Govt should exit from infra, hand over schools, jails to pvt sector: NITI Aayog CEO
“The government is not good at operation and maintenance,” NITI Aayog CEO Amitabh Kant said.india Updated: Jul 26, 2017 23:44 IST
The government needs to exit infrastructure projects and even look at handing over jails, schools and colleges to the private sector as happens to be the case in countries like Canada and Australia, NITI Aayog CEO Amitabh Kant said on Wednesday.
At the same time, he was highly critical of India’s private sector, terming it as “most irrational” and “insensitive”.
Kant said it messed up projects by aggressive bidding and creating current crisis in the public private partnership (PPP) model.
“The government has done a lot of big projects but the government is not good at operation and maintenance. Therefore, the government must start the process of reverse BOT (build, operate and transfer), must sell out projects and let the private sector handle it,” he said addressing India PPP Summit 2017, organised here by industry body Ficci.
Citing the example of dirty bathrooms at airports, which fall under the Airport Authority of India, he said: “We must bring in the private sector. That is, the fastest way to bring in private sector and bring private sector money back in infrastructure. These projects are fully de-risked.”
He added: “The country needs to move into new areas of PPP. There is no need where jails, schools, colleges should be run in government sector. At least experience of many countries like Canada and Australia shows that private sector is capable of doing very good work in creation of quality infrastructure over a long period of time in social sector.”
Kant also said that there were huge opportunities for the private sector in India like station re-development projects, Port construction and Sagarmala projects.
There is no shortage of money in the market and India can use the opportunity by de listing its projects, he said.
“Need of the hour is to market these projects well,” he said, adding that even the freight corridor being built should be privatised.
“The dedicated freight corridor build by railways can reduce journey of 14 days to 14 hours which is a paradigm shift that India is looking for,” Kant said.
Blaming the private sector for the current crisis in PPP investment in India, he said there are hundreds of examples where private sector has gone for aggressive bidding and didnt bother to do due-diligence as a result of which the PPP mode has got a setback.
“Private sector has performed very badly... Private sector in India is most irrational, insensitive I have seen,” Kant said citing the example of aggressive bidding in highways and coal sectors.
He said it is high time that the private sector understood that in the long run it causes pain to itself and it causes pain to Indian economy and that the bidding should be made at a rational basis.
Citing the example of Delhi-Jaipur expressway he said it is time that the private sector should do rational bidding and execute projects in a time bound manner.
Kant also stressed the need of restructuring the model concession agreement (MCA) so that the private sector gets more incentives and is encouraged for investments.