India fast learning to build infrastructure

Indians are traveling all over the world with a vengeance. We are fascinated by the speed with which awesome infrastructure is being created by some of the countries like China, or for that matter, even smaller countries such as Thailand and Malaysia. We land in India and wonder when our infrastructure will match this. We then start getting real, and scale down our expectations to say that even if we can fix the potholed roads, we would have achieved quite a lot.

Slowly but surely things are happening. After the first expressway connecting Mumbai and Pune each state is aspiring to develop expressways. Hyderabad and Bangalore airports are surely examples of world class infrastructure. So are some of the highway projects developed by the National Highway Authority. But these are exceptions. People in all our metropolitan cities face chronic traffic congestion. Public transport system, where it even exists, is bursting at its seams. The Mumbai local train commute could make sardines feel luxurious in their cans.

Even urban areas face eight to 10 hours of power shortages. Most cities do not have adequate drainage and sewage systems. Parts of cities like Mumbai are blessed thanks to investments mad several decades ago. In most parts of India, it can be safety said that there exists a complete lack of infrastructure. Where did we go wrong?

There was never a great deal of emphasis on infrastructure. Successive five year plans laid emphasis on agriculture (hence irrigation), industry and poverty eradication. Rail, roads, power, ports, and airports that form a part of infrastructure vital for economic development did not receive adequate attention.

Secondly, most of these infrastructure segments remained within the purview of the central government. States were unable to exert enough pressure to accelerate the pace of their infrastructure development. Thirdly, infrastructure was considered to be the exclusive responsibility of the pubic sector. Significantly, our recent examples of world class infrastructure are through examples of world participation.

Over the last decade, one has been government laying greater emphasis on public private partnerships (PPPs). One only hopes that it doesn’t result in the Government abandoning its responsibility in creating infrastructure. Unfortunately, most often, PPPs are being adopted for the wrong reasons. Private sector should be brought in for its efficiency in delivery of infrastructure projects and not as a means of augmenting financial resources alone.

It is also believed that the private sector can manage the regulatory process better than the public sector. This is giving rise to a strange phenomenon, where private sectors ability is not necessarily determined through its financial and technical capabilities, but by its ability to effectively manage the external processes. India is thus losing out on an opportunity of catching up with the rest of the world in developing its infrastructure through the participation of some of the best technical resources available around the globe.

Infrastructure can be conceived into four broad categories viz basic infrastructure economic infrastructure, strategic infrastructure and dynamic infrastructure. Basic roads, drinking water supply sanitation, households electricity health and education, can be provided by local governments, especially where private capital is unlikely to find its way. Strategic infrastructure could be from a long term perspective. Examples of this could be development of, say bored road or preservation of environmental infrastructure. Economic infrastructure would be essentially the one connecting production and consumption centers. The private sector could b assigned the responsibility of developing economic infrastructure with government laying down fair and transparent rules of the game.

The second key benefit would be the entry of come of the best technical firms. Some of them have already targeted testing waters in India. However, most of these firms are shy of making investments and would rather function as EPC contractors. The third Benefit would be technology transfer. India has already lost out a great deal in this regard. While Mumbai grapples with the doubts associated with technical feasibility of developing an underground metro system, it hard to imagine that the London underground metro was built more than a hundred years ago. To catch up with the world Indian afford to wait for indigenous technology to evolve. It should build on the know-how already available around the world. Everyone knows, Indians are great at it.