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.

    Bharat Broadband Network Ltd. (BBNL)

    • BBNL is a Special Purpose Vehicle (SPV) set up by the Government of India under the Companies Act, 1956 with an authorized capital of Rs 1000 crore.
    •  It has been mandated to create the National Optical Fiber Network (NOFN) in India.

    National Optical Fibre Network (NOFN)

    • It was launched in October 2011 and renamed Bharat Net Project in 2015.
    • NOFN was modelled as an information superhighway through the creation of a robust middle-mile infrastructure.
    • Its aim was to provide broadband connectivity to all Gram Panchayats.
    • In 2019, the Ministry of Communications also launched the ‘National Broadband Mission’. 
      • Aim: To facilitate universal and equitable access to broadband services across the country.

    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.

    Public-Private Partnership (PPP)

    • It involves collaboration between a government agency and a private-sector company that can be used to finance, build, and operate projects.
    • These projects can include public transportation networks, parks, and convention centres.

    Benefits of PPP model for BharatNet

    • Optimal utilisation of funds can be done to complete the project by August 2023:
      • PPP has been known to bring in much-needed capital and technology for completing the projects on time. 
      • Better private sector management will result in optimal resource utilisation. 
      • It will also help in Faster Rollout.
    • Relieve the burden on Public Exchequer:
      • The private sector partner is expected to bring an equity investment and raise resources towards capital expenditure.
      • The private sector will also be responsible for the operation and maintenance of the network.
    • Better Access through schemes like Internet Sathi by Google:
      • The private firms can also impart skills to train villagers in using computer systems and the internet.
      • This will make Common Service Centres more efficient.
      • It will enable better access to e-services offered by various governments.
      • It will also enable online education, telemedicine, skill development, e-commerce and other applications of broadband.

    Source: IE