The role of public private participation in accelerating development of infrastructure in Karnataka

Most of the states in our country have financial constraints. As a result limited infrastructure development project are taken up by the states and many of these projects get delayed. Public Private Partnership (PPP) is a unique venture which involves a contract between public sector authorities and a private party. The contract involves substantial financial, technical or operational risks which are taken care of by the private party and in return it provides a public service or project to the public sector. The degree of risk may vary from project to project.

Philosophy of PPP Model:

PPP model is a viable alternative to accelerate the development of infrastructure in a state and it is not synonymous with outsourcing with retention of operational risks by the public partner. Nor it should be taken as an exercise of donation from a private party or borrowing by the state. It has to be seen as a partnership with a balanced risk bearing by both the parties with allocation of responsibilities to a party best positioned to control that activity and get desired results.

PPP initiative in Karnataka State:

With the above objective in view Karnataka state established the Infrastructure Development Department (IDD) in 1996. The primary focus of this Department is to develop air, rail and maritime connectivity by attracting private investment using PPP model. The PPP Cell set up under this Department is instrumental in helping various state Departments and Agencies in formulating different developmental projects and guiding at different stages of the Projects undertaken by them. The Department endeavours to achieve a balanced partnership by sharing risks and joint financing between private operators and public authorities.

Resources:

Initially the Department showed limited progress with low budgetary provisions but has increasingly performed well with the enhanced budgets in subsequent years. In the year 2003-04 the budgetary provision was only 178.00 crores which jumped to 689.30 by the year 2010-11. During the current financial year (2011-12) the allocation is 897 crores.

State Policy

The Government of Karnataka has developed an Infrastructure Development Policy in 2007 and has decided to encourage PPP in the following sectors of infrastructure considered to be important for growth. These sectors are as follows:

1. Education
2. Energy
3. Agriculture
4. Irrigation
5. Healthcare
6. Transport and Logistics
7. Urban and Municipal
8. Industry
9. Public Markets

Depending upon the nature of the infrastructure the Government has also permitted to adopt different approaches like build-and-transfer, build-lease-and-transfer or build-own-and-transfer or any other.

PPP Projects Undertaken:

1. Railway projects like Sholapur - Gadag (GC), Shimoga - Talaguppa Gauge Conversion, Kottur- Harihar New Railway Line, Bangalore – Ramangaram - Mysore Railway Doubling, Bidar - Gilbarga New Railway Line and Munirabad - Mehboobnagar New Railway Line in partner ship with Ministry of Railways. These 6 projects have been undertaken at the cost of Rs. 2029 crores.

2. Gas Pipeline Project in collaboration with GAIL

3. Expansion of AAI-run Airports in Mangalore, Mysore, Belgaum and Hubli.

4. Airports at Bellary, Bidar, Bijapur, Gulbarga, Hassan, Karwar, Shimoga.

5. Airstrips at Bagalkot, Chikmagalur, Davangere, Gadag, Gokarna, Haveri, Kollegala, Kushalnagar, Raichur, Udupi.

In addition to the above mentioned projects the State has proposed 9 more Projects with the Railways on cost sharing basis.

Important Contact Nos.

Secretary,
Infrastructure Development Department
Roo No. 28, Vikasa Soudha
Bangalore – 560001
Ph. 080-22282366 or 080-22035085
E-mail: prs-infra@karnataka.gov.in

Director
Infrastructure Development Department
Roo No. 08, Vikasa Soudha
Bangalore – 560001
Ph. 080-22034070
E-mail: dir-id@karnataka.gov.in

Conclusion:

PPP model of infrastructure is a great necessity for ensuring early development in the county. Karnataka State has proved it by undertaking a number of infrastructure development projects using PPP model. The overall growth of states can get a momentum by using this model.