduction of the role of IAS at the state level in allocation of resources to the elected bodies at the district levels and below.

The five years plans in post-independence era had seen the IAS in the avtar of a development Messiah at the district level. It did change the colonial image of IAS from the ‘Collector of land revenue’ to the agent and harbinger of development. But globalization and liberalization coupled with 73rd and 74th constitutional amendments metamorphosed these ‘reluctant messiahs’ of development into the ‘gods of small things’ doing’ assorted development and regulatory things on behalf of the government. The role of the government itself shrank and along with this,the role of the IAS also reduced. Their power, pelf and prestige in the countryside also took a downward plunge.

The last twentyfive years have also seen the rise in literacy, awareness and consciousness levels of masses, both in rural and urban areas. People have become more articulate and vocal in voicing their demands and problems. Better roads, transport network and communication facilities have enabled people in the remote villages to contact the authorities at district and state levels. This has raised both the accountability and expectation levels of public from the civil services especially the IAS. When these heightened expectations clash with the diminished role and authority of the IAS, there is disillusionment and crisis. The faith of people in the entire governance system is shaken. Such consequences are unfortunate. Sometimes out of sheer desperation, sometimes out of compulsion to find scape-goats and sometimes just to teach a lesson, senior civil servants are transferred or suspended on flimsy grounds or on petty issues. This is sad and unfortunate and results in further widespread demoralization in bureaucracy and despondency in masses, because things never improve with such shortsighted measures.

At centre and in a large number of states, the period after 1989 has also been the period of political instability, political insecurity, criminalization of politics, defections and coalitions. These developments saw unprincipled political interference (with a few exceptions) at different levels of governance on a scale unparalleled in the history of India. This sometimes resulted in unnecessary transfers, postings, suspensions and even humiliation of the IAS and other senior officers for petty reasons and for gaining cheap popularity with the masses. The result was a steep deterioration of the authority and status of IAS officers in particular and bureaucracy in general. Our governance system has slid downwards many miles in the last 25 years.

Over the past 15 years or so, Public Interest Litigation Writs have provided opportunity to public spirited individuals to redress public grievances with the help of an activist judiciary. Due to many highly publicized cases involving suspension of senior officers, as a consequence of orders of courts, PIL’s have become one of the major ways of fixing accountability of bureaucrats and even politicians at senior levels. While often there have been criticisms against the activist role of judiciary at higher political and legislative levels including Lok Sabha, the emergence of PIL’s has become a unique feature of our polity. Among other things, PIL’S have made bureaucracy including the IAS, more accountable to law and Courts, diluting their accountability to political levels to some extent. This has also put some checks on unbridled colorable exercise of power by the politicians and bureaucrats.

There is a widespread impression that as a class, the IAS have become more corrupt, more self-centered, more compliant and less knowledgeable. The idealism, the spark, and ‘the bright stars in blue eyes’ which used to be the hallmark of ‘caterpillar’ days is not longer there, long after they became ‘butterflies’. Each IAS has become an ‘emotional island’, with increasing chasm between the members of this elite service.

It is important to ask what the members of IAS could and should have done in the face of large scale changes in the world, where global forces of capitalism and free markets reduced the role of the state itself. What should be done for future? Is a government needed in a fast emerging free market economy? Though opinions fluctuate wildly, I believe that free markets will continue to need an interventionist state in the areas of education, health infrastructure and other sectors to provide safety net for the poor. Free markets also need effective regulators and institutions to regulate and ensure healthy competition and to prevent monopolies from distorting the free markets. All this requires an honest, effective, modern and knowledgeable civil service accountable to the political executive, law of the land and the people. IAS can easily fulfill this role.

In India globalization and technology provide unprecedented opportunities to civil servants to serve the society, especially the poorer and weaker sections with greater speed, efficiency, quality and transparency. The web enabled land information systems and similar e-governance methods can reduce the land disputes, facilitate and increase the pace of development and provide more accountable and efficient delivery and public grievance redressal systems. Innovative approaches like Lok Vani in district Sitapur and adoption of ISO 9001 2000 international quality management system (QMS) and its certification by an internationally accredited certification agency in U.P. Housing and Development Board have demonstrated that this can be done.

While much of the needed changes have to come from within the IAS itself, we also need politicians with a vision, who can withstand the pressures of the democratic political process, and who can also understand and support the complex and stressful pressures on conscientious civil servants, and maintain the balance between the political formations and bureaucratic structure, symbolized by the IAS at senior levels. Otherwise all of us in the governance system will be swept by the wayside, asking each other the question: “Who moved my cheese ?”

(The Author is posted as Judicial Member, Board of Revenue)

Letters to the Editor

Dear Amit, Congratulations ! Update is before us in the shape of a magazine and the form and content is great. Ravindra Singh Pr. Secy., Industries	Dear Amit, Your team has done a wonderful work. The Update is really a matter of pride for us. Keep it up ! Rakesh Garg M.D., National Handicapped Welfare Corporation
Dear Amit, Saw the new issue. The work done is commendable. Rakesh Kr. Mittal Commissioner, Lucknow	Dear Sir, Hearty Congratulations. You scored a Century on debut. Mr. T. George Josheph’s article “The Road Not Taken” is a masterpiece. Keep up the good work ! Your team has done a wonderful work ! M.K.S. Sundaram DM, Jhansi

Public-private Partnerships

In Infrastructure Development
D K Mittal, IAS (1977)
Given the externalities, high risks and low rates of return, infrastructure financing cannot be left solely to the private sector. At the same time, given the Budget constraints and inherent inefficiencies, the public sector, too, cannot be fully relied upon. The solution, therefore, lies in public-private partnership, where the two can complement each other’s efforts in providing infrastructure services. It should be looked at as a means to enhance delivery capacity of the State and not a substitute for it.

Infrastructure development is basic requirement for economic growth and development. Several models have been attempted in India to develop infrastructure. During British rule, railway development was the priority of the Raj and various models-revenue sharing, BOOT were implemented by them. In the 1950s through the 1980s, the Plan process helped the public sector attain the commanding heights of infrastructure sector. But since the 1980s, the public sector’s role in developing infrastructure has diminished because of lack of its capacity to fund, develop and operate infrastructure projects.

2. The private sector is now looking at infrastructure as a profitable business proposition, and the capital market appears mature enough to finance such ventures. Thus, the private sector now coexists with the public sector in the field of infrastructure both subjecting themselves to the scrutiny of constitutionally appointed regulatory authorities.

3. Infrastructure has been defined as “comprising those basic services without which primary, secondary and tertiary productive activities cannot function.” It Includes non-tradeables such as a) transportation services – road, railways, ports and civil aviation, b) telecommunications, c) power, d) water supply, e) sanitation; and f) solid waste management. It does not include tradeables such as steel, cement, fertilisers and petroleum products, which are importable and, therefore, cannot be construed as physical constraints on economic growth.

Public-private partnership

4. Infrastructure financing is a challenge to both the private and public sectors. Given the externalities, high risks and low rates of return, such financing cannot be left solely to the private sector. At the same time, given the Budget constraints and inherent inefficiencies, the public sector, too, cannot be fully relied upon. The solution, therefore, lies in public-private partnership (PPP), where the two can complement each other’s efforts in providing infrastructure services. Here, social responsibility combines with the incentive system to improve infrastructure delivery. Investment and risk are divided between the two sectors depending upon each other’s financing and risk-bearing ability. Thus while State discharges roles of a planner regulator and facilitator, private sector acts as an financier, operator, and implementer.These two roles if dovetailed well, could lead to setting up of infrastructure projects very fast.

5. Normally, it is the public sector that initiates PPP, by providing the seed capital. A public limited company is then formed, by raising funds through the stock market. Though the government may reserve the right to appoint personnel in key positions, accountability to investors and consumers is enforced, as it is a public limited company. Specific functions of a PPP company, such as construction and maintenance of assets and providing infrastructure, are given to private companies. This arrangement is attractive to governments, as the investment gap is filled, investors and consumers are satisfied with the rate of return, and there is adequate supply of infrastructure.

6. The fundamental principle of PPP is that while the private sector is responsible for the design, financing, building and operation of the services, the government puts in place the legislative framework and provides institutional and political support. There are numerous variations of the partnership pattern depending on the risk allocation between the two sectors. The most common types of concessions are build-operate-transfer (BOT), build-operate-own-transfer (BOOT), build-own-lease-transfer (BOLT), design-build-finance-operate (DBFO) and free standing projects.

Preparedness for a good PPP

7. The PPP contract should specify, preferably in quantifiable terms, the outputs expected of the private partner. It would be beneficial to standardise contracts, indicating simple parameters with reference to risk- sharing, financing and pricing. Though the specifications of different projects vary, the use of standardised guidelines would help reduce the time and costs of negotiations. The production process should be such that the private sector has enough scope to innovate and, thereby, reduce the per unit cost of production. The payment mechanism should be objective, transparent and easy to operate. Infrastructure pricing is a complex process. Financial viability of the project, externalities, consumers’ ability to pay and subsidy targeting should be factored in.

8. One prerequisite for a successful PPP is the level of project development before inviting a private partner to join in.This requires to put in place a legal framework or guidelines -general or sector specific for PPP, regulatory structure, land identification and possession,statutory and non-statutory approvals, risk identification and allocation,preparation of DPR, draft of concession agreement,bid document, assessment of support for viability gap funding, marketing of project with possible vendors and awareness among lenders.These have to be outsourced to begin with and in due course a combination of in house and outsourcing could work well.

9. A detailed cost-benefit analysis of private sector involvement and public alternatives must be undertaken to ensure that PPP enhances public benefit. This can be achieved by developing a hypothetical ‘public sector comparator’, under which, the public sector is assumed to have created efficient infrastructure at the least cost and at minimum time. It is against this benchmark that PPP performance has to be judged.

Benefits of PPP

10. A PPP essentially aims at creating a structure in which better value-for-money can be achieved through involvement of the private sector without undermining the Government’s overall responsibility to the taxpayer for the quality of the service provided. Some of the key benefits are :

a. It allows public ownership of infrastructure as well as ensures adequate rate of return on investment for the private participants- higher productivity.

b. It ensures sustained availability of good quality service which has a multiplier effect on the economic development of the area-customer focus.

c. Since developer is responsible for maintaining the assets, the quality of assets gets optimized.

d. It leverages physical and financial resources of the State.

e. The developer tends to bring latest technology to minimize capital and revenue expenditure.

f. It leads to optimization of capital cost of the project-cost effectiveness.

g. The delivery of assets gets expedited-accelerated delivery.

How to implement PPP

11. To implement PPP,following steps need to be taken:

a. To make an entity responsible for it but it should not have conflict of interest with PPP approach

b. To identify one or two projects which could have demonstration effect and also help in learning

c. Association of a project development agency which could facilitate development of the project

d. Development of appropriate guidelines and policy decisions

The concerns

12. The bidding process is, perhaps, the most controversial aspect of a PPP. The government agency should prepare a detailed project report setting out standards for design, construction and O&M, procedure for price fixation, and distribution of risk and profit. This would help achieve objectivity and transparency in the bidding process. The user charges should be carefully designed and periodically reviewed. The Delhi-Noida toll bridge, for instance, became financially viable after much initial resistance on the part of users to pay for services, which have traditionally been considered as ‘free’.

13. PPPs in the road sector should design innovative procedures for toll collection so as to minimise time loss for the users. Also, partnerships in social sectors have to be based on a ‘bottoms-up’ approach where the local panchayats and municipalities have a larger say in project design and its operationalisation. Such an approach has been followed in the Tirupur water supply project and the Rogi Kalyan Samitis of Madhya Pradesh.

14. All successful PPPs suggest the need for effective communication with the stakeholders, that is, the community at large, the political establishment and the specific user group, both before and after commissioning of the project on all sensitive issues, including rehabilitation and resettlement. It must be remembered that political consensus, even if initially achieved, tends to be fragile and needs to be continuously strengthened. But the cornerstone for all successful PPPs is trust and mutual respect.

PPPs in India

15. There are quite a few PPP experiments on infrastructure. While many of them are successful, quite a few may need to be restructured. But an objective analysis of these projects would provide a vital input in deciding whether to extend the PPP approach to other infrastructure areas as well. Here are a few of such PPPs :

a. The Tamil Nadu Water Investment Company (TWIC), formed as a joint venture between the Tamil Nadu Government and IL&FS, set up the New Tirupur Area Development Corporation Ltd (NTADCL) as an SPV (special purpose vehicle) to implement the first private water supply in the country at Tirupur. The total project cost is more than Rs 1,000 crore, with the Government’s contribution of Rs 55 crore leveraged by almost 20 times. The project risks are apportioned to international level private agencies on the basis of core competencies.

b. In Vizag, rehabilitation of the 250-km canal and expansion of feeder canal capacity have been taken up. The Vizag project demonstrates the ability of the PPP framework to add value, by improving the efficiency of existing assets and expanding the range of services.

c. The Rogi Kalyan Samitis of Madhya Pradesh, set up with participation from donor citizens, elected people’s representatives, social organisations such as Rotary, Lions, and the Red Cross, district administration officials and doctors have helped to radically transform the services offered by government hospitals across the State. These samitis have the mandate to raise resources through user charges, donations, grants, loans and commercial exploitation of hospital land and other assets.

d. The Mumbai-Pune Expressway, a 95-km, six-lane concrete expressway costing $400 million was taken up on BOT basis.

e. The Tamil Nadu Road Development Company (TNRDC) was formed as a joint venture between the Tamil Nadu Industrial Development Corporation and IL&FS to develop the road sector. Accordingly, the East Coast Road was developed, wherein the Government’s contribution was leveraged by 12 times.

f. In 1997, the Jawaharlal Nehru Port Trust (JNPT) signed an agreement with P&O Australia for development of a two-berth container terminal on BOT basis for 30 years. P&O completed the project before schedule and commenced operations at the new terminal Nhava Sheva International Container Terminal (NSICT) in 1999.

16. Thus, the positives of PPPs for infrastructure development are particularly attractive to developing countries such as India, given the enormous financing requirements and equally large funding shortfall. However, PPPs should be regarded only as one amongst the range of alternatives for providing infrastructure facilities. Also, the PPP approach might be more successful in some sectors than others. The emphasis on PPP should also not preclude other options, including traditional public sector models.

(Acknowledgement to Business Line.)

(The Author is Chief Executive, ILFS, New Delhi )