PPP Model of BharatNet Project

In News

• The Department of Telecommunications (DoT) has started pre-bid meetings with various stakeholders to implement the public-private partnership model (PPP) for the BharatNet project.
  • States which took lead on the PPP model under BharatNet Phase 2 are being consulted for potential hindrances and way outs.

BharatNet Project

• About:
  • It is the central government’s flagship scheme to provide internet connectivity via National Optical Fibre Network to all 2.5 lakh gram panchayats in the country.
  • It is the world’s largest rural broadband connectivity programme.
  • It is implemented by Bharat Broadband Network Ltd. (BBNL) under the supervision of the Department of Telecommunication under the Ministry of Communications.
  • The project is being funded by Universal Service Obligation Fund (USOF).
    • The USOF was set up for improving telecom services in rural and remote areas of the country.
  • Recently it was also included in the Viability Gap Funding Program to help the Private sector play a dominant role.
    • Viability Gap Funding (VGF) is a kind of capital subsidy to attract more private investors. 
    • In this, a certain percentage of the total capital cost is paid by the government to make the project economically viable.
• Aim and Objectives:
  • The project will create a highly scalable network infrastructure accessible on a non-discriminatory basis.
  • It will provide on-demand, affordable broadband connectivity of 2 Mbps to 20 Mbps for all rural households.
  • It will help all the institutions to augment their capacity, to realise the vision of Digital India, in partnership with States and the private sector.
  • Thus, the program will facilitate the delivery of e-governance, e-health, e-education, e-banking, Internet and other services to rural India.
• Phases of the Project:

• 1st Phase: It will provide 1 lakh gram panchayats with broadband connectivity by laying underground Optic Fibre Cable (OFC) lines by December 2017.
• 2nd Phase: It will provide connectivity to all the gram panchayats in the country.
  • It will use an optimal mix of underground fibre, fibre over power lines, radio and satellite media by March 2019.
• 3rd Phase: From 2019 to 2023, a state-of-the-art, future-proof network, including fibre between districts and blocks will be laid down.
  • Ring topology will be used to reduce latency and fasten the services.

Challenges while implementing the BharatNet via PPP mode

• Choice of PPP scheme:
  • The challenge is to choose from different models of PPP for optimum utilisation of resources with minimum risk.
  • The Telecom Regulatory Authority of India had recommended BOOT/BOT models in 2016.
    • BOOT stands for Build-Own-Operate-Transfer.
    • BOT stands for Build-Operate-Transfer.
• Profit Motive of Private Firm:
  • The aim of the scheme is Digital Inclusion but if the private sector will operate the project after building it, it may charge higher prices for service.
  • It may defeat the actual objective of the scheme.
• Lack of interest shown by Private Firms
  • It has been seen that the private sector is less interested in social sector projects due to various reasons.
    • Red-tapism and excess bureaucracy.
    • Less Profit: Non-viable projects as they are serving a very small population group whose spending capacity is very less.
    • ‘Right of Way’ (RoW) is seen as a “major risk factor” by the private sector.
      • Right of Way (ROW) is the area around a pipeline or transmission line for which you receive permission to work.
      • It can be either government-owned or privately-owned.
• Implementational Challenges: Floundering Project of Phase 1 and Phase 2
  • As per an Indian Express, 2020 report, the scheme is floundering at the last mile due to the failure of the implementation agencies.
  • The DoT had been looking to rope in the private sector to complete the pending projects under Phase 1 and 2 of BharatNet.

Conclusion and Way Ahead

• PPP in BharatNet is a welcome step.
• There is a need to overcome framework and implementation related challenges in order to make it beneficial for all the stakeholders.
• The aforementioned challenges can be overcome in the following ways:
  • Discussion with all the stakeholders 
    • DetailedDeliberations can help everyone put forth their concerns.
    • Experimental case studies are taken from different states who have already implemented it can help a lot.
  • Quick and Timely release of money with reduced bureaucratic hurdles
    • Single Window Clearance, Easy Credit and release of bill amount can make the project lucrative for the private sector.
    • Safeguards must be in place under the agreement to attenuate various risks and encourage participation.
  • Trial of different PPP models at different places 
    • Various modes of PPP viz EPC, BOT, BOOT, etc may be run on a pilot basis.
    • The success may be objectively analysed and accordingly, future work may be promoted.
  • Government Subsidy to the users till the spending capacity is augmented
    • The government would need to rope in by providing subsidies initially in order to make sure the objective of Digital Penetration is achieved.

Source: IE