Monday, March 17, 2014

Keep the model but check problems in PPPs: Montek

He has written to ministries seeking across-the-board changes from award to monitoring of projects, while asking govt agencies to check malfeasance

NEW DELHI: Planning Commission Deputy Chairman Montek Singh Ahluwalia, seen as the strongest proponent of public private partnership (PPP) projects, has admitted to "problems" but ruled out scrapping the model . Instead, he has started discussions on how the mechanism can be made to work better amid strong public criticism, which he acknowledges can be "legitimate".
 
Mr. Ahluwalia has written to ministries seeking across-the-board changes from award to monitoring of projects, while listing out several projects where developers have gained. From the consumer point of view, the biggest change is to be ushered in on the monitoring side as the plan panel has finally recognised that developers of roads and airports and those setting up power plants often fall short of service standards.
 
"In most cases the user charges are levied and recovered by force of law and since payment thereof is involuntary, users expect the government to ensure the promised level of service... Since the concessionaire is primarily guided by profit motive, he may try to save his costs and expense by cutting corners and shortchanging the users," a note circulated by Mr. Ahuluwalia said, while asking government agencies to step up monitoring to avoid charges of collusion. The document said while malfeasance in traditional contracts can be detected fairly early, it could take long to surface in PPP projects, but the consequences are far more significant.
 
Source & Credit: Dipak Kumar Dash, The Times of India

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