New-age infrastructure needs to be amenable to the new paradigms of its utilization that are evolving, like the connected and shared models in urban public transport
One of the hard lessons that the great pandemic has hopefully taught us is the need to re-imagine our relationship with the natural world which we inhabit. The idea should be to live more lightly on the planet and be much more mindful of the fact that our individual fortunes are tightly tied to our collective security and welfare as a species, because individual threats like virus infections can be countered only by collective solutions.
We need to find new ways of ensuring the greatest good of the greatest number and focus much more on preserving that ever-diminishing thin layer of soil and sea and sky which sustains life on the planet. The creation of infrastructure is a critical area that needs to be re-looked at with fresh eyes, and we need to conceive new approaches to building assets that are robust, resilient and intelligent, while also being more sustainable by virtue of being better integrated with local environments, including the communities around which they are located.
New-age infrastructure also needs to be amenable to the new paradigms of its utilisation that are evolving, like the connected and shared models in urban public transport. The arrival of fourth generation technologies like Artificial Intelligence, the Internet of Things [IOT] and Big Data has made this task much easier.
For instance, the implantation of cheap IoT devices has opened possibilities of creating lighter infrastructure which can be better maintained, because IoT devices can dynamically send us data regarding the health of the system.
The shared models of consuming services which are increasingly becoming popular thanks to internet connectivity, like cab aggregators in urban public transport and online community marketplaces connecting people looking to rent homes could lead to reduced demands on infrastructure that needs to be freshly created in these domains.
The most impactful reform in the creation of public infrastructure in India could possibly be in improving project conception and design. Public projects in India are mostly conceived, designed and planned by institutions that are wedded from the beginning to creating a certain output, and not to a desirable outcome.
For instance, metro-rail companies in the smaller Indian cities may not have access to information on lower-cost options of moving people around the city, like elevated electric buses and sometimes lack of information around complex solutions that could become financially unviable.
Another aspect that needs to be considered is that sometimes after projects are conceived their detailed project reports are sometimes created in a rush and a few key aspects around independence of thinking, long-term sustainability, community impact or environmental fit are not given due thought.
A seminal reform that could be considered is empowering the agencies involved, the freedom to create project concept documents and detailed project reports along with the freedom to come to independent conclusions regarding project fit, viability, durability, and sustainability, which can stand the test of rigorous third-party scrutiny.
Given the increasing pressures on land use, as well as rising concerns around environmental impact and benefits to local communities, the era of mega-projects may soon be coming to a close, and solutions for the future may lie in smaller, disaggregated projects serving local communities, particularly in critical areas like power and water-supply. A related reform could be to reduce institutional separation in infrastructure creation.
We are still a long way off from bundling asset creation and maintenance obligations together, with the result that the contracting agencies that are engaged in building infrastructure would have an institutional interest in over-designing, with little obligation to ensure that the asset created is fit-for-purpose over a longer period. Incorporating maintenance covenants into asset-creation contracts will go a long way to ensuring quality, resilience and better performance.
We also need to go back to the drawing board for creating a whole new policy and regulatory environment around marrying public funding and private investments together in the common national goal of infrastructure creation.
The quantum of private investments flowing into infrastructure creation has sunk to a low of around 20%, for reasons that are well known, like the stresses faced by our banks and NBFCs.
The history of PPPs in India has been chequered, with complaints around unfair sharing of risks and rewards between public agencies and private investors on the one hand, and allegations of unfair expropriation by private investors in certain flagship projects, on the other.
The Vijay Kelkar committee’s recommendations on improving the PPP ecosystem have long been in the offing and will hopefully become policy soon. Rescuing and reforming the lending agencies, opening out new financing pipelines like infra bond markets, and redesigning the PPP ecosystem are all equally pressing compulsions for reviving private investment in this space.
In the spirit of never letting a good crisis go to waste, this is the right time like no other to stop in our tracks, and to collectively rethink our entire philosophy, our approaches, policies and regulatory architecture for creating infrastructure for the next generation, that is light on resource use, like the migration towards renewable energy; that does little damage to the environment; that benefits not just users, but also surrounding communities, and that bind the energies and resources of the public and private sectors harmoniously together in pursuit of common goals.
A version of this article appeared in The ET Government.com on 06th June 2020