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Could we have a summary please?



> Utkarsh: I thought Pratap Raju (I hope I am 
> quoting the right
> name) had volunteered to summarize debate on 
> Infrastructure.

Sorry, I seem to have missed that one. 

My concern on infrastructure is that some folks whom I know on this list
to be experts on this topic are keeping a low profile. I respect
individual choice, but we are doing a joint work, aren't we? We have
discussed this before: please do not take this work lightly. If you have
the time, please spend a few minutes, think over the KEY reforms needed in
this sector, and put up your views. All views are welcome. Views expressed
lead to a brainstorming, a chain-reaction of ideas, and finally a 'better'
or best idea emerges.

People are getting impatient. Let me quote from an internal mail across
some friends.

"We do not have to wait for "experts" -- there are none.  Let us use are
minds, common sense and yes, where need be, scholarship.  But most of all
we require minds (and hearts) that believe that the goal to transform
India in the next decade can and must be accomplished."

Do you BELIEVE that these policies being designed here are worthwhile? Do
you BELIEVE that we can transform India? Then let us proceed. Else, this
train is not for you. This is above all, NOT a toy train.

I am paraphrasing C.K.Prahlad (from his address to the Strategic
Management Society, Amsterdam, 1988). "Successfully managing large,
diverse nations like India is like teaching elephants to dance. The
important this is that once they start dancing, everyone else has to leave
the floor." We are teaching India to dance. Only those who believe it is
possible, hang on. Others, dismount!

Back to infrastruture:
----------------------
This is what I had summarized on the web earlier:

"The role of government is critical in the provision of infrastructure,
whose benefits are reaped by all, and so, costs have to be borne by most.
Resource constraints can be partially met by involving the private sector
in the entire process of construction and maintenance. However, even where
such solutions are not feasible, government should not directly construct
and maintain any structure, but sub-contract these services to private
vendors."

Also:

i.Closing down all direct construction activities by government agencies,
either departments or public sector agencies. The Public Works departments
would purely sub-contract and monitor the work of private agencies, rather
than directly attempt any construction. There would be very few limits on
the potential size of private companies in the infrastructure sector, to
allow economies of scale, while promoting competition.

ii.Creation of additional capacity, sufficient to meet the highest
expected demand at the highest anticipated growth rates of the economy.

iii.User Pays Principle would operate in all cases. Nobody would be
subsidized indirectly. If any farmer or entrepreneur has to be
"subsidized," that would be done directly, through the Social Insurance
program.

More thoughts:
--------------

A) BOT:

A fellow civil servant from Pakistan had recently completed a MA thesis on
BOT financing of roads in which he studied USA, Malaysia and Mexico. I was
involved in many discussions with him on this method of finance, and I am
not quite sure or convinced if BOT is in any way superior to government
directly seeking tenders for such work from established private producers.

There is a massive role for government in infrastructure; only, the method
must be to contract out to parties through a VERY open and transparent
bidding and bid-evaluation mechanism.

B) Guarantees:

There has also perhaps been no discussion yet of the issue of providing
guarantees to foreign companies for building infrastruture projects such
as ports, airports, and power plants. In my view we should not provide any
guarantees - of any sort whatsoever. 

Now, if Pratap could please summarize all that has been said so far - we
could have a draft document which can be "objected" to.

Thanks!

SS




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