The central government is reportedly taking steps to accelerate award of road projects under public private partnership (PPP) model.
As part of this move, the union finance ministry plans to streamline the approval process for road projects, in line with the suggestion of the ministry of road transport and highways.
In a reflection of sluggishness in project implementation, the government could award only 1,010 km of road projects in 2012-13 as against the target of 9,500 km.
In the case of public road projects, it is clear public authorities cannot execute them efficiently as they possess no direct monetary incentives in these projects.
To overcome this incentive problem, governments in the recent past have actively vouched for the idea of public-private partnerships that could, in terms of incentives, mimic a genuinely competitive market.
According to some experts, even the PPP model is plagued by the same problem of perverse incentives that deter public authorities from effective implementation of public projects.
Some experts feel that the government must focus on improve incentive structure for such projects if they are to take off successfully.
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