PPP model lifts road projects to top gear
Indian Express

If inordinate delays and expensive inconveniences seem to have dogged the fate of publicly owned roads in the country so far, the infusion of private blood into the business is rapidly transforming its fortunes. In what is a strong indicator of the success of public private partnerships (PPPs) in the sector, three of the 16 road projects undertaken on a build-operate-transfer (BOT) toll and annuity basis have been completed well ahead of time, while 11 more ongoing projects are set to go down the same road.

“Three road projects, namely the Jaipur-Kishengarh highway, Belgaum-Maharashtra road and the Nellore bypass, given on a PPP mode have been completed up to six months ahead of time while adhering to all quality parameters,” said an official at National Highways Authority of India (NHAI). “We expect several other current projects underway to also finish three to six months before the scheduled completion date.”

While the 90-km Jaipur-Kishengarh road project was awarded to GVK on a BOT toll basis in April 2003, it was completed in a record 24 months against the sanctioned 30 months allowed. The 77-km road that connects the Maharashtra border to Belgaum district, awarded to a consortium of Infrastructure Leasing & Financial Services and Punj Lloyd in June 2002, also managed completion two months ahead of schedule. The Rs 173 crore Nellore bypass was also unveiled before time, providing a boost to trade between the eastern corridor and south India.

Among the current projects that are likely to see the light of day sooner than expected are the Dhule-Pimplegaon stretch in Maharashtra, the Panipat Elevated Highway, the Salem-Kerala and Salem-Karur border roads, a stretch connecting Karur to Madurai and a number of ambitious south Indian projects like the 92 km long Ulundurpet-Padalur road.
Ringing in the efficiency are public sector IRCON and private companies like Soma Enterprises, Larsen and Toubro (L&T), IVRCL, Reliance Energy, GMR Infrastructure, Madhucon Steel, SREI Infrastructure and Navayuga Engineering, which are making the most of a liberalised road sector to drive home the moolah. GVK’s Jaipur-Kishengarh road is a case in point. While the project had no dearth of “right of way” problems, encroachments and environmental clearance issues (the company had to relocate over 600 religious structures across the 90 km stretch), an efficient scheme ensured that the project stayed on track.

The company outsourced the road construction work to two engineering, procurement, construction (EPC) contractors L&T and BSCPL. Each of these contractors was assigned the task of building the road from opposite ends of the stretch, ensuring maximum time and resource utilisation.

GVK also formulated a harsh disincentive scheme if the EPC contractors failed to adhere to schedules. “We enforced stringent liquidity damage clauses into the contract,” said Issac George, chief financial officer, GVK. “If the contractors failed to finish the project on time, they would have to compensate us for toll collection losses to the amount of Rs 25 lakh every day. At the same time, we also offered them a bonus if they completed ahead of the schedule.”

With a six month premium on completion date, each of the contractors pocketed a cool Rs 25 crore as bonus, even as GVK came out richer by Rs 50 crores due to toll revenues. “It is possible to complete projects well before time if you have the right relationship with road implementing agencies and if your finances are in order. That’s where the private sector can bring in efficiencies,” said George.

Social security tax likely to fund plan for unorganized sector
Financial Express

The government is examining a proposal to impose a social security tax for the welfare of workers in unorganised sector as recommended by the National Commission for Enterprises in the Unorganised Sector (NCEUS), the Lok Sabha was informed on Monday. In this regard, the Unorganised Sector Workers Social Security Bill, which may incorporate this recommendation, is likely to be tabled in the current session of Parliament, minister of state for labour and employment Oscar Fernandes said.

‘‘NCEUS has recommended minimum social security benefits for unorganised sector workers which include life and disability cover, health insurance, old age protection and any other scheme as deemed neccessary,’’ he said.
In reply to another question, the minister said between 2004 and 2006, as many as 4,668 workers died in industrial accidents in factories. Maximum number of accidents in factories were reported from Gujarat, where 605 workers died during the period. It was followed by Maharashtra and Andhra, where 503 and 381 persons were killed in accidents. In mines, 542 persons died in different accidents during the three-year period, he said.

Service sector to create most jobs by 2015: ILO
The Times of India

The International Labour Organisation (ILO) has predicted that the service sector will surpass all other sectors in job creation by 2015 in the Asia-Pacific region, which includes India and China.

It estimates that 40.7% of this region's total employment will be in the service sector. The share of industrial employment is expected to increase from 23.1% in 2006 to 29.4% in 2015 while the share of agricultural employment is projected to decline from 42.6% to 29.4% between 2006-2015.

In its report, 'Visions for Asia's Decent Work Decade: Sustainable Growth and Jobs to 2015', released here on Monday, the ILO cautioned that expanding output would not be enough to create jobs needed to reduce poverty and the massive informal economy.

"There remains a great deal of serious work to be done to improve the quality of jobs that are created and to ensure that the benefits of Asia's future economic growth are more equitably distributed," the report said.

It pointed out that over one billion or 61.9% of the region's total workforce was still engaged in the informal economy, with little or no social protection and often in low-productivity jobs. There was no likelihood of any major reduction in the relative size of the informal economy by 2015, the report said.

Other challenges facing the region, according to the report, were increasing migration that would see millions of workers in Asia leaving their homes each year to work abroad; accelerating rural-urban migration that would see the region’s urban population grow by 350 million by 2015 while the rural population increases by only 15 million; rising income inequalities between extreme poor and other workers, as well as between rural and urban workers.

The report called for an effective balance between flexibility, stability and security through improved labour market governance, including adoption and adherence to international labour standards, improving accountability and transparency and building the capacity of employers and workers to engage more effectively in serious dialogue.