By Amar Yumnam
We have heard in recent news reports that the government of Manipur too has started taking interest in Public Private Partnerships (PPP or P3 as they are generally referred to ion public) by sending officials for training on that. In fact, it must be under the insistence of the Government of India and the creditable efforts in this direction in the southern States of this country. While the virtues of this approach are being appreciated from Australia to United Kingdom, we need to have a contextual understanding of the realities in Manipur. This is important for we do not wish to repeatedly fall in the world of Dostoyevsky who said: 'Much unhappiness has come into the world [read Manipur] because of bewilderment and things left unsaid.'
The Background:
Before we proceed, we need to have an understanding of the background of the concept and the empirics. PPP in both its older variant and the recent version is a European invention. The older version has its roots in France for more than six hundred years, while the newer version has its beginnings in the Private Finance Initiative launched by the Conservative Government of England in 1992. While the approach is traditionally applied to infrastructure development, its scope is getting expanded fast as in the case of police reforms in Kenya.
In the case of India too, the Deepak Parekh Report on Infrastructure Finance has estimated that the country would need an investment of $320 billion at 2005-06 prices during the Eleventh Plan period in order to enjoy a 9 per cent growth rate. The government simply does not have this much of a fund and it has started looking for private investors. It is in order to prepare the bureaucracy for this new orientation that the training programmes have been initiated; whether Manipur is a part of the national vision or not is a different question.
During the 1950s and 1960s it was considered that the government should undertake all economic activities and exercise control over those undertaken by the private sector. But this reliance on the purported benevolence of the government turned out to be a disaster. The efficiency, effectiveness, quality and equity of the services delivered were well below par on all counts. This experience had led to the other extreme swing to absolute privatization.
But privatization again erred in cases where monopoly profits were not realizable. The areas crucial for development and needing active investment were not attracting the attention of the private sector. Even more critically, the government had already incurred huge debts under the earlier dispensation of using public funds to hire contracts and create infrastructure. These empirics had led to the modern evolution of PPPs as a solution to address the problems.
The Virtues: PPPs, while still a contract, differentiate themselves from other market or Government solutions in very critical aspects. First, it gives the private sector an opportunity to participate in business it was debarred earlier. Secondly, it is a much detailed and transparent contract characterized by huge documentation. Thirdly, it avoids the short-termism of both government and private sector through a discipline of contracts where risks are allocated and sustainability is ensured through documentation. Fourth, efficiency, equity, effectiveness and quality are easier to attain and monitor.
Manipur's Case:
Given the realities of Manipur, I cannot visualize a scenario of Manipur wherein private capital would be forthcoming. But I would definitely emphasise on the need for improving the bureaucracy and governance of the State now to prepare for the forthcoming changes.
The success of PPP anywhere in the world necessitates a credible and accountable government in place. The primary need is to improve upon the existing quality of governance and establish its mettle to ensure security of property rights before the government ever entertains any idea of attracting private capital in her projects.
Even more significantly, the government of the State must look around and learn lessons. PPP can mean and wonderfully at that Private Private Partnership. The recent replacement of traditional smoke emitting kerosene lamps by low power consuming bright tube lights in the keithels of the capital is a wonderful example of this.
Now that the private sector has set an example worth emulating, it is now the turn of the Government to respond positively. PPP can also mean Public Public Partnership, and it is exactly what is needed in Manipur today. The recent news reported in the local media that another department of the State government is waiting for another turn of digging around in the roads in the State capital are worst case scenarios depicting the inefficiency and ineffectiveness of the governance in the State. The State government must first prove that it can establish Public Public Partnerships, and this is the only basis for a successful Public Private Partnership to emerge in the State.
Source: http://www.thesangaiexpress.com/Others/Citizens'%20Concerns.html
We have heard in recent news reports that the government of Manipur too has started taking interest in Public Private Partnerships (PPP or P3 as they are generally referred to ion public) by sending officials for training on that. In fact, it must be under the insistence of the Government of India and the creditable efforts in this direction in the southern States of this country. While the virtues of this approach are being appreciated from Australia to United Kingdom, we need to have a contextual understanding of the realities in Manipur. This is important for we do not wish to repeatedly fall in the world of Dostoyevsky who said: 'Much unhappiness has come into the world [read Manipur] because of bewilderment and things left unsaid.'
The Background:
Before we proceed, we need to have an understanding of the background of the concept and the empirics. PPP in both its older variant and the recent version is a European invention. The older version has its roots in France for more than six hundred years, while the newer version has its beginnings in the Private Finance Initiative launched by the Conservative Government of England in 1992. While the approach is traditionally applied to infrastructure development, its scope is getting expanded fast as in the case of police reforms in Kenya.
In the case of India too, the Deepak Parekh Report on Infrastructure Finance has estimated that the country would need an investment of $320 billion at 2005-06 prices during the Eleventh Plan period in order to enjoy a 9 per cent growth rate. The government simply does not have this much of a fund and it has started looking for private investors. It is in order to prepare the bureaucracy for this new orientation that the training programmes have been initiated; whether Manipur is a part of the national vision or not is a different question.
During the 1950s and 1960s it was considered that the government should undertake all economic activities and exercise control over those undertaken by the private sector. But this reliance on the purported benevolence of the government turned out to be a disaster. The efficiency, effectiveness, quality and equity of the services delivered were well below par on all counts. This experience had led to the other extreme swing to absolute privatization.
But privatization again erred in cases where monopoly profits were not realizable. The areas crucial for development and needing active investment were not attracting the attention of the private sector. Even more critically, the government had already incurred huge debts under the earlier dispensation of using public funds to hire contracts and create infrastructure. These empirics had led to the modern evolution of PPPs as a solution to address the problems.
The Virtues: PPPs, while still a contract, differentiate themselves from other market or Government solutions in very critical aspects. First, it gives the private sector an opportunity to participate in business it was debarred earlier. Secondly, it is a much detailed and transparent contract characterized by huge documentation. Thirdly, it avoids the short-termism of both government and private sector through a discipline of contracts where risks are allocated and sustainability is ensured through documentation. Fourth, efficiency, equity, effectiveness and quality are easier to attain and monitor.
Manipur's Case:
Given the realities of Manipur, I cannot visualize a scenario of Manipur wherein private capital would be forthcoming. But I would definitely emphasise on the need for improving the bureaucracy and governance of the State now to prepare for the forthcoming changes.
The success of PPP anywhere in the world necessitates a credible and accountable government in place. The primary need is to improve upon the existing quality of governance and establish its mettle to ensure security of property rights before the government ever entertains any idea of attracting private capital in her projects.
Even more significantly, the government of the State must look around and learn lessons. PPP can mean and wonderfully at that Private Private Partnership. The recent replacement of traditional smoke emitting kerosene lamps by low power consuming bright tube lights in the keithels of the capital is a wonderful example of this.
Now that the private sector has set an example worth emulating, it is now the turn of the Government to respond positively. PPP can also mean Public Public Partnership, and it is exactly what is needed in Manipur today. The recent news reported in the local media that another department of the State government is waiting for another turn of digging around in the roads in the State capital are worst case scenarios depicting the inefficiency and ineffectiveness of the governance in the State. The State government must first prove that it can establish Public Public Partnerships, and this is the only basis for a successful Public Private Partnership to emerge in the State.
Source: http://www.thesangaiexpress.com/Others/Citizens'%20Concerns.html
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