India, it appears, finds itself in a season of fighting corruption. Anna Hazare has had his way with his Jan Lokpal Bill. Prime Minister Manmohan Singh has expressed concern on graft more than once. Monday was another such occasion.
Speaking at a conference on public-private partnerships (PPPs) in the highways sector, he said: “It is necessary to demonstrate that the award, construction and operation of these (highways) projects is based on a fair and transparent approach, which eliminates any suspicion of favouritism or what might be described as crony capitalism.”
So far, so good; but almost at the same time, the deputy chairman of the Planning Commission, Montek Singh Ahluwalia, ruled out any scrutiny by the Comptroller and Auditor General (CAG) into PPP projects. He said: “The performance of the public part of the (PPP) project should be subject to proper scrutiny,?but?obviously where the private sector (is given) flexibility...you cannot subject that to CAG scrutiny.” Efforts to subject PPPs to the Right to Information, too, have been resisted.
One could say that the one hand of the government does not know what the other is saying. That, however, is not the issue. The matter is about how transparency is to be put into practice.?Structures such as PPPs have considerably overlapped the private-public divide, which is often the basis of auditing and other methods of oversight. Technically, Ahluwalia is correct in saying that only the public part of PPPs should be subjected to CAG audits. Extending it to the private part may be subject to legal challenges or, even worse, discourage private partners from participating in projects where their expertise and money are needed badly. Matters are, however, never so simple. Today, the amounts involved in such contracts are huge, very often thousands of crores of rupees; in physical terms, they involve thousands of kilometres of roads and highways. There is more at stake here than a simple public-private divide and merely in the name of protecting incentives, such contracts cannot be turned into “black boxes” that are beyond the pale of transparency.
If anything, such arguments can be overturned: excessive secrecy—and that is the right word to describe how PPPs function— can lead to cronyism, something the Prime Minister warned against on Monday. The challenge now is to give content to transparency by evolving a legal framework that ensures a free flow of information and timely, independent oversight. Otherwise, transparency will remain a dead letter.
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