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With DND, he paved the way for smooth public-pvt partnerships

With DND, he paved the way for smooth public-pvt partnerships
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First Published: Wed, Aug 22 2007. 07 16 PM IST
Updated: Wed, Aug 22 2007. 07 16 PM IST
In 1997, Pradeep Puri entered the Uttar Pradesh law secretary’s office and asked for the impossible: He wanted the right to sue the government.
The chief executive of the Noida Toll Bridge Co. Ltd had been tasked with building the DND (Delhi-Noida-Delhi) Flyway, an eight-lane highway that would link Delhi and Noida and decrease travel time between the metropolis and its growing suburb.
Back then, though, the project was little more than dozens of pages in a memorandum of understanding approved five years earlier. To get it going, Puri quit his job in the Indian Administrative Service to join the other side of one of the nation’s first major public-private partnership in roads.
His first hurdle was to convince the government to waive its right to “sovereign immunity,” which protected states from prosecution if they reneged on contracts. The little-known clause ensured the public and private sectors operated largely independent of each other.
“Do you realize what you are asking me—and us—to do?” the law secretary said, according to Puri.
All Puri realized was that the waiver was necessary for his project’s completion. And his successful meeting in Lucknow set a precedent and paved the way for builders to embark on joint ventures with the Indian government—a model that has been duplicated by various other consortiums to build, operate and maintain stretches of India’s 66,000km national highway network.
“I wouldn’t call the Noida Toll Bridge Co. a blueprint,” a modest Puri says. “Yes, we did face a few problems… a few roadblocks.”
Even after his landmark meeting in UP, it took 18 months for the government to sign a concession agreement which would allow the actual roadwork to begin. The irrigation department filed cases against the Noida toll company over land acquisition problems. “It was a fairly painful period,” says Puri about his first years at the helm. “A lot of us had invested time and money into this project but a lot of people did not want it to go through.”
While the upper levels of government seemed receptive to new ways, Puri said officials at the middle and lower levels opposed the private sector entering what had been hitherto their fiefdom.
Yet the project inched along.
“The thing that you notice about Pradeep is the way he does not miss the forest for the trees,” said close friend Pradeep Sachdeva of Pradeep Sachdeva Design Associates, an urban planning firm. “He always keeps the big picture in mind.”
Pradeep Puri hails from a family of civil servants—and became the first in the family to venture into the private sector. His father retired in 1980 as first secretary at the Indian Embassy in Berlin. His brother is Indian ambassador to Brazil. His sister-in-law is an Indian Foreign Service officer on assignment with the UN.
“In 1997, it wasn’t very fashionable to quit government service,” said Puri, 50, father of two children. “A lot of people thought I was mad for doing what I did.”
He requested a leave of absence but was told he would only be granted one if he continued earning a government salary, rather than being paid by his new employer. He refused.
As director of foreign investment in the department of economic affairs, Puri says his complete compensation package was Rs15,000. As CEO of the toll-bridge company, his take-home salary grew to Rs20,000 a month—yet devoid of the job security and perks he once enjoyed. (He would not comment on his current salary or his stake in the publicly traded company.)
Construction work started in 1998, and the flyway was commissioned in February 2001. Under the public-private partnership model, the New Okhla Industrial Development Authority (Noida), a division of the UP government, holds 6% stake in the company. At the end of the 30-year concession period, the company turns over control of the road and revenues generated from it to the authority.
Initially, after the flyway was commissioned, traffic forecasts were dismally low and the interest on its debt added up. This led to a restructuring of debt and an issue of shares worth Rs207 crore ($45 million) on the London Stock Exchange to pay off debt. Part of the proceeds will also pay for the planned link to Mayur Vihar in South Delhi.
Last year, the Noida Toll Bridge Co. Ltd declared a net profit of Rs684.70 crore for the nine months ended 31 December 2006.
Every day, 70,000 vehicles cross the DND toll plaza, entering a Noida now defined by gated commuter colonies of sprawling flats, swimming pools and tennis courts, and multinationals from Adobe Systems Inc. to small business process outsourcing (BPO) companies.
By 2021, according to an independent traffic forecast by Halcrow Consulting India Ltd, more than two lakh vehicles are expected to cross into Noida daily.
Now sitting in a spartan ground-floor office with peeling paint and Venetian blinds, Pradeep Puri can see the road that will make their journeys possible. He looks out onto the 28-lane toll plaza with bright yellow barriers opening to let cars and two-wheelers pass.
“I think we have crossed the worst,” Puri reflects. “The financials we will keep assessing, and the traffic is going to come anyway. Nobody can stop the process of economic development.”
(Sixty in Sixty is a special series that we plan to run through 2007, the 60th anniversary of India’s independence. We will introduce you to sixty Indians—both here and abroad—who are not rich or famous. These are people who are making quiet, but important, contributions without seeking headlines, to help make India and, in some cases, the world a better place. We also welcome your suggestions on people whom you think should be profiled in this series. Please send your suggestions by email to interview@livemint.com.)
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First Published: Wed, Aug 22 2007. 07 16 PM IST
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