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Lessons Kamal Nath should take

Last updated on: July 8, 2010 14:54 IST

Lessons Kamal Nath should take

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Business Standard

Road Transport and Highways Minister Kamal Nath's outburst against the Planning Commission (read Deputy Chairman Montek Singh Ahluwalia's  adviser Gajendra Haldea) at a function on public-private partnership (PPP) has to rank among the most bizarre episodes of two arms of the government fighting in public.

While describing the Planning Commission as essentially an "armchair adviser", Mr Nath said people in the GMR consortium who'd just unveiled the new airport terminal in the Capital had told him they'd built it despite the Planning Commission.

The example was a bad one since, in the case of the airport terminal, the Planning Commission's interventions were valid, given flaws in the initial bids that were subsequently corrected.

The Planning Commission, similarly, has played an important role in various other ways in the infrastructure sector.

Allowing "open access", whereby users of electricity are free to choose their suppliers instead of being tied to one monopolistic supplier, for instance, is an idea that emanated from the Planning Commission and is being pushed by it.

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Image: Kamal Nath.
Photographs: Reuters
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The credit for bidding out metro rail projects, as opposed to the nominated-provider Delhi  Metro model, similarly, has to go to the Planning Commission.

Ditto for the change in policy on ports. Thanks to a distortion in policy, there were cases where the regulators were allowing port operators to add into their costs the revenue share fees they were giving to the government - a sure-fire recipe for disaster since this would just drive up tariffs.

It was the Planning Commission which fought a battle to ensure new railway engine/coach facilities would be competitively bid for - ultimately it lost as the Railways decided to scrap the tender.

There are a host of such examples, but the idea is not to defend either Mr Ahluwalia or Mr Haldea. The point is that if line ministries like Mr Nath's are indeed convinced they're right, they need to convince the Cabinet and/or the prime minister of it - merely letting off on the Planning Commission serves no purpose.

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Image: Delhi Metro.

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The Planning Commission has talked of "subprime highways" and has said that the current system of tendering/supervision has huge flaws and that the further relaxations proposed in the norms will worsen matters.

If Mr Nath wants to counter this, he needs to show he has an adequate awarding/supervisory mechanism in place - the fact that two senior officials of the NHAI have recently been found with crores in their offices and are now in judicial custody, however, makes this task a bit difficult.

In this particular case, a top-class infrastructure firm like L&T found itself getting disqualified for a road project.

Developing more roads and airports are an important part of India's  growth strategy, but it cannot be anyone's case that there can be no checks on the costs of such developments.

In any case, armchair critics have their uses, especially when line ministries sometimes cut corners in their hurry to get things done. Surely, Mr Nath would appreciate that.



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