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Unit 13: Regulatory Framework of Projects

An additional factor is geared toward protecting those workers exposed to the various radioactive Notes
fumes emitting from the e-waste they are handling. Beginning the project in December 2005,
TERI has since brought in experts from Europe to begin training Indian institutions in efficient
recycling practices. The project has also partnered with advisers from the University of Dresden
in Germany and the University of Crete in Greece.

The adoption of an ambitious e-governance plan by India is a good sign and we can hope that the
e-waste management will also find favour with the Government soon. The concept of “absolute
liability” is deterrent enough for the Government and private entrepreneurs to take
environmental issues seriously. This is more so since the defense of “sovereign immunity” is
also not available to the Government for tortuous liability. In short, e-governance presupposes
the handling of various hazards originating out of and associated with the use of ICT and there
is no reason to exclude the same from national policies pertaining to ICT and e-governance.

13.4 Developing Commercially Viable Infrastructure Projects

There is a wide spectrum of approaches to developing commercially viable infrastructure projects,
from a narrow one that focuses on engineering design to a wide one that addresses ambitious
goals, like city-wide coverage of all urban residents, including the poor. Some of the most
ambitious projects may seek higher environmental performance and “green,” energy-efficient
technologies. Commercially viable projects are capable of attracting private and institutional
investment to pay for the capital costs. Repayment of this initial investment occurs over many
years, and therefore, an owner needs to pay special attention to the long-term sustainability of
the O&M of the infrastructure. For this reason, project risks need to be identified and addressed
up front. Market demand is equally important to sustainability from the point of fully utilizing
the services and paying user charges. Even if private investment is not required, a rigorous
project development process will help produce better infrastructure in Indian cities. This chapter
presents the key issues that need to be considered when developing commercially viable projects.
The chapter does not discuss technical specifications of projects because that is primarily an
engineering exercise that emerges from the parameters outlined.
If you are responsible for implementing projects remember the following:
What is the environmental and social impact of Under-investment in basic services? What
are the main objectives for improved infrastructure services (coverage, quality, efficiency)?
What are the financial and tariff implications of new infrastructure investment? How will
O&M be paid for over time?

Are commitments in place for ensuring cost recovery? Are project revenues supplemented
with other commitments from the general revenues and/or governmental transfers?

Does the proposed institutional arrangement allocate risk to the parties best suited to
manage them? Does the structure encourage private sector expertise and commercial
investment?

Although large infrastructure projects are often risky by nature, certain structures can help
mitigate risk better than others, thereby increasing the chances of success. Unfortunately, India’s
traditional method of developing projects does not adequately address project risk. Under its
centralized development model, from independence to the mid-1990s, the central government
earmarked money for specific sectors. State governments also provided budget allocations for
urban infrastructure, and both politicians and civil servants decided how the funding would be
spent. Budget allocations accounted for more than two-thirds of the money spent on urban
services. The other third came from government-backed financial institutions that made loans
based on a national credit scheme, directed to priority sectors. Centrally directed credit, along

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