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Priority in Infrastructure Projects

Letters

Priority in Infrastructure Projects

A
report in Daily News and Analysis (January 10) spoke about a project to start a ferry service between Borivali and Nariman Point in Mumbai. The news report painted an optimistic and rosy picture of the project and sounded as if the harassed suburban rail commuters would be changing over to this mode of travel. It, however, may not be so. It may turn out to be a project to serve the elite living in the posh colonies in or around the western seashore. The common man however is certain to bear the burden of this project without enjoying its benefits. The issue is of public importance and it would need to be debated especially when public funds are intended to be used. Environmental clearance has been given by the concerned ministry and it is expected that the project may start off this year itself. The project is being implemented by the Maharashtra State Road Transport Authority. The members of the consortium, which is led by a private shipping company, are IDFC, Dena Bank, Videocon International, Hiranandani Group, KSMC Financial Services, ABS Hovercraft, UK and Gammon.

In projects of this nature, it is only the participating institutions and decision-making government authorities who will have all the relevant facts and figures. The public can at best express its views, expectations and apprehensions of the project. It is therefore necessary that the authorities disclose all the relevant information to enable the public to know what the project will mean for them.

The financial cost of the project is not disclosed; nor are the terms of funding by the bank and the infrastructure development institution involved. The private parties cannot plead commercial secrecy when public funds are likely to be used. It may be recalled that a few years back, a hovercraft service operated between Vashi and the Gateway of India. That service was wound up because it was not found to be viable. We should also remember that a few years back a private sector entrepreneur started an airconditioned bus service on several routes in the city. It was started with all fanfare. Soon it ran into financial difficulties and the state had to take it over, adding to the BEST’s woes.

A few points about the proposed ferry service are raised here in the interest of an informed debate.

  • (i) What is the total cost of the project? (ii) What is the share of each of the members of the consortium? (iii) Is the state or any of its entities contributing financially to the project or are they parting with public assets for the use of the consortium? If so, the terms thereof?
  • (iv) Has the state government agreed to give any relief or subsidy for the project? (v) Have all risks been fairly estimated and who are going to bear them? (vi) Who will be the beneficiaries – the suburban rail passengers, the gentry who use private modes of transport to travel to the city, or the elite living in the fashionable villas in the colonies abutting the shore? (vii) Who is going to foot the bill to erect the infrastructure that will be needed to build jetties, boarding and alighting bays? Is sensitive public land being handed over to private parties? (viii) What about the transport infrastructure needed for bringing prospective passengers from points near their residences to the various boarding bays? Are the passengers to rely on private transport or public transport, such as the BEST? If the latter, have any coordination arrangements been formulated with the BEST? (ix) What is the estimated fare from Borivali to the various stations? Has the affordability point been satisfied by the project providers and the decision-makers? (x) Apart
  • (Continued on p 368)

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    Economic and Political Weekly January 28, 2006

    Letters

    (Continued from p 290)

    from their membership obligations of the consortium, are the IDFC and Dena Bank granting any loans to the shipping company that is heading the consortium? What are the specific roles, functions and obligations of the MSRTC and the consortium leader – a private party? Hopefully, Dena Bank would have ensured that it is not going to add more to its non-performing assets. It will be the duty of the authorities to enlighten the public on all the above aspects.

    Any new innovative infrastructure arrangement needs to be considered in all fairness and banks and infrastructure institutions should encourage such projects. But the viability of such projects is an important aspect and we cannot give any less importance to this merely because it is a private venture. When new instruments of public-private partnership are being propagated and taken up, it is the responsibility of the government to ensure that the terms of the public-private partnership are fair and reasonable and do not result in unduly large gains to one party and onerous responsibilities for the other. In fact, the success of public-private partnerships depends on the greater dissemination of relevant information on the terms and conditions of the various agreements. Otherwise, the good instrument of the public-private partnership is likely to be a new name for public assets being transferred to private profits.

    At any rate, the state government and its organisations that are implementing this project will need to provide the public with more relevant and meaningful details so that the people can rest assured that their monies are being put to profitable use and not frittered away in some illusory project that will not benefit the common person. It is hoped that the state will fulfil this public obligation.

    S SUBRAMANYAN

    Mumbai

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    Economic and Political Weekly January 28, 2006

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