Financial Daily from THE HINDU group of publications
Tuesday, May 03, 2005
Financial Daily from THE HINDU group of publications Tuesday, May 03, 2005 |
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Industry & Economy
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Infrastructure `Defined legal framework vital for pvt investments in infrastructure' Our Bureau
New Delhi , May 2 THE Confederation of Indian Industry (CII) on Sunday said that a stable and clearly defined legal and regulatory framework is imperative for attracting private sector participation (PSP) in the infrastructure sector. A report prepared by CII has pointed out that in India, the failure to attract a healthy flow of PSP in the infrastructure sector has been primarily on account of the lack of adequate legal and regulatory structures to monitor both investment and performance in the various sectors. It further stated that the consultation process between the public and private sector and the mechanism for dispute resolution between the infrastructure providers and users of the service had not been up to expectations. "Another problem has been the failure to separate regulation and dispute resolution from administration, in order to avoid conflicts of interest. "The establishment of autonomous regulatory agencies with independent funding and professional staff might present a possible solution to this impasse," the CII paper said. According to the report, limited legal knowledge and expertise in various State Governments and authorities concerned in India has resulted in an unfair apportionment of the commercial risks involved in certain projects. "Private players, frustrated with drawn out negotiations and the continuing renegotiations of clauses have accepted risks that should usually have been borne by the Government. The usage of standard form contracts or model laws drafted by skilled legal, technical and financial experts would assist both the Government and the private sector in this regard," the report states.
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