PPP is used to to get more efficient delivery systems from private sector. private sector is supposed to bring not only financial resources to the partnership but also technical and managerial expertise.
This news item in Hindu shows as to how BIAL has not lived upto expectations. Good to see that some monitoring is happening in these projects. More user feedback chanels should be opened by government to ensure that all PPP projects are forced to meet service level agreements stipulated in contracts.
Indian private sector needs to change its mentality of short changing government if they would like to participate in long term PPPs.
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Source : http://www.hindu.com/2009/12/22/stories/2009122257720100.htm
Bangalore: A joint House committee of the Karnataka State Legislature has recommended blacklisting L&T, Siemens and Unique Zurich Airport for a minimum period of five years citing “poor quality of workmanship” in the construction of Bengaluru International Airport (BIA), and “appropriate action” against those involved in important decisions on the project, including Infosys Chief Mentor N.R. Narayana Murthy and Rajeev Chandrashekar, MP.
The committee found serious lapses in drafting the Concession Agreement to construct the greenfield airport on a public-private partnership (PPP) model, which was heavily loaded to benefit the private participants.
BJP MLA D. Hemachandra Sagar, who headed the 21-member (15 MLAs and six MLCs) Joint Legislature Committee (JLC), tabled the report on “Examination of Construction of BIA” in the Legislative Assembly on Monday.
The 124-page report said: “Considering the poor quality of workmanship executed, the trading of shares for profit without showing an iota of concern for the general public, the arrangement of entrustment of all airport works among the private players in BIAL and total apathy towards the needs of the users, the partners in the project, viz. L&T, Siemens and Zurich should not be considered for entrustment of any work by both the governments or their agencies for a minimum period of five years.”
The panel said that in October this year, one of the promoters, Unique (Flughafen Zurich AG) Zurich Airport, Switzerland, made a profit by off-loading 12 per cent (Rs. 46.15 crore) of its 17 per cent (Rs. 65.38 crore) stake at whopping value of Rs. 484.60 crore. “The private promoter walked away with an over 1,050 per cent return in just four years. This indicates that the private players have set their eyes on huge multiplication of their investment and have cut many corners for the sake of short-term profit.”
The panel gave a list of officers involved in important decisions for initiating “appropriate action” and it included Mr. Narayana Murthy, who was chairman of BIAL till 2005; Rajiv Chandrasekhar, Chairman and CEO, BPL Innovations Business Group; K. Siddappa, former Vice-Chancellor of Bangalore University; B.K. Das, former Chief Secretary; and K. Jairaj, who was MD, BIAL, and is now Principal Secretary, Energy Department. It said the Centre should withdraw the order permitting BIAL to impose a user development fee of Rs. 260 on passengers as BIAL had failed to provide adequate facilities of international standard to the users.
The Union and State governments should not consider the release of any amount to BIAL, until the recommendations of the committee are met and the amount of Rs. 100.26 crore following reduction of project cost, is refunded by BIAL.
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