The PPP route for funding infrastructure projects is the smart choice to bridge the country?s gaping infrastructure deficit. But there?s a huge debate on the ownership of, and the accountability for, the assets created by combining public and private resources.
The Planning Commission, the finance ministry and administrative ministries often argue that, though built by a private company, a bridge or a road is still a public asset. The private player, which puts in money, time and resources, staunchly calls the asset its own?at least for the concession period.
In the last few years many JVs have been formed between government departments and private players to carry out PPP projects that are curiously called Private Ltd Companies. Other confusing cases are those like the DMRC?a 50:50 JV between the Centre and the Delhi government. The highly efficient corporation, however, refuses to be pinned down as an agency of either the state government or the Centre.
Worried by this trend and in order to bring accountability to such projects, the finance ministry had said no JVs with equal stakes of a private firm and a government company would be allowed in the infrastructure sector. These guidelines may help avoid confusion about who?s in charge. The accounting frauds at Satyam and Maytas, which eventually derailed the Rs 12,500-crore Hyderabad Metro Rail project, posed a bigger crisis?how does the government ensure that discrepancies by a private player do not hijack the creation of public assets?
It?s in this context that the Comptroller & Auditor General (CAG) decided to bring PPP projects in the infra sector into its purview. From now on, it will have the authority to check the account books of not only the SPVs and JVs formed with public and private capital, but also those of the private players. The idea is to check up on the private partner and ensure that it is not taking other stakeholders for a ride.
With billions more to be invested through the PPP route in areas as diverse as infra, health and education, the CAG?s audit norms will hopefully bring the much-needed order and accountability.
surabhi.prasad@expressindia.com