ppp in environment
TRANSCRIPT
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ABSTRACT
The desired object of national development and environment protection is nothing but
improvement of the homeland in order to prepare appropriate environmental conditions for
the flourishing of the intellectual and material potentials of the society. It is obvious that there
is a possibility for the appearance of environmental problems in the course of the
developmental process. Therefore, it has become necessary to employ engineering sciences
for environment protection and to decrease the reverse effects of the civil and developmental
projects on the environment to the minimum possible levels. Historical improvements in
health through parallel upgrading of environment conditions have always depended on a
rapprochement between government and the private sector, with validation by civil society.
Society has not always been so civil, such as the urban protests in the 1830s that pitted
municipal governments in India against the working poor over housing, water and sanitation
conditions. Contentious conditions exist throughout asia, where infrastructure development
and industrial practices often inadvertently threaten health of workers, communities and
childrens; and regulatory control of industry and trade is uneven at best.But it need not be this
way. Government and the private sector can be compatible collaborators in creating a
workable framework for environmental and health protection. Good examples are water, food
and air. There are new, interesting approaches in asia, discussed below, that tap the regulatory
capacity of the public sector and the dynamic efficiency of the private sector. This project
presents a framework for analyzing the role of PPP (public private partnership) in
Environment. This paper will focus on how economic development has affected our
environment and steps taken by government and companies to protect environment under
PPP contract. Case illustration will help to understand the concept in a much enhanced
manner. Strategies and recommendations would be of extreme significance.
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OBJECTIVES
To understand the concept of PPP.
To comprehend the importance of environment.
To figure out the effects of economic development on environment.
To study the steps taken by government and companies under PPP contract,to protect
the environment.
To suggest the recommendations for solving the problems for improving environment
PPP contract.
Methodology
Data for the paper was collected by analyzing the subject matter in the field. The
subject matter reviewed, comprises of government and non government reports,
research journals, text books and web notes. Apart from it, we attended some of the
seminars on environment to comprehend the concepts in depth. Thus, project swathe
the aspects of primary as well secondary data that makes it magnificent.
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PROLOGUE
There was a time when environment was treated as a bottomless phenomenon. The quantity
of consumers was simply trifling before the sheer magnitude of natural resources to be
consumed. Management of natural resources such as forests or minerals was done by locals
who made use of them. There was no profit motive behind exploiting environmental
resources. There were no market forces driving the engines of mass production. Environment
was local. It was managed by locals based on local indigenous knowledge. Time as well as
modern science has proved that traditional local management of environment and natural
resources is the best. Whether it be Indians of Brazil or Africans or Asians, they are the best
caretakers of their resources because their knowledge of their environment is time tested.
Market forces, profit motive, mass production and modern technology have damaged our
natural environment to an alarming extent. Since our attention has been drawn to thisdamage, we must use modern techniques, modern communication and capital to preserve and
improve our natural environment.
Public Private Partnerships (PPP), ³a term which refers to a wide spectrum of possible
relationships between public and private actors for the cooperative provision of urban
infrastructure services, has been proven to be a feasible and attractive development
modality´.
In PPPs the advantages of private sector innovation, access to finance, technological
knowledge, managerial efficiency and entrepreneurial spirit are combined with the social
responsibility, social justice, public accountability, and the grasp on local knowledge
characteristic of the public sector. The cooperative functioning of the two allows for potent
and effective solutions to solve, or at least address, pressing urban environmental challenges.
Now in its second phase, the Public-Private Partnerships for Urban Environment (PPPUE)
project builds on the achievements and accomplishments made during the first phase (2002-
2004). Since the project's launch in March 2002, PPPUE together with its partners have
worked towards raising awareness of the potential of PPPs at both local and national levels
and creating an enabling environment for PPPs in local urban service delivery with continued
capacity building and policy/legislative interventions. Also in the second phase, PPPUE
expanded its coverage from five partner municipalities to ten.
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2.1 ECONOMIC DEVELOPMENT
Agriculture, services and manufacturing industries all contribute to the development of the
Indian economy. The IT outsourcing, software and call center/ BPO industries in particular
have helped propel Indian economic development in recent years.Economic development in India depends on the various sectors that constitute the Indian
economy ± these are primarily the agriculture, services and manufacturing industries.
India is rated as one of the top economies in the world in terms of the purchasing power
parity of the gross domestic product by leading financial entities of the world such as the
International Monetary Fund, the World Bank, and the CIA (as referenced in the CIA World
Factbook).
As far as agriculture is concerned, India is in the second largest in volume of output. Certain
connected sectors of the agricultural sector have played a major role in the development of
the Indian economy by providing employment to a number of people in the forestry, fishing
and logging industries. During 2005, the agricultural sector contributed 18.6% to the entire
GDP, and at least 60% of the total labour force working in India was employed in the
agricultural sector.
Production volume has gone up in Indian agriculture at a consistent rate since the 1950s.
Much of this improvement can be credited to the various five-year plans that were instituted
for the development of Indian agriculture. Developments in irrigation processes, as well as
various modern technologies used have contributed to the overall improvement of
agricultural processes. In the industrial arena, India is 14th in volume of factory output.
Economic developmental roles are also being played in the areas of gas, mining, electricity
and quarrying. All these sectors contribute significantly to the GDP, and provide jobs to
India¶s citizens.
India is regarded as the 15th best economy in terms of work production by the services
sector. A sizeable amount of the Indian workforce is also employed by the service sector. In
the ten-year period between 1990 and 2000, the rate of growth has been 7.5%, which is more
than the 4.5% rate during the 30-year period from 1951 to 1980
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Sectors such as information technology (IT), software development, call centers, IT
outsourcing, business process outsourcing (BPO), and other IT-enabled services have been
the biggest contributors in the services sectior of the Indian economy.
An increasing number of Indian companies are becoming global players. The following
Indian companies are part of the Forbes Global 2000 list:
y Infosys Technologies
y Oil and Natural Gas Corporation
y ICICI Bank
y R eliance Industries
y Steel Authority of India
y State Bank of India
y
Tata Consultancy Servicesy Indian Oil Corporation
y Tata Steel
y National Thermal Power Corporation
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2.2BENEFITS FROM THE EN VIRONMENT
R enewable resources of energy in India are natural resources that can be replenished by
natural processes at a rate comparable or faster than its rate of consumption by humans. Solar
radiation, tides, winds and hydroelectricity are perpetual resources and are considered as
renewable resources of energy as they do not have the danger of non availability. R enewable
resources may also mean commodities such as wood, paper, and leather, if harvesting is
performed in a sustainable manner.
Some natural renewable resources of energy in India include geothermal power, fresh water,
timber, and biomass. A life cycle evaluation provides a systematic means of estimating
renewability of these resources. The term renewable resources have an implication of
sustainability of the natural environment. Gasoline, coal, natural gas, diesel, and other
commodities derived from fossil fuels are non-renewable. Unlike fossil fuels, a renewable
resource can have a sustainable yield.
Solar energy is one of the prime renewable resources of energy in India. It is the energy
derived directly from the Sun. Along with nuclear energy; it is the most copious source of
energy on Earth. Solar energy is the fastest growing type of alternative energy that is
increasing at 50 percent a year. It is the photovoltaic cell, which converts sunlight directly
into electricity. The Sun yearly delivers more than 10,000 times the energy that humans
presently use.
Wind power is consequent from uneven heating of the Earth`s surface from the Sun and the
warm center. Most modern wind power is generated in the form of electricity by converting
the rotation of turbine blades into electrical current through an electrical generator. Windmills
is a much older technology that generated wind energy and is used to turn mechanical
machinery to do physical work, like crushing grain or pumping water.
Hydropower is another form of renewable resources of energy in India obtained from the
movement of water in rivers and oceans (or other energy sources). Water can likewise be
used to generate electricity using turbines, or can be used mechanically to do useful work. It
is a very common resource of energy in India.
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Geothermal power directly exploits the natural flow of heat from the ground. The available
energy from natural decay of radioactive elements in the earth¶s, crust, and mantle is roughly
equal to that of incoming solar energy, especially during the day. Oils from plants and seeds
are often used as a replacement for non-renewable diesel. Methane is also considered as a
renewable source of energy used in some Indian factories. Nuclear power or a breeder reactor
is often used as renewable resources of energy.
India is blessed with abundance of water, sunlight, and biomass. Dynamic efforts during the
past two decades are now bearing fruit as people in all walks of life have become more aware
of the benefits of renewable energy. India has the world`s largest programme for renewable
energy. Government created the Department of Non-conventional Energy Sources (DNES) in
1982. A complete Ministry of Non-conventional Energy Sources was established in 1992
and the Prime Minister controls the activities of this ministry. The activities of this
department promote renewable energy technologies, an environment conducive to promote
renewable energy technologies and renewable energy resource assessment. Creating an
environment conducive for their commercialization, research, development, and production
of biogas units, solar thermal devices, solar photovoltaics, cookstoves, wind energy and small
hydropower units are also some more responsibilities of the ministry
Wind Power in India has made a significant role in the domain of energy resources. India
now ranks as a "wind superpower" with an installed wind power capacity of almost 1167
MW and about 5 billion units of electricity have been supplied to the national grid till date.
The wind resource assessment programme includes wind monitoring and wind mapping that
covers 800 stations in 24 states with 193 wind-monitoring stations in operations. Altogether
13 states of India acquire a net potential of about 45000 MW wind energy. The development
of wind power in India began in the 1990s, and has significantly increased in the last few
years.
Solar water heaters have proved the most popular so far and solar photovoltaic for
decentralized power supply is fast becoming popular all across the rural and remote areas.
More than 700000 PV systems generating 44 MW have been installed all over the Indian
states. Under the water pumping programme more than 3000 systems have been installed so
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far and the market for solar lighting and solar pumping is far from getting saturated. Solar
drying is one area, which offers very good scenario in food, agricultural and chemical
products drying applications. More than 700000 PV systems of capacity over 44MW for
different solar applications are installed all over India. The market segment and usage is
mainly for home lighting, street lighting, solar lanterns and water pumping for irrigation. As
the demand for power grows in the nation, traditional fuel based power-generating capacity
also grows, SPV based power generation is believed to be a source to cater to the expected
deficits. Especially in rural areas, where the likelihood of conventional electric lines is
remote, SPV power generation has become best choice.
India is gifted with economically exploitable and feasible hydro potential assessed to be
about 84,000 MW at 60% load factor. In addition, 6780 MW in terms of installed capacity
from Small, Mini, and Micro Hydel schemes have been assessed in India. Some of the
advantages of Hydro Power include saving scarce fuel reserves, cost of generation, operation
and maintenance is far lower than the other sources of energy, ability to start and stop quickly
and immediate load acceptance makes it suitable to meet peak demand and for enhancing
system reliability and stability, has higher efficiency (over 90%) compared to thermal (35%)
and gas (around 50%) and so on.
Indian geothermal power is another active renewable resources of energy in India that have
the capacity to produce 10,600 MW of power- a figure which is five time greater than the
combined power being produced from non-conventional energy sources such as wind, solar
and biomass. With escalating environmental problems with coal based projects, India has to
depend on clean, cheap, rural based and eco-friendly geothermal power in future. Nuclear
power is the fourth-largest source of electricity in India after thermal, hydro and renewable
sources of electricity in India. As of 2008, India has 17 nuclear power plants in operation,
generating almost 4,120 MW while 6 other are under construction and are expected to
generate an additional of 3,160 MW approximately. As of 2009 survey, India stands 9th in
the world in regards to number of operational nuclear power reactors. India stands at a
promising position to acquire one of the most prestigious rankings as a supreme nation using
renewable resources of energy at its best.
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Non-renewable resources of energy in India refers to the natural resources of energy that
cannot be produced, regenerated, re-grown, or reused on a large scale. These non-renewable
resources usually exist in a fixed amount and are consumed much faster than nature can
recreate them. Fossil fuel including coal, petroleum and natural gas are some examples of
non-renewable resources of energy in India. On the other hand, resources such as timber or
metals, which can be recycled, are known as the renewable resources of energy in India. A
non-renewable resource is always strained down with anabolic procedures that use up energy.
Non-renewable resources of energy in India such as coal, petroleum, oil and natural gas
require millions of years to form naturally and cannot be replaced as quickly as they can be
consumed. Eventually natural resources will become too costly to reap and mankind will try
to find other sources of energy. At present, the main energy sources used by the Indian
population are non-renewable sources of energy.
C oal occupies the premier position as a non-renewable resource of energy in India. The coal
industry in India contributes immensely to the present commercial and economic successes.
Industries such as steel and carbo-chemicals largely depend upon coal industry. The process
of coal extraction in India was started in the year 1814. Now, after 60 years, petroleum has
become an important source of energy in India and also has become an important public
sector undertaking with abundant capable officers and updated technology is being used that
is comparable with some of the most advanced nations of the world.
The role of oil and natural gas in India is very significant as it is one of the biggest
contributors to both the Central and State treasuries. Natural gas is presently one of the most
preferred fuels due to its environmentally gentle nature, greater efficiency and cost
effectiveness. The demand for natural gas has greatly increased in the last two decades at the
global level. In India too, the natural gas sector has gained significance, particularly in the
last decade, and natural gas is said to be the fuel of the 21st century.
Non renewable sources of energy have been used since the primitive times in the nation and
the increase in population justifies the increase in use of these resources. However, the
unimaginable usage of these resources has created an air of conservation requirements. These
non-renewable resources of energy are now of a serious concern to the Indian government.
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2.3 PPP INEN VIRONMENT
There was a time when environment was treated as a bottomless phenomenon. The quantity
of consumers was simply trifling before the sheer magnitude of natural resources to be
consumed. Management of natural resources such as forests or minerals was done by locals
who made use of them. There was no profit motive behind exploiting environmental
resources. There were no market forces driving the engines of mass production. Environment
was local. It was managed by locals based on local indigenous knowledge. Time as well as
modern science has proved that traditional local management of environment and natural
resources is the best. Whether it be Indians of Brazil or Africans or Asians, they are the best
caretakers of their resources because their knowledge of their environment is time tested.
Market forces, profit motive, mass production and modern technology have damaged our
natural environment to an alarming extent. Since our attention has been drawn to thisdamage, we must use modern techniques, modern communication and capital to preserve and
improve our natural environment.
India is equipped with a solid brigade of legal provisions and policy documents designed to
protect and improve the natural environment. Article 48(a) directs the State to take strong
measures not only for its protection but also work actively for its improvement. Article 51(a)
incurs a corresponding duty on the citizen to do the same. We have an Air (Prevention and
Control of Pollution) Act and a similar Water Act. We have an Environmental Protection Act
of 1986 amended from time to time to control hazardous pollutants. Each one of our nine five
year plans contains a chapter on safeguarding the environment. We have Forest Acts
stretching from 1861 to 1988. We have State and Central boards for the prevention of
pollution. Our Judiciary has been exceptionally active in allowing public interest litigations
that have resulted in the State being directed to take measures for its improvement or to
refrain from taking measures that would degenerate our ecology. However, the core issues
effecting or rather controlling India's natural environment have remained the same.
Who should control India's forest wealth? Should the traditional local tribal manage forest
resources with his age-old knowledge reducing the government to a mere assistant? On the
other hand, should forests be managed by the Central government? Before the British came to
India, forests were the property of locals who survived on them as well as took loving care of
them. As British gained control of India, they simply threw the tribal out of this management.
Their concern was entirely different. They gave contracts for felling forests and such felling
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was immense all across Indian sub-continent. They wanted to increase revenue by selling
timber and converting forestland into agricultural land. Timber was required for the
expansion of railways, construction of bridges and buildings. R ight from the forest Act of
1861 till 1927, the British disassociated the local traditional dweller from its management.
All these Acts contain a provision of arrest without warrant for anyone who encroached upon
forestland without permission from the British officer. Whether it be a cattle grazier or a
woman collecting dry wood for fuel. The same practice has continued after independence.
Forest wealth has been centralized and the local dweller is as angry with the administration as
ever. Since he gets no incentive by protecting his forest, he does not bother about it anymore.
Until this issue of local versus government control is resolved, forest resources will continue
to be exploited and mismanaged in India.
CHAR ACTERISTICS OF PPP:-
Growing popularity:- Since the 1990s, there has been a rapid rise of PPPs across the world.
Governments in developing as well as developed countries are using PPP arrangements for
improved delivery of infrastructure services. Governments are building transport (roads,
railways, toll bridges), education (schools and universities), healthcare (hospitals and clinics),
waste management (collection, waste-to-energy plants), and water (collection, treatment, and
distribution) infrastructure through PPP. PPP is becoming the preferred method for public procurement of infrastructure and infrastructure services projects throughout the world.
Globally, governments are increasingly constrained in mobilizing the required financial and
technical resources and the executive capacity to cope with the rising demand for water
supply, sewerage, drainage, electricity supply, and solidwaste management. R apid economic
growth, growing urban population, increasing rural±urban migration, and all-round social and
economic development have compounded the pressure on the existing environment, and
increased the demand± supply gap in most of the developing world.
Countries and governments, especially in the developing world, are experiencing increasing
pressure from their citizens, civil society organizations, and the media to provide accessible
and affordable infrastructure and basic services. The pressure has also come from the
international compact on Millennium Development Goals (MDGs), under which country
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progress in terms of access to safe drinking water, sanitation, health, etc. is being monitored.
R ising costs of maintaining and operating existing assets, inability to increase revenue and
cut costs and waste, and rising constraints on budgets and borrowing, do not allow
governments to make the required investments in upgrading or rehabilitating the existing
environment
Need for new financing and institutional mechanisms. Governments have been pushed to
exploring new and innovative financing methods in which private sector investment can be
attracted through a mutually beneficial arrangement. Since neither the public sector nor the
private sector can meet the financial requirements for environment in isolation, the PPP
model has come to represent a logical, viable, and necessary option for them to work
together.
Benefits and strengths. The emergence of PPPs is seen as a sustainable financing and
institutional mechanism with the potential of bridging the environment gap. PPPs primarily
represent value for money in public procurement and efficient operation. Apart from enabling
private investment flows, PPPs also deliver efficiency gains and enhanced impact of the
investments. The efficient use of resources, availability of modern technology, better project
design and implementation, and improved operations combine to deliver efficiency and
effectiveness gains which are not readily produced in a public sector project.
PPP projects also lead to faster implementation, reduced lifecycle costs, and optimal risk
allocation. Private management also increases accountability and incentivizes performance
and maintenance of required service standards. Finally, PPPs result in improved delivery of
public services and promote public sector reforms.
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PPP strengths and effectiveness
Access to project finance. The foremost benefit of adopting the PPP route is the ability to
access capital funding from the private sector, considering that funding is getting increasingly
limited from public sector budgets. Thus, PPPs allow governments to overcome their
budgetary and borrowing constraints and raise finance for high-priority environmental
projects.
y R obust And Dynamic Structure;
y Government In An Enabler R ole;
y Government Ownership Is High;
y Governance Structure Ensures Consumer And Public Interests Are
Safeguarded;
y Commercial Interest Protected;
y Domicile R isks To Parties That Are Well Equipped To Deal With
Them;
y Transparent And Well-Conceived Contracts;
y Documentation R ecognizes R ights And R esponsibilities Of All
Project-R elated
y Parties;
y Concerns Of All Stakeholders Addressed;
y Involves Participation Of A Large Number Of Institutions:
Government, Politicians,
y R obust And Dynamic Structure;
y Government In An Enabler R ole;
y Government Ownership Is High;
y Governance Structure Ensures Consumer And Public Interests Are
Safeguarded;
y Commercial Interest Protected;
y Domicile R isks To Parties That Are Well Equipped To Deal With
Them;
y Transparent And Well-Conceived Contracts;
y Documentation R ecognizes R ights And R esponsibilities Of All
Project-R elated
y Parties;
y Concerns Of All Stakeholders Addressed;
y Involves Participation Of A Large Number Of Institutions:
Government, Politicians,
y R obust And Dynamic Structure;
y Government In An Enabler R ole;
y Government Ownership Is High;
y Governance Structure Ensures Consumer And Public Interests Are
Safeguarded;
y Commercial Interest Protected;
y Domicile R isks To Parties That Are Well Equipped To Deal With
Them;
y Transparent And Well-Conceived Contracts;
y Documentation R ecognizes R ights And R esponsibilities Of All
Project-R elated
y Parties;
y Concerns Of All Stakeholders Addressed;
y Involves Participation Of A Large Number Of Institutions:
Government, Politicians,
y R obust And Dynamic Structure;
y Government In An Enabler R ole;
y Government Ownership Is High;
y Governance Structure Ensures Consumer And Public Interests Are
Safeguarded;
y Commercial Interest Protected;
y Domicile R isks To Parties That Are Well Equipped To Deal With
Them;
y Transparent And Well-Conceived Contracts;
y Documentation R ecognizes R ights And R esponsibilities Of All
Project-R elated
y Parties;
y Concerns Of All Stakeholders Addressed;
y Involves Participation Of A Large Number Of Institutions:
Government, Politicians,
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3.1 Effects of Economic Development on environment
The issue of economic growth versus environmental conservation can also be seen as
developed countries vs developing ones. Industrial countries such as the USA and Germany
have depended upon polluting industries for their wealth. Now they fear that uncontrolled
economic development in the Third World will lead to environmental disaster. They point out
that massive clearing of tropical rainforest for farming threatens biodiversity and may affect
the global climate. At the same time relying upon heavy industry adds more pollution to the
air, soil and water sources, while a richer population demands more energy, often produced
from burning dirty fossil fuels such as coal. Developing countries such as China and Brazil
point out that they must make industrialisation and economic development a priority becausethey have to support their growing populations. Developing countries must address current
problems; they cannot afford to worry about the distant future. They also point out that as
First World countries are most to blame for current environmental damage, it is unfair to
demand that developing nations limit their own growth to solve these problems.
We have already wasted and destroyed vast amounts of natural resources, and in so doing
have put earth at risk. We must preserve the earth for our children and grandchildren. In any
case, poverty and environmental damage are often linked. Destroying the rainforest gives
native peoples nowhere to go except urban slums. Polluted water can lead to crop failures.
Climate change will turn fertile fields into desert and flood coastal areas where hundreds of
millions live. Developing countries have to choose sustainable development if they want a
future for their people.
No one wants to stop economic progress that could give millions better lives. But we must
insist on sustainable development that combines environmental care, social justice and
economic growth. Earth cannot support unrestricted growth. Companies in developed
countries already have higher costs of production because of rules to protect the environment.
It is unfair if they then see their prices undercut by goods produced cheaply in developing
countries at the cost of great pollution.
Unchecked population growth has a negative impact on any nation, as well as on the whol
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planet. Both the poverty and the environmental problems of sub-Saharan Africa are largely
the result of rapid population growth putting pressure on limited resources. At the same time
China has become wealthy while following a ³one-child´ per couple policy. Limiting
population growth will result in a higher standard of living and will preserve the
environment.
Nations are losing more from pollution than they are gaining from industrialisation. China is
a perfect example. Twenty years of uncontrolled economic development have created serious,
chronic air and water pollution. This has increased health problems and resulted in annual
losses to farmers of crops worth billions of dollars. So uncontrolled growth is not only bad
for the environment, it is also makes no economic sense.
Looking after our fragile world has to be a partnership. Climate change will affect the whol
planet, not just the developed world. In fact it is likely to have particularly terrible effects on
developing countries as sea levels rise, deserts advance, and natural disasters become mor
common. It is no use Europe trying to cut its emissions into the atmosphere if unchecke
growth in China and India leads to much greater overall pollution. Instead, developed
countries need to transfer greener technologies to the developing world, paying for
environmental protection and making sustainability a condition for aid.
The Green R evolution is threatening the biodiversity of the Third World by replacing nativeseeds with hybrids. We do not know what the long-term environmental or economic
consequences will be. We do know that in the short run, such hybrid crops can cause
environmental problems by crowding out native plants and the wildlife which relies on them.
The farmer growing hybrid crops must buy costly new seed every year because it cannot be
saved to plant the following year¶s crops. Farmers using hybrid seeds in what was the richest
part of India went bankrupt. As a result, fertile lands lay idle and unploughed, resulting in
droughts and desertification.
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3.2 EX L IT TI N ENVIR NMENT R E N MI DEVEL MENT
Entry Points for Action
HUMAN ACTIVITIES IMPACTS/CAUSES STRATEGIES RAPID URBAN GROWTH Rapid uncontrolled growth
of urban areas, particularly
low income.
INSUFFICIENT LAND AND HOUSING
SUPPLY Insufficient serviced land and shelter.
Poorly functioning urban land and
housing market
Over-regulated prices
Lack of affordable housing for poor.
PROPERTY RIGHTS/MORTGAGES/
REGULATIONS Reform property rights
Develop mortgage financing
Introduce affordable standards and target
subsidies to the poor
Reduce unneeded regulations, government
interventions and subsidies.
RAPID DEMAND FOR
SERVICES Rapid increase of demand
for services: water supply,
sanitation, drainage, solid
waste collection, and
transport; both in quantity and
quality
INABILITY TO PROVIDE BASIC
ENVIRONMENTAL INFRASTRUCTURE
AND SERVICES Domination of supply by government
monopoly
Prices heavily regulated
Heavy subsidies
DEMAND MANAGEMENT/SUBSIDY
REFORM /DECENTRALIZATION Introduce pricing and demand management
Reduce subsidies
Move toward decentralization, privatization,
participation
UNCONTROLLED POLLUTED WATER AND CHARGES/SUBSIDIES/
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pr i
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LACK OF CONSIDERATION
FOR ENVIRONMENTAL
HAZARDS IN
DEVELOPMENT
Natur al and 0
an-made
1
azar ds
HIGH-RISK AREAS2
ITH SEVERE
AFFECTS FROM DISASTERS
Poor l3
f unctioning land markets
Ineff ecti4
e land policies
Poor constr uction pr actices
Inadequate regulation and enf or cement
5 ow- income settlements alongside
6 azar dous acti4
ities
ENABLEMENT /DISINCENTIVES/
ENFORCEMENT /PREPAREDNESS
Enable land markets
Provide disincentives to occupation of 7 igh-
r isk areas, incentives f or using disaster -
resistant constr uction techniques
Introduce and enf or ced environmental
zoning
For mulate ur ban disaster preparedness
plans and strengthen response capacit8
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3.3 Environmental issues related to PPP projects
Shift from Negotiation to Competitive Bidding. Initial project ts were awarded on
negotiation basis, as not many private players were interested in the bidding process. This
situation changed over the years for three reasons: (a) risk profiles (primarily traffic and
regulatory) become clearer and (b) some projects demonstrated viability, and (c) user
charges were accepted with time. Competitive bidding had established trust in the public and
political circles. In the future, the projects were expected to be awarded only on competitive
bidding.
Project Structure/Size. Initially, projects of smaller sizes were awarded as no bidder was
ready to take a long term contract. However, the average length of award has been increasing
over the years. In a network infrastructure like roads, it is very important to have the whole
network in good quality for optimal returns. One poor stretch of road may dissuade a section
of users from using the whole corridor as the perceived benefit may become marginal. In
such cases, all the private players stand to lose due to the poor maintenance by one player.
The government was yet to come up with a mechanism to ensure that all the players within a
sub network provide good quality service.
Willingness to Pay. Initially the infrastructure was understood as a facility to be provided by
the government and there were protests against asking commuters to pay for the use of roads.
However, with time, users realized the benefit from such roads and slowly agreedto the
concept of a user fee.
R egulatory elays. The environmental regulations were simplified and to a large extent and
as time went on the time span for each of the activities, as related to regulation, was specified
in the Act. R esettlement and rehabilitation (R&R ) controversies (core of land acquisition
problems) were also dealt with by modifying the regulation and allowing for higher
compensation. However, this was a lengthy process as land markets were distorted due to
regulatory and informational asymmetry which lead to excessive under pricing of land under
present circumstances.
R eligious Sentiments. Some of the projects have been delayed as the prayer halls were
encroaching on the right of way of the road. Sometimes, road alignments had to be diverted
to avoid hurting religious sentiments. In some case, these building were reconstructed or
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shifted by the government to clear the way. These were not considered in the original
estimate and hence led to cost and time overruns.
Absorption of Economic Loss due to elays. The economic costs of delays are very high
for mega projects. In case of a road project, congestion would lead to higher inventory
carrying costs, higher inventory requirements, increased pollution, and higher fuel
consumption. In most cases, the cost gets transferred to the tax payers and users of the facility
in the long run. The fairness of this transfer can be questioned.
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STRATEGIES
What can the public-private sector do to improve environmental services?
Private sector involvement in infrastructure provision has been increasing rapidly over
the past decade, even in low-income countries. The fastest growth has been in the energy
and telecommunications sectors but an increasing number of initiatives involve water,
sanitation and waste mana ement. Most of these have been in lar er and more affluen
4.2 Steps taken b y the government under ppp contract
Speedy And Flexible Procedures For Approval Of Projects;
Increased Vgf Financing For Hill And Special Category States;
Fast-Tracking Of Vgf Projects For Disadvantaged States And Areas;
R elaxation In Project Detail R equirements For Initial Eligibility And In-Principle Approval;
Eligibility For Projects Implemented Through SpvR oute, Like The R ailways;
Inclusion Of Projects Through The Swiss Challenge R oute, R ural Sector Projects, And
Unfinished Projects;
Inclusion Of Land Costs Under Vgf Financing; And
Comprehensively Updating The Vgf Documentation To Include These Suggestions.
To save time, costs and efforts, it is suggested that the VGF approval procedure could be
phased in three parts, namely, (i) in-principle eligibility: after prefeasibility studies are
introduced; (ii) in-principle approval; and (iii) final approval.
Capacity building. TA(technical assistance) and capacity building have been identified as the
topmost priority. Areas identified for central assistance are:
Formulation Of PPP Policy And Guidelines;
Formulation Of Environment Act And Development Of PPP R egulatory Framework;
Setting Up PPP Cells At State Level;
Harmonized And Centralized Handling Of Ppps In The States;
Funding And R esources For Developing And Structuring Projects, As In The Case Of Mega
Projects Such As In Water, Power Etc. In Line With The JNNUR M;
Formulation Of Legally And Financially Sound Model Procedure Covering State
Government Initiatives And Priorities 59
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60 Facilitating Public - Private Partnership various stages from conceptualization to physical
construction, contract monitoring and scheduling;
Frameworks For Evaluating The R evenue And R eturn Of The Project;
Developing And Disseminating Standardized Guidelines On Public Sector Comparator
(Psc) And Its Comparison With Private Sector Predictor And Also With Preferred/Lowest
Bid;
Mcas (Model Concession Agreement)And Other Model Documents Across A R ange Of
Infrastructure Sectors;
Methodology For Finalizing Projects On The Swiss Challenge Model;
Updated Information On Ppps Being Executed Across Sectors And States;
Potential Financing Sources, Including Long-Term Debt, Tapping Across Various Sectors;
Assistance Of International Funding Agencies At Concessional Terms, Especially For
Critical Infrastructure Where The Private Sector May Not Be Immediately Interested;
Streamlined And Time-Bound Procedures For Granting Approvals R elating To
Environment, Land Acquisition, R ailways, Airport Authority, Etc.
Recommendations for improving environment under Public Private Partnership Contract.
y The Central Government, shall have the power to take all such measures as it deems
necessary or expedient for the purpose of protecting and improving the quality of the
environment and preventing controlling and abating environmental pollution.
y Such measures may include measures with respect to all or any of the following
matters, namely:
i. co-ordination of actions by the State Governments, officers and other authorities-
(a) under this Act, or the rules made thereunder, or
(b) under any other law for the time being in force which is relatable to the objects of
this Act;
ii. planning and execution of a nation-wide programme for the prevention, control and
abatement of environmental pollution;
iii. laying down standards for the quality of environment in its various aspects;
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iv. laying down standards for emission or discharge of environmental pollutants from
various sources whatsoever.
v. Provided that different standards for emission or discharge may be laid down under
this clause from different sources having regard to the quality or composition of the
emission or discharge of environmental pollutants from such sources;
vi. restriction of areas in which any industries, operations or processes or class of
industries, operations or processes shall not be carried out or shall be carried out
subject to certain safeguards;
vii. laying down procedures and safeguards for the prevention of accidents which may
cause environmental pollution and remedial measures for such accidents;
viii. laying down procedures and safeguards for the handling of hazardous substances;
ix. examination of such manufacturing processes, materials and substances as are likely
to cause environmental pollution;
x. carrying out and sponsoring investigations and research relating to problems of
environmental pollution;
xi. establishment or recognition of environmental laboratories and institutes to carry out
the functions entrusted to such environmental laboratories and institutes under this
Act;
xii. collection and dissemination of information in respect of matters relating to
environmental pollution;
xiii. preparation of manuals, codes or guides relating to the prevention, control and
abatement of environmental pollution; such other matters as the Central Government
deems necessary or expedient for the purpose of securing the effective
implementation of the provisions of this Act.
y The Central Government may, if it considers it necessary or expedient so to do for the
purpose of this Act, by order, published in the Official Gazette, constitute an authority
or authorities by such name or names as may be specified in the order for the purpose
of exercising and performing such of the powers and functions (including the power
to issue directions under section (5) of the Central Government under this Act and for
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taking measures with respect to such of the matters referred to in sub-section (2) as
may be mentioned in the order and subject to the supervision and control of the
Central Government and the provisions of such order, such authority or authorities
may exercise and powers or perform the functions or take the measures so mentioned
in the order as if such authority or authorities had been empowered by this Act to
exercise those powers or perform those functions or take such measures.
As considerable adverse environment impact has been caused due to degradation of the
environment with excessive soil erosion and water and air pollution due to certain
development activities therefore it is necessary to protect the environment. This can be
achieved only by careful assessment of a project proposed to be located in any area, on the
basis of an environment impact assessment and environment management plan for the
prevention, elimination or mitigation of the adverse impacts, right from the inception stage of the project.
The Central Government has passed certain notifications laying that the expansion or
modernisation of any existing industry or new projects listed shall not be undertaken in any
part of India, unless it gets environmental clearance by the Central Government, or the State
Government.
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Case Study
Bangalore Mysore Infrastructure Corridor
Facts
y The Bangalore Mysore Infrastructure Corridor (BMIC) was envisaged, as early as
1988, with the twin objectives of connecting Bangalore and Mysore (two rapidly
growing cities in Karnataka) with an expressway and developing the infrastructure
around the periphery of Bangalore city and around the expressway.
y The project was awarded by Karnataka (a state government within whose jurisdiction
the stretch was) on a ³Build Own Operate Transfer ³ (BOOT) basis to Nandi
Infrastructure Corridor Enterprises Ltd (NICE) in October 1998 on negotiation basis,
after an unsuccessful round of bidding for the project.
y The project scope included construction of the expressway between Bangalore and
Mysore and five townships along the expressway (R aghuram and Sundaram, 2009
forthcoming).
K ey Issues
y The clearance from Karnataka SPCB required public hearings. The first public
hearing was held on 9 March 2000 in Bangalore and subsequent hearings were to be
conducted at Mandya and Mysore.
y These hearings were postponed due to lack of information among the public regarding
the project,
y Hearings were then conducted on 30 June in Mysore, 3 July in Mandya, and 5 July in
Bangalore.
y On 1 August 2000, the Karnataka State Pollution Control Board (KSPCB) issued a
NOC to the project contingent on several conditions.
y On 8 August 2001 the MOEF gave a clearance to the road/expressway component of
the project, subject to meeting the specified condition
y The approval did not go well with the environmentalists. Many environmentalists
claimed that rare species of flora and fauna were affected.
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y Contamination of water (in lakes in the vicinity) was another challenge that the
project was facing.In January 2008, BWSSB decided not to permit NICE to shift
water and sewerage lines into four locations as it could have affected the water supply
and sanitation in the city.
Alternative courses of action
y NICE had entered into an agreement with Bangalore Water Supply and Sewerage
Board (BWSSB) for use of more than 150 MLD of water which was 1/4of the amount
of the water supplied to Bangalore city.
y Some farmers contested that the notice was vague in its message as the exact use was
not stated.
y In addition, there were ongoing disputes on the Cauvery river water between Tamil
Nadu and Karnataka. BMIC was expected to receive 85 MLD of waste water free for
non potable use, depriving farmers who used it for various agricultural purposes.
y The discrepancy in land requirement created both political and legal obstructions for
the project.
Actions taken
y On 24 January 2008, the High Court of Karnataka directed the BWSSB to shift the
water and sewage pipelines in four locations so that NICE could complete the
peripheral road, which was part of the BMIC project.
y The notice for land acquisition was served under the Karnataka Industrial Areas
Development Board (KIADB) Act and the purpose was stated as industrial use.
y The government order (GO) of 1995 identified 18,313 acres (7,414 hectares) as the
land requirement for the project. In 1997 the FA specified 20,193 acres (8,186
hectares) of land while the formal award of they contract to NICE in 1998 specified 23,846 acres (10,659 hectares). By 2004, KIADB
had notified 29,258 acres (12,631 hectares) for land acquisition.
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R ecommendations
y The decision to notify or denotify a plot could have been taken depending on the
personal gain that could be made by the politicians and the administrators.
y This rent seeking was facilitated by the absence of any detailed project report which
gave the decision makers absolute discretion.
y The project created further controversies when the more than half a dozen top
officials, who awarded the project, accepted employment offers from the private party
after their retirement and within few years of the award itself.
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Conclusion
The acceptance of a user fee and development of alternate sources of revenue had helped
attract larger investments in megaprojects. With increasing private sector participation,
delays due to project management is expected to reduce significantly and the focus would be
left to environmental and land acquisition issues. The modifications in the regulatory
framework on these issues are moves in the right direction. However, methods used for
assessments related to environmental impact and land acquisition are still conducting manual
surveys, making the whole process time consuming. Technology could be a good instrument
in reducing the time required for these studies as well as in bringing transparency in the
system. Decentralization with capacity building at the state level would also help in the long
run in reducing these delays.
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w iblography
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www.environmentalprotectionact.com
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BIBLOGRAPHY
Justice, posterity, and the environment by Wilfred Beckerman and Joanna Pasek.
Fairness and futurity: essays on environmental sustainability and social justice edited
byAndrew Dobson.
Public private partnership by Yescumbe, E.R .
The challenge of public private partnership by Hodge, Greve.c