Private sector participation in roads development: Planning and management issues

[Abstract not available: Extracted from Introduction] Indian road sector has seen overt divergence from its traditional public sector produced delivery system. The National Highways being. commercially most important roads, Government recognizes that development of this segment of road cannot wait for adequacy of budgetary allocations. The Government has set up dedicated autonomous implementing agency with dedicated source of funds to carry out historical scale of development of National Highways in India. To carry out the mammoth scale of development of National Highways, Government has resorted to outsourcing of designing, supervising and quality related activities for speedy execution of projects with international standards. The most significant aspect is it has handed over many stretches of National Highways to private sector to build and then operate for decided period where private investors are allowed to recover investments through directly tolling the road users. The modality of private sector participation to this extent is termed as Public Private Partnership (PPP) and it has become major currency for Indian policy makers like worldwide counterparts. Knowing the paucity of public funds, it is inevitably envisaged by Indian Government to attempt the route of PPP for development of National Highways on very large scale in the Eleventh Five Year Plan Period (2007-2012). The PPP route is also going to be major way of developing important State Highways. But roads being perceived as public goods, development and operations of road facility using private investments ripple many issues at planning (at project formulation level) and management (at project operation level) stages. These are issues mainly related to commercial viability of investment and public acceptance of such projects. The overall objective of this study is to bring out planning and management issues to promote sustainable Private Sector Participation (PSP) in roads development and understand factors affecting willingness to pay (or not to pay) for using the roads. Precisely the objectives are: i) To inquire into the status of prevalent practices with reference to road facility creation and financing of the same through international experience. ii) To inquire into the prevalent views with reference to control of road facility as a public good and methods of ownership, transfer of ownership, viability of projects with the help of literature review. iii) To understand the status of road development in India, the urgent need for road development, the causes for private sector participation and regulatory development for the same. iv) To identify present level of PSP (Private sector participation) and scope for the same in roads development. v) To identify issues related to PSP at project formulation level and management level based upon case studies. vi) To inquire into ‘Willingness To Pay’ for use of road facility. vii) To find out measures to promote sustainable PSP in roads development and to understand factors affecting willingness to pay for using the roads.