New system will ensure concession provisions for PPP projects are enforced: Gajendra Haldea

Interview with Advisor to deputy chairman of Planning Commission

The government’s decision to introduce new guidelines for private partnership (PPP) projects has raised many eyebrows. However, in an interview, Gajendra Haldea, advisor to the deputy chairman of the Planning Commission, tells Aditi Phadnis the new norms aim to ensure users get the full benefits of the projects meant for them. Edited excerpts:

The Cabinet has cleared a set of guidelines to monitor public-private partnership (PPP) projects. How did this come about?
PPP projects are typically long-term concession agreements, which specify clear and distinct outputs such as quality of service and quantifiable performance standards that have a direct bearing on the users of such projects. These agreements normally empower the concessionaire to use public assets for building infrastructure projects. The concessionaire is also empowered to levy and collect user charges for the use of public assets. However, the government always remains responsible and accountable for delivery of services to the users. These projects, therefore, require close monitoring. The system that is being put in place will ensure provisions of the concession agreements and applicable laws are enforced with the ultimate aim of protecting the users from being short-changed.

How will it work?
The project authorities will create a two-tier mechanism for monitoring the performance of PPP projects. This will comprise projects monitoring unit, or PMU, at the project authority level and a performance review unit at the ministry or the state government level. These will generate monthly reports monitoring the PPP projects on the basis of a number of parameters, including assessment of performance against laid-down standards; levy and collection of user charges on the basis of approved principles; remedial measures and action plan for curing defaults especially when the performance standards are not met.

One of the Ps of the PPP—private—is really worried. They believe this is just a return of the ‘inspector raj’ through the back door and undermines the partnership element...
Not at all. There can be no return of ‘inspector raj’ because there are no inspectors, only reporting. On the other hand, those who believe they can get away without fulfilling their contractual obligations should be afraid—they should be very afraid. It is the government’s obligation to ensure users get the full benefits of the projects meant for them. No short-changing will be allowed. The government will take into account users’ concerns. But concessionaire will be protected by market forces: if they provide good service, the users will have no complaints. But if a concessionaire raises user charges, violating contractual obligations or cuts standards of service to make money, these guidelines will ensure he will be pulled up.