In several economic infrastructure sectors, India enjoyed a strong track record of harnessing Public-Private Partnerships (PPPs). Private sector investments in infrastructure more than tripled from the 10th Plan Period (2002-07; INR 2 trillion) to the 11th Plan (2007-12; INR 7.3 trillion). Between these plan periods, private sector share in infra investments increased from 22% to 38%. For a considerable period of time, on the score of mobilizing infrastructure investments through private participation among developing countries, India ranked 1st in Energy and Transport sectors and 2nd in Telecom (behind Brazil).
This erstwhile success of India’s PPP program is attributable to well-crafted reform efforts by the government, and ably executed by the private sector, banks and other financial intermediaries. Following the economic liberalization initiated in the early 1990s, the government has created an enabling environment for private participation through several sector-specific and cross-sectoral initiatives, e.g., relaxing entry norms, tax concessions, independent regulation in telecom and power, mobilization of additional revenues through tolls and cess on fuel, establishment of a viability gap fund mechanism and India Infrastructure Financing Company Limited, etc. The financial intermediaries, too, quickly moved up on a steep learning curve to cater to this new and challenging mode of delivering infrastructure services. Private sector responded enthusiastically and seized these opportunities to develop their own capabilities and progressively build larger and complex projects. Today, private sector operators are serving more than 90% of the mobile phone users, owning ~40% of the power generation capacity, built and operating a substantive portion of arterial network of national highways, besides world-class airports in four metros and container handling facilities at many ports.
On the streets of Shimla, residents stare at a strange group of visitors. The group looks and acts different from other tourists to this hilly capital of India’s mountain state of Himachal Pradesh.
Not Indian, and definitely not the usual European retirees. Oh, and even stranger, the group starts taking photos of parking lots, trash cans, and the tiny alleys that snake up and down the city.
That was how a group of global experts in a gamut of urban matters appeared to the citizens of Shimla. It was the group’s first day in a town they had never seen, nor ever imagined they would visit.
But here they were - experts at solid waste management, urban parking, public transportation, IT and city planning - at the request of the government of Himachal Pradesh (HP). HP is renowned for its pleasant climes, verdant forests and snow-clad peaks that not only act as a carbon sink for India’s burgeoning economy but also serve as a source of five perennial rivers that sustain the lives of million in the teeming plains below.
The inspiration for the experts’ visit came from the highest levels of the state government. Dr. Shrikant Baldi, the state’s additional chief secretary, had visited Korea to attend a global green growth conference sponsored by the World Bank. There he saw the real-life application of strategies that his government needed to take their own green growth agenda forward.
A few weeks ago, I travelled to Gujarat to attend the project launch workshop for the second Gujarat State Highway Project (GSHP-II). It is a return visit to Gujarat after my last visit in 2008. I was the task team leader for the first Gujarat State Highway Project (GSHP) during 2005-2008, so I knew the state quite well and I expected to see a lot of changes during this new visit. But when I got there, I was still surprised.
Our team first went on a site visit first. We passed one road section which was improved in 2006 under the GSHP. The road will looked new. My colleague Arnab Bandyopadhyay, who is the Project Leader for GSHP-II, asked the engineers from the Roads and Buildings Department (R&BD) whether they have rehabilitated the road recently. The answer was no. “You must be kidding,” I said to them. “How can an 8-year old road still look so new?” But they were very firm. “No. We have not done any new works on those GSHP roads since they were constructed.”
In the dry, rugged landscape of Rajasthan, children faced a hot and dusty trek to school, families had a hard time reaching medical help, and farmers, most of whom rely on dairy farming for their livelihood, found it difficult to take their milk to market.
With the coming of the road, farmers earnings have increased, children can get a ride to school, and medical help is reachable more quickly. With the commute to town now being easier, city jobs are within reach, and families are receiving better marriage proposals for their sons and daughters.
What does one generally looks for while travelling? Quick, hassle free, safe and convenient mode of transportation! To get people to shift from private to public transport, the usability and access to public transport should be such that people choose it over their own vehicles.
This is however a classic chicken and egg problem because until the public sees an improvement in public transport they are not going to use it, and till the government sees people using it, it will not invest in public transport. In this case, the government will have to take the first bold steps and invest in the infrastructure of public transportation systems.
Points to be considered:
Saleha Begum was determined. Over the last couple of years, a number of children in her village had tragically died, their families left behind shocked and shattered. Memories were all that remained of these young lives cut short, and Begum was now determined to do her bit to stop the untimely deaths and accidents caused by the proximity of a highway to a community school.
We had arrived at Baishakanda Union Parishad in Dhamrai just before the local community meeting started. (Union Parishads are the lowest tier of local government in Bangladesh.) Begum had already taken her place among men and women from her village. A number of women threw anxious looks toward her. That day, Begum was going to play a vital role in advancing their agenda.
|More congestion follows more roads. Photo Copyright of The Daily Star|
Basic transport economics teaches us that changes in roadway supply have an effect on the change in traffic congestion. Additional roadways reduce the amount of time it takes travelers to make trips during congested periods. As urban areas come closer to matching capacity growth and travel growth, the travel time increase is smaller. In theory, if additional roads are the only solution used to address mobility concerns, growth in facilities has to be slightly greater than travel growth in order to maintain constant travel times.
Adding roadway at about the same rate as traffic growth will only slow the growth of congestion. But all these assume “other things equal”. No, I am not referring to “induced demand” that could potentially make the cure (road) worse than the disease (congestion). I am referring to the competence, or lack thereof, of those who design, build, and operate the facilities in the public sector.
The presidential election in Sri Lanka this January resulted in an easy win for the incumbent Mahinda Rajapakse. The end of the long lasting civil conflict with Tamil separatists, strong remittances and an IMF agreement boosted investors’ confidence. Foreign exchange reserves recovered from about one month of imports in the first half of 2009 to six months of imports by January 2010.
Now that the war is over and the global economy recovering, the government needs to grasp the opportunity to do the right things and avoid hurting confidence in the country’s stability, which is key to the rise in foreign investment and tourism.
The bad news is that the withdrawal of GSP Plus by the European Union countries can hurt industrial exports. The EU decision is worrisome. Thanks to the increase in manufacture exports from 6 percent of total exports in 1975 to 60 percent in 2005, firms began to lead Sri Lanka‘s connectivity with the rest of the world.