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Infrastructure's biggest enemy? The government

Last updated on: June 8, 2012 15:59 IST

Infrastructure's biggest enemy? The government

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Vinayak Chatterjee

Ask any infrastructure developer and he will tell you that the biggest risk factor is the government itself.

The "sovereign" does not inspire confidence when, paradoxically, in financial markets, sovereign debt and sovereign guarantees are supposedly the safest you can get.

Infrastructure developers will also tell you that the situation is akin to being invited to dinner as a valued guest; and as soon as you arrive at your host's gate, you get roughed up, beaten and sometimes even killed by the guards on duty.

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Image: A passenger train coming from Udhampur moves over a bridge in Bazalata on the outskirts of Jammu.
Photographs: Mukesh Gupta/Reuters.
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Infrastructure's biggest enemy? The government

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The private sector, lest we forget, is "invited" to "bid" for public utilities by the sovereign. Private capital is "welcomed".

Half of the nation's trillion-dollar infra development is to be done by valued and esteemed private sector "invitees".

So, Kafkaesquely, while one arm of the sovereign invites and welcomes, 65 other arms – security men who guard the host's gates – rough up the invitee.

The enemy is within!

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Image: Infra picture.


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Infrastructure's biggest enemy? The government

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Why private enterprises should be beaten and bruised in the process of clearing sovereign obstacles is the biggest riddle of our times.

Well, the time has come to force the sovereign to clear obstacles it has itself placed on the path to speedy implementation.

The private sector, with one voice, should say clearing sovereign obstacles is not its core competence. And that the sovereign cannot abdicate its responsibility of clearing the minefield.

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Image: Bandra-Worli Sea Link.
Photographs: Mukesh Gupta/Reuters.
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Here are three ways to bite the bullet.

One, infrastructure ministry: This column had set out 10 "good" reasons to have one ("From policy paralysis to action station," April 16).

One of the principal reasons was to have a nodal body for securing all "sovereign permissions" in a purposive, time-bound and facilitative manner.

The column even suggested that the current statistics and programme implementation ministry could well be re-fashioned into a new-age infra ministry, and statistics could be handed over to the Planning Commission.

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Image: New Delhi.
Photographs: Reuters.

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Two, sovereign-incubated special purpose vehicle (SPV): Over and above the infra ministry, one of the finest moves possible is to have sponsoring sarkari authorities first set up 100 per cent sarkari-owned SPVs to implement a project.

In its sarkari avatar, this SPV should secure all permissions and clearances. Then, it should bid out the SPV to the highest bidder.

In mid-May, the Prime Minister's Office woke up to the immense practical possibilities of this move when it circulated a note suggesting this to all economic ministries. This should be done right away.

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Image: An overcrowded train.
Photographs: Reuters.
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Infrastructure's biggest enemy? The government

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Three, penalties on sponsoring authorities: In future, let all infra public-private-partnership (PPP) bids carry a special annexure listing 100 per cent of the permissions required, clearly delineating the responsibilities of the sovereign sponsoring authority.

The bid legalese must impose severe penalties for delays on the sponsoring authority if it fails to keep its side of the bargain and does not act and behave as a responsible PPP partner.

Get babudom and its political leadership to be publicly and monetarily accountable. Otherwise, let them not merely bid out PPP projects as bemused observers.


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Image: A boy works in a brick factory.
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The prime ministerial announcement of June 1, 2012, of "an investment-tracking mechanism to expedite the implementation of big ticket projects" did not lead to any surge of adrenalin.

In fact, it was seen to be nothing more than navel-gazing and a knee-jerk PR effort immediately after the announcement of disastrous GDP numbers.

The infra meeting of the PM on June 6 saw the delivery of homilies and platitudes and a laundry-list of new projects, producing nothing more than a yawn.

It's time to get real. Gentlemen, let's go for real solutions.

 The author is chairman of Feedback Infrastructure.


Image: Prime Minister Manmohan Singh.
Photographs: Reuters.

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