The Center should concentrate its resources on the planning phase of large infrastructure projects; their implementation is the responsibility of private sector actors. Speaking to Business Standard, Kshitish Nadgauda, senior vice president and general manager-Asia, Louis Berger, said: “The government needs to be involved in the planning of dedicated freight corridors (and similar projects). Indeed, strategic plans must be developed by central government and planning agencies; they cannot be entrusted to any private entity. “
Louis Berger is a global infrastructure consulting company.
“There will have to be a national space strategy, which is first and foremost the economic plan against which the infrastructure plan must be developed. This can only be done by government agencies. When you start to explore the actual implementation, this is where the private sector could be involved, ”Nadgauda said.
This approach can be adopted for the Centre’s asset monetization campaign. In the 2021-2022 Union Budget Speech, Union Finance Minister Nirmala Sitharaman said: “The monetization of operating public infrastructure assets is a very important funding option for the construction of new infrastructure. “
Sitharaman said Indian Railways will monetize the assets of the dedicated freight corridors for operation and maintenance, after commissioning. The next batch of airports will be monetized for operation and management concession. It also listed highways, gas pipelines, rail infrastructure assets, among others, as part of a nationwide monetization pipeline.
“Infrastructure projects tend to be capital intensive. The costs are very high compared to the potential income that can be achieved. For example, for an underground metro project, the cost of tunneling is high. But in urban areas, this is really the preferred solution. While metro projects are carried out on elevated viaducts in many cities, it is primarily a cost driven situation, ”Nadgauda said.
“So, taking metro projects as an example, the government could step in and put in place civilian infrastructure. All the systems are working, the rolling stock can be built on a public-private partnership model. There is room for privatization, but the planning phase should be in the hands of the planning bodies, ”he added.
Commenting on implementation barriers when developing large infrastructure projects, Nadgauda said, “Land acquisition and availability is a problem, especially in urban areas. Innovative solutions must be found to optimize the required land area. Client agencies (usually government agencies or special purpose vehicles) have improved with experience. It’s a complex process, with the multiplicity of agencies and rules involved. “
“Today, in many National Highways Authority of India tenders, 90% of land acquisitions must be in place, otherwise it cannot award tenders for construction,” he said. he declared.
“If not all land, at least a high degree of certainty that the remaining 10 percent would be acquired over a period of about a year, from the start of the project. Otherwise, we run the risk of delaying projects, costs will accumulate because of requests for unused resources, ”he added.