In India, the performance of government and private sector players, as far as project implementation is concerned, is dependent on diverse factors. These factors place private sector in a slightly disadvantaged position. It’s said that though there’s increased acceptance of ICT, penetration of e-governance in government system is low, for example, procurement process still takes place on paper.
PPP model favors the government
Under PPP projects, the terms and conditions often favor the government. For example, the request for proposals (RFPs) issued by the government puts an unlimited liability on the private sector players. There are also other penal clauses for delays only on the private sector players. There’s no such penal provision for delays on the part of the government.
No standard operating procedure
Considerable delays happen in signing at different levels in the government. The terms of payments in many cases are such that the breakeven happens after two to three years. This is an obstacle for companies. The payment procedure processing takes a long time. A standard operating procedure with attention to time could address the issue.
Project termination and clauses should be clearly definitely in the RFP. The government should be responsible for the work done until the termination of the project. Further, the government should clearly identify the hardware and software that could be imported to adjust the cost.
RFP and Performance Bank Guarantee
While it is mandatory for the private sector player to submit Performance Bank Guarantee (PBG), no such condition applies to the government.
Potential blacklisting by clients
The draft RFP should be prepared after consulting firms and should be available to all stakeholders, and the comments should be documented and presented to officials.
Though there’s a model RFP released by DeitY for IT projects, the standard format is not followed, which leads to difference in formats across projects.
Private sector players face the danger of being arbitrarily blacklisted; this threatens the credential of the company.
The PBG clause discourages startups and SMEs. On the other hand, Make in India is intended to encourage startups and SMEs.
Less clarity on roles and responsibility
Lack of clarity on roles and responsibilities leads to delays in project implementation. In the event of change in project leadership (transfer, etc.) and involvement of multiple state agencies such as NIC, NICSI, NeGD, etc., lack of synergy between the agencies of government lead to inordinate delays in project implantation. The focus should be on the end result rather than the process of implementation.
To get rid of corruption and reduce red-tapism, e-governance could be adopted as an effective tool for the purpose. For this, private sector should become a meaningful partner of the government.E-governance would bring transparency, efficiency and accountability in the government system.
The private sector in India encounters hurdles in project execution. They are also equally responsible for the loopholes in the system. They need to be plugged in order to achieve the intended objective. As a cue, to start with startups and small & medium enterprises should be encouraged to take part in the competition to get business.