pwc paper on ppp for wb workshop-v1.5

World Bank

Workshop on

LAND ADMINISTRATION AND LAND POLICY IN INDIA

January 5th & 6th, 2006

New Delhi

Cost Recovery Policies, PPPs and Sustainability

of Land Records Management in India

Presented By

Mr. Neel Ratan, Executive Director

Cost Recovery Policies, PPPs and Sustainability of Land Records Management in India

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Table of Contents

1. Introduction 3 2. Current Status of Land Records in India 3

2.1 Steep fall in collection of land revenue 3 2.2 No periodic updating of land records 3

3. Public Private Partnerships for Self Sustainability 5 3.1 Rationale for Public Private Partnership 5 3.2 Types of PPP models 5 3.3 Opportunities for PPP in land records management 7 3.4 Possible benefits of PPP in land records management 7 3.5 Issues to be addressed in implementing PPP models 8 3.6 Guidelines for successful PPP implementation 9

4. Existing PPP Models in Land Records Management in India 11 5. International Trends 16 6. Conclusion 20 7. Reference Material 20


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1. Introduction

Land records management deals with the recording, processing and dissemination of information

about ownership, value and use of land and its associated resources. It includes the determination of

property rights and other attributes of the land that relate to its value and use, the survey and

description of these, their detailed documentation and the provision of relevant information in support

of land markets. The official land registers maintained by the government should ideally guarantee

ownership and other rights in land and support secure mechanisms for the transfer and financing of

real estate. As a basis for sustainable land management these land registers justify considerable

investment of human and financial resources in appropriate land administration systems. Establishing

and maintaining such systems is a major challenge for many a countries world-wide. This paper

reflects on the current status of land records administration in India, the issues & concerns in the

system and the suitability of Public Private Partnerships (PPP) in addressing the same.

2. Current Status of Land Records in India 2.1 Steep fall in collection of land revenue

In the ancient and medieval periods and for several decades after the establishment of British power

in India, land revenue was the most important source of government revenues. The assessment and

collection of land revenue was therefore one of the most important functions of government. In 1841,

land revenue constituted 60% of total British government revenue and during even shortly after

independence land revenue was an important source of income for the states such as Madhya

Pradesh (43 per cent), Rajasthan (40 per cent), Uttar Pradesh (40 per cent), Orissa (33 per cent) and

Bihar (30 per cent) of gross receipts of the state. However, over a period of time the contribution of

land revenue in the total income has declined primarily because of the trend of abolishing land

revenue on uneconomic holdings, frequent exemptions on account of floods and droughts, increased

land disputes, and the lack of political will to tax the agricultural and rural sector. Currently, it

constitutes less than 0.5% of gross receipts of many states. Apart from the decreasing share of land

revenue in the overall income, land revenue is not even sufficient to cover the operational expenses of

the respective departments involved in the land administration.

2.2 No periodic updating of land records The practice of updating of land records at the village level by differently designated revenue officials

in different states has been badly neglected. Very few states have a well managed and efficient

administrative apparatus of periodical updating of the land records. In most states, village and field

maps, record of rights and land measurement records have become unserviceable/ obsolete. In

several States, the record of right is invariably out-of-date, on account of mutations not being carried


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out in time. Typically, the rules require that as soon as inheritance, partition or transfers take place,

the names of the new owners should be entered in Mutation registers. But the names of the new

transferees are not being mutated regularly and timely. As a result, the work of the mutation has fallen

in arrears. This is primarily due to lack of supervision by the superiors, and low priority paid to this

task, unavailability of adequate number of resources to carry out the function etc. Lack of clear

accountability has also provided opportunities for unauthorized changes to land records, at times,

often resulting in litigations in courts. Litigation in India is expensive and time consuming.

Government employees who are required to maintain the land records upto date are also

overburdened with many other duties. Another critical factor is lack of training facilities to use modern

equipments. The revision survey by conventional means typically takes about ten to thirty years. But

even the same is not carried out for several decades in most of the states. Some of the states are

facing acute shortage of printed forms and maps simply because their printing presses have become

outdated and are not professionally managed.

Mostly land records departments operate as service organizations with a state mandate, offering

services almost free of cost. They are traditional in conducting their business and depend heavily on

secure Government funds. Modern concepts and the opportunities offered by Information Technology

for the management of their operations, improving the quality of service delivery and better utilization

of resources, etc. are not applied to their potential. These departments often have natural monopolies

over their information sources. Such control over information gives them considerable market power,

thus restricting trusted third party operations in the market. They lack experience/ motivation for

creation of services beyond their capacity. Consequently, such business barriers hamper the

possibilities for the economic exploitation of foundation data available in these organizations and in

particular the creation of value-added, diverse services by private companies. Cost recovery is not a

common practice in India and the same applies to Land records management too,

Besides the traditional users of land information, such as governmental departments and local

authorities, the private sector also provides important customer groups for land administration data,

including surveyors, engineers, banks, lawyers, notaries or economists. This begs the question as to

whether the private sector should also take a proactive role within the organizational set-up for

developing land administration systems in India. Because of the need for efficient and streamlined

institutional arrangements for land administration, the involvement of the private sector in these

arrangements is considered to be both important & desirable. In the recent past , particularly in the

previous five years, many new developments have taken place with respect to creation of Land

Records Management System in India. A few illustrative case studies reflect the current situation w.r.t

land records management in India.


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3. Public Private Partnerships for Self Sustainability

3.1 Rationale for Public Private Partnership

This section explains the rationale for PPP and presents the various models which have been used by

countries around the world.

Governments decide on private sector participation with the following objectives:

To continuously bring technical and managerial expertise required with technological

developments in the external environment

To improve economic efficiency in the sector in both operating performance and the use of

capital investment. A major impetus here is on improved service delivery to the citizens.

To bring in large scale investment in the sector

To ensure self sustainability of the various Government initiatives in the long run

While private sector participation will help in improving technical and managerial capacity, it will be

effective, only if the Government chooses the appropriate model for operating the PPP and also

supplements it with regulatory mechanisms.

3.2 Types of PPP models

The various PPP models for land records management could be classified based on the nature of

responsibility held by the Government and by the private sector. In some cases, the Government

maintains full responsibility of operations, maintenance of the necessary infrastructure and service,

while in other cases the Government creates a framework wherein the private sector takes the full

responsibility including investments. However, in practice, these arrangements are hybrid in nature.

Allocation of responsibilities amongst the public and private sectors for the various options is provided

in the following table:

Table -1

Option Asset Ownership

Operations & Maintenance

Capital Investment

Commercial Risk

Contract Duration

Service Contract

Public Public &

Private

Public Public 1-2 years

Management Contract

Public Private Public Public 3-5 years

Lease Public Private Public Shared 8-15 years

Concession Public Private Private Private 25-30 years


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BOT/BOO Private & Public Private Private Private 20-30 years

Divestiture Private or Private & Public

Private Private Private Indefinite (may be limited by license)

A brief description of each of the PPP models listed above is presented here.

a. Service Contract

Government contracts out only specific tasks in the form of a Service Contract that mostly involves

availing technical expertise from the private sector partner. The period of service contract can range

from less than 1 to 2 years. The responsibilities of coordinating the tasks lie with the Government

managers, as does the responsibility of investments.

b. Management Contract

The Government transfers the responsibility of operation and maintenance of its operations to the

private sector through a Management Contract. The private sector is not involved in any capital

expenditure, which remains the responsibility of the Government. Such contracts are given out for a

typical period of 3-5 years and are most effective in situations where the Government’s main objective

is to rapidly enhance its technical capacity and its efficiency in performing specific tasks, or to prepare

for a greater private involvement.

c. Lease

Under the Lease arrangement, the private firm takes on the responsibility of operating and

maintaining the assets of the Government for a lease payment. Leases are entered into for a typical

period of 8-15 years. Under a lease, the Government and the private operator work closely, wherein

the Government must raise the finances and coordinate its investment program with the operator's

operational and commercial program.

d. Concession agreements

In a concession agreement, the private operator is not only responsible for operating and managing

the Government’s assets, but also for bringing in investments. However, the right to ownership and

use of the assets still remains with the Government. After a specified time period of say 25-30 years,

the assets (including those created by the private operator) revert to the Government. They are

attractive when large investments are needed in any infrastructure sector.

e. Build Operate Transfer (BOT)

Under the BOT arrangement the private firm undertakes to build, operate, maintain and later on

transfer the asset to the Government. During the period of the contract, say for 20-30 years, the

Government will pay a fee to the private operator.


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f. Divestiture

Divestiture is an extended form of concession wherein the ownership of assets is also transferred to

the private operator. This involves a complete management buy-out or transfer of shares / assets. The

role of the Government is very limited and it takes up the task of regulation.

3.3 Opportunities for PPP in land records management There are many areas where involvement of private players is possible in land records management

as explained below:

First registration process (i.e., titling process)

Mapping & survey processes at the time of creation of cadastre

Individual property valuation (transaction based) or mass property valuation (systematic

valuation of groups of similar properties by use of standardized procedures)

Recording of land use

Providing technical services to the land records departments on an ongoing basis in areas

such as establishing, operating and maintaining:

o Data centers

o Disaster recovery sites

o Hardware, networks and other infrastructure of offices

Providing services to customers at service centers of the departments where the private

operator would provide services on behalf of the department, but under the general

supervision of departmental staff

Providing survey services to the customers. Private surveyors can be authorized by the

departments to carry out the survey & submit the plan documents to the department for

approval. These surveyors can be supervised through rules, regulations & audits.

Providing title insurance

Marketing & sales of geospatial datasets (framework data, reference data, etc.)

Vocational training & capacity building

3.4 Possible benefits of PPP in land records management The possible benefits of PPP modeling accruable to the area of land records management are

provided below:

a. Release of Capital - PPPs often allow the public sector to translate upfront capital expenditure into

a flow of ongoing service payments. This enables projects to proceed when the availability of public

capital is constrained (either by public spending caps or annual budgeting cycles), thus bringing

forward much needed investment.


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b. Faster implementation - The allocation of design and implementation responsibility to the private

sector, combined with payments linked to the availability of a service, provides significant incentives

for the private sector to deliver capital projects within shorter timeframes.

c. Reduced whole life costs - PPP projects which require operational and maintenance service

provisions provide the private sector with strong incentives to minimize costs over the whole life of a

project, something that is inherently difficult to achieve within the constraints of traditional public

sector budgeting.

d. Better risk allocation - A core principle of any PPP is the allocation of risk to the party best able to

manage it at the least cost. The aim is to optimize rather than maximize risk transfer, to ensure that

best value is achieved.

e. Better incentives to perform – The allocation of project risk should incentivize a private sector

contractor to improve its management and performance on any given project. Under most PPP

projects, full payment to the private sector contractor will only occur if the required service standards

are being met on an ongoing basis. Apart from this, PPP also provides more incentives to the private

partner for technological innovations, due to the threat of competition.

f. Improved quality of service - International experience suggests that the quality of service

achieved under a PPP is often better than that achieved by traditional procurement. This may reflect

the better integration of services with supporting assets, improved economies of scale, the

introduction of innovation in service delivery, or the performance incentives and penalties typically

included within a PPP contract.

g. Generation of additional revenues – The private sector may be able to generate additional

revenues from third parties, thereby reducing the cost of any public sector subvention required.

Additional revenue may be generated, for instance, through provision of value added services using

the GIS information.

h. Enhanced public management – By transferring responsibility for providing public services,

Government officials will act as regulators and will focus upon service planning and performance

monitoring instead of the management of the day to day delivery of public services. In addition, by

exposing public services to competition, PPPs enable the cost of public services to be benchmarked

against market standards to ensure that the very best value for money is being achieved.

3.5 Issues to be addressed in implementing PPP models Certain issues remain to be addressed, even with the obvious benefits of the PPP model of

operations. Key issues and questions that need to be addressed in this area are provided here.

Business model: Which business model to adopt?

Cost recovery: Time period over which capital investments are to be recovered – pricing

issues

Interoperability: Interoperability between the Government & the private organizations and the

resultant issues related to people, processes & technology


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Access to data: Need to maintain confidentiality of information

Standardization: Standardization to bring about uniformity in service delivery, when multiple

private players are involved

Public confidence: Public acceptance of the private players delivering the Government

services

Quality of services: What mechanism should be established to ensure service level

adherence & how rigid should it be?

Employee union issues: Most trade unions will be suspicious of any initiative that might

cause longstanding public sector jobs to be transferred to the private sector. What strategy to

be adopted in this respect to achieve end customer benefits?

3.6 Guidelines for successful PPP implementation Before a Government embarks on the PPP way to manage its services, they should answer a few

basic questions on the applicability of the PPP modeling route to their current operations. The

following diagram depicts three such basic questions to be answered for a successful PPP

implementation:

Once the Government is ready to embrace PPP as a model to conduct its operations, the following

broad guidelines should be followed during the process of design & implementation of a PPP model:

a. Ensuring open market access and competition: PPPs should neither impact negatively on the

operation of open markets nor on the clear and transparent rules of these markets. This issue is

particularly relevant with respect to tendering and selection procedures for private partners. While

regard must be given to ensuring that private parties are able to realize financial returns by

guaranteeing sufficient opportunity to generate revenues, this must be matched with a concern to

avoid the creation of non competitive or closed markets.


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b. Protecting the public’s interest: Any Government’s objective in developing control mechanisms

is foremost to protect the public’s interest. This manifests itself in many forms and will impact on

project design, scope and implementation. An effective framework of norms, quality and performance

standards together with effective monitoring and management systems can ensure that the underlying

objectives for adopting PPP are met. A degree of assurance should be obtained at the tender,

evaluation and contracting stages. Creation of independent consumer groups and associations acting

as “watchdogs” should be encouraged.

c. Selection of the most suitable PPP type: A detailed review of the costs and benefits of private

sector involvement versus public alternatives must be undertaken to ensure that a PPP enhances the

public benefit. The degree of private involvement needs to be carefully matched to the objectives and

needs of the project and the public. Appropriateness, cost, the ability to effectively implement and

manage should be the paramount considerations in selecting a PPP structure.

d. Success and constraint factors: The characteristics of projects, partners and implementation

arrangements will create a series of constraints. The Government and the strategic private partner

should ensure that there is full mutual appreciation of the risks that accompany the business activities

within the partnership and that the financial arrangements are sufficiently robust to carry those risks.

These must be fully recognized and integrated. A PPP must be regarded as an active partnership

requiring a degree of flexibility from each side. However, the extent of flexibility must also be clearly

defined to ensure that project boundaries are clearly known.

e. Sharing of revenues: The Government and the private partner should make clear arrangements

about respective benefits and any sharing of revenues. The arrangement must take full account of the

rules and guidance provided for Government budgetary systems.

f. Future requirements: PPPs are a developing concept and in some cases have required

substantial reforms to the legal and financial systems to make their application possible. This requires

possible actions to define the role of the public sector, institutional capacity building at all levels

including the allocation of qualified and motivated staff to specialized PPP units, reduction of market

risk through user-oriented strategic approaches and development of private sector investment

facilitation mechanisms. Additionally the ‘paying public’ i.e., the consumer must also be integrated and

given the power to influence PPP design and operation. This ‘bottom up’ influence is crucial to the

sustainability of the PPP approach and will require coordination with NGOs, consumer associations

and the public.


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4. Existing PPP Models in Land Records Management in India

So far, the option of PPP in land records management has been tried by very few States in India.

Even the most successful project in land records computerization – Bhoomi Project – does not use

PPP at its full scale. The initiatives of several other States in the computerization of land records

through PPP mode are still either in the conceptualization stage or under implementation stage. The

following sections present three case studies, which focus on the role of private sector in

modernization of land records management in respective States & extent of its participation.

a. Bhoomi - Karnataka

i. About the project: In 1991, the Government of India devised a program to computerize the land records across the

country. The objective was to make the system of records administration transparent and free from

manipulations as well as to increase the usefulness of data contained in these records. The State of

Karnataka, one of the larger States of India, also participated in this ambitious project. However, due

to various reasons, two of its initial attempts met with only limited success. Finally in its third attempt

in 2001-02, the state implemented a highly successful project, Bhoomi (‘Bhoomi’ means ‘Land’ in the

native Kannada language), to computerize land records in the entire State. Under the project, 20

million records of land ownership of 6.7 million farmers living in 27,000 villages in the State were

computerized. The new system has brought about a sea change in the way land records are

maintained and administered in the State. The system has not only simplified the process of record

keeping but has also provided many collateral benefits. The governance model is designed to make it

financially self-sustainable over the longer term.

ii. Extent of Private Participation: Capex: The project was implemented at an estimated cost of INR 25 Crores, incurred over a period of

10 years. This includes the cost of data entry done in 1991 & 1995-96, since this data was also used

as the basis for the current system. Out of the total cost, the Government of India provided INR 18.38

Crores while the State Government provided the balance project cost. Out of the total project cost,

the initial data entry, updating & printing costs amounted to INR 793.08 lakhs (32.5% of Capex). Data

entry was outsourced to private agencies due to the high volume of the land records involved. The

agencies were required to set up a temporary data entry center at the district offices. The State

Government provided the physical space for their operations, while the private agencies setup the

infrastructure themselves. In order to obtain their commitment in terms of the quality of the data

entered, the cost of correction of errors during data entry was agreed to be borne by the agency.

Opex: Two hundred and three (203) Bhoomi centers at the Taluka level are being operated by the

Government as of date (Dec, 2005), and are fully owned by the Government. Since the Government


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was unable to fund the project’s expansion to the hubli level (a level below the Taluka level and

consisting of a group of villages) and further down, the public-private partnership model has been

implemented in these areas. Private entrepreneurs set up & operate the Kiosk at hubli level with

access to the servers at the Taluka level (group of hublis). The Kiosks only issue RTCs (Right,

Tenancy & Crop) certificate printouts. They do not carryout any transaction services like mutations/

ownership transfers. All the costs associated with the kiosks (e.g., building rent, electricity, computer

hardware, stationery, consumables, salaries of staff, etc.) are borne by the private entrepreneur

himself. Presently there are 60 such kiosks run by the private entrepreneurs. The villagers pay the

third parties for obtaining the RTCs, under the supervision of the concerned Village Accountants. A

specified percentage of the fee received is remitted to the Government and the balance is retained by

the kiosk owner. Apart from the management of Kiosks at the hubli level, the whole facilities

management including the maintenance of the IT systems and the activity of updating of the crop

details, is outsourced to private sector.

During the year 2004-05, the approximate income & expenditure of Bhoomi Project were as follows:

Table 2: Statement of Income & Expenditure

Item Description Amount (INR lakhs)

A. Income: Sale of Rights & Tenancy Certificates

1900

B. Expenses

Facilities Management (Outsourced) 470

Crop Details Updation (Outsourced) 250

Other costs 280

Total expenses 1,000

Surplus 900

As can be seen in the above table, the contribution of outsourced activities in the total cost now

stands at 72%.

The Government is now planning to involve private entrepreneurs to set up kiosks in the remote

corners of the State. Bhoomi is a trendsetter for e-Governance projects in the State as well as other

parts of the country.


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b. Integrated Land Information System (ILIS) – Andhra Pradesh i. About the project: Of the most recent initiatives taken up by various state governments in India in the realm of land

records management, ILIS clearly stands apart as a revolutionary project with extremely challenging

goals. The purpose of ILIS is to establish and manage a comprehensive and sustainable Land

Information Management System, which serves as a record of conclusive Title of all land parcels. It

also envisages providing all property related services in an integrated, efficient and cost effective

manner. The project implementation involves mammoth exercise of complete resurvey, fool-proof

titling, legal changes and establishment of delivery channels to render property related services to

citizens under one roof. It also necessitates reorganization of functions & services of existing

Government bodies offering property related services (e.g., Registration Department, Revenue

Department, Local Bodies, Survey & Land Records Departments)

The detailed conceptual model of ILIS (including its organization structure, functions, services, internal

processes, delivery channels, capacity building requirements, IT systems, etc.) has already been

finalized. Aerial survey of the pilot district has also been started as of December 2005. The State

Government is now in the process of selecting a private partner (Implementation Agency) on a PPP

basis to design, develop, implement & maintain ILIS.

ii. Extent of Private Participation: The following are the roles and responsibilities of the

Implementation Agency that will be selected for the execution of the ILIS:

a. Creation of the Digital Survey Fabric and the Title database.

b. Digitization and migration of the existing records to ILIS database

c. Processing of Ortho-Photographs given by National Remote Sensing Agency (NRSA) to create

the village maps

d. Preparing the field re-survey estimate & conducting the field re-survey

e. Preparing the final cadastral maps

f. Assisting the Government during the title verification exercise

g. Design, development, testing and installation of a secure, scalable Application Software system

h. Procurement of the hardware and software for all the service centers of ILIS and the data center

for ILIS at the specified locations (Hyderabad and Nizamabad) for hosting the ILIS application and

database.

i. Establishing the network for the connectivity between the ILIS Service Centers and the Data

Centers.

j. Migration of the legacy paper documents and databases to the new system.

k. Setting up of required infrastructure for Digital Signature/Public Key Infrastructure

l. Setting up of Disaster Recovery Centers

m. Roll-out of the systems in all locations in the pilot district.


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n. Providing user training at all levels and preparing supporting documentation such as User

Manuals, Maintenance Manuals, etc.

o. Ensuring that the performance is in conformity with the Service Level Agreement.

p. Providing standards-based documentation on all aspects related to the project.

q. Providing ongoing maintenance support, upgrades and enhancements to the systems.

Apart from the implementation partner with the wide ranging responsibilities mentioned above, ILIS

also envisages other categories of private players in the post implementation phase. They are,

a. Information service providers (Class I) licensed by ILIS to provide information search services

(e.g., title search, transaction history search, document search, etc.)

b. Information service providers (Class II) licensed by ILIS to accept applications in respect of

transactional services (e.g., title transfer, mortgage, etc.)

c. Private Surveyors licensed by ILIS to perform sub-division of properties and submit revised

parcel maps to ILIS office for approval. They can also offer other services to users like,

demarcation of boundaries, planting of field stones, etc.

Though ILIS is still in a very nascent stage of implementation, it is the first project in the country to

provide a much greater role to the private sector in land records management.

c. Statewide Rollout of Computerized Registration & Land Records Systems – Punjab

i. About the project: Another State which is moving towards a statewide rollout of its computerized land records &

registration systems through a PPP mode is Punjab. With the positive response received from the

public for the pilot implementations, Government of Punjab decided in April 2005 that the

computerized registration & land records systems will be rolled out in 153 locations in the State. For

this purpose, the Government has opted for the PPP mode & presently, is in process of selecting the

private partner.

ii. Extent of Private Participation: As per the proposed arrangement, the Government would provide ready site (including civil work, air

conditioning, power and data cabling) with core applications (land records software & registration

software), software licenses for server operating systems, database licenses and any other special

software licenses required to operate the said applications. The scope of work for the Private Partner

on Build-Own-Operate-Transfer Model is as follows:

a. Supply, install and commission servers, switches and routers on upfront payment basis.

b. Supply install and commission desktop PCs, printer, UPS, generator, CD cabinets etc. on service

charge basis.

c. Deployment of requisite resources.


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d. Providing general facility /infrastructural / environmental support systems, safety and security

measures in Citizen Service Centers.

e. Appropriate replacement and /or replenishment of systems

f. Data digitization

g. Operations & maintenance of hardware & software, equipments, network etc.

h. Facility Management including management of infrastructure, utilities (like electricity, telephone

etc.), ensuring safety and security of equipment of resources and data etc.

i. Installation of current & future upgraded versions of Land Records and Registration applications

and configuration, initialization & master data entry as & when required.

j. Data migration & porting at all stages.

k. Ensure data security, maintenance, management, backup, archival, retrieval & recovery.

l. Providing services at CSCs

m. Back-office operations like generation of MIS reports etc.

n. Training and assistance to respective officials for using the application at front desk counter

machines.

d. Computerization of Registration Department of Maharastra – SARITA Project

i. About the project: India follows deed registration system and the ‘Department of Registration’ at

state level is entrusted with the responsibility of registering the property transactions. The Department

of Stamps & Registration of Maharastra (one of the large states of India) is the second highest

revenue generating department for the Government of Maharashtra. However, the department had a

poor image due to very poor client satisfaction. This can be attributed to the fact that the Sub-

Registrar (head of lowest level office in the department hierarchy) enjoyed great discretion vis-a-vis

registering the document, ascertaining value of the property and the time frame of returning the

original document to the party. The other major lacunae were non-uniform, often faulty, processes

with no time standards. As a result, the registration of land or property transaction took weeks and the

original document could not be returned for months/ years. The system bred inordinate delays,

harassment and corruption leaving a very bad aftertaste for all those who had to come to the Sub-

Registrar Offices for deed registrations.

The turnaround process within the Department started with the process changes followed by

computerization project named SARITA. The department looked at impending computerization as an

excuse for full review of its processes and functioning and to make bold changes, wherever

necessary, to provide world-class public service & better client satisfaction.

ii. Extent of Private Participation:

To address the burden of capital costs of statewide rollout & host of other public sector issues, the

Government teamed up with private sector. The concept was to bring in a private partner who would


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install, operate and maintain the hardware across all offices and recover his investments from service

fees charged to the client in return of top class services being provided. The roles of both the private

partner and the department personnel were clearly spelt out. The major terms and conditions

contracted by the state with the PPP vendor were:

Provide for all the hardware and peripherals required to meet the desired service standards

Deploy all hardware to various locations, ensure installation & commissioning of the setup

Maintain the hardware regularly up-to predetermined standards

Provide anti-virus kits

Keep the set up at all locations functional and operational

Install all requisite software at various locations and provide for software up-gradation,

whenever necessary (registration software was provided by the government)

Provide furniture as per standard design and layout

Maintain buffer stock for meeting emergencies and to provide consumables as per

requirement.

Provide manpower at the front end that will handle:

o Data entry

o Scanning the original registered document.

o Archiving on CDs at regular intervals

o Other related activities such as capturing thumbprints with thumbprint scanner, digital

signature, photographs of parties with web (computer-attached) cameras etc.

The agreement with the vendor included maintenance standards (e.g., 95% uptime), upgradation

standards (e.g., latest versions of software), service level standards (e.g., 25 minutes for service

completion), penalties (e.g., encashment of bank guarantee) and incentives (financial).

Project SARITA, which became fully operational across the state by May 2002, turned out to be a

highly successful one and is recognized as one of the 3 best eGovernance projects of India that can

be replicated across the country.

5. International Trends

In this section a few relevant and successful case studies are presented to bring out the essence of

the private partnership mode in public operations in countries other than India. The critical elements

from these studies may be considered as way forward in the Indian scenario, giving due consideration

to the local environment and Government framework, as they exist in India.


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Case Study 1: Land Registry of England & Wales a. Background: The property market in England and Wales is a very active one, with approximately

£1million worth of property transactions processed every minute. As the government department

responsible for maintaining records of land ownership, Land Registry guarantees the title for £2.5 trillion worth of property. Established in 1862 and self-financing by law, Land Registry receives no

public funds, covering its costs solely through fees.

b. The Challenge: For many years, the staff in local offices used terminals to access information in

the mainframe database to provide services to local constituents. In the late ‘90s, Land Registry

developed a powerful new electronic mapping application that would significantly improve service and

efficiencies, but which required a robust distributed IT infrastructure. The challenge was to move from

6,500 dumb terminals to a network of PCs, clustered servers & LANs. In addition, Land Registry

wanted to complete the first phase of the project quickly, installing the first 2,500 PCs with servers and

LANs in all 24 offices—and integrating them with the centralized systems, all within 6 to 8 months.

c. Action plan: Land Registry’s IT Services staff was very knowledgeable and successful in

developing and managing the mainframe systems, database, and applications at the heart of the

business. Rather than dilute that focus and embark upon extensive hiring and training, Land Registry

sought a partner with distributed IT capabilities to mirror its centralized IT expertise.

After an extensive 18-month tendering and evaluation process (1998-99), Land Registry awarded

Hewlett Packard (HP) ten-year contract for ₤71 million to act as its strategic IT partner in a UK

Government Public Private Partnership. In addition to immediate objectives, Land Registry wanted

HP to be a strategic partner, who could work with them over the long term to evolve the infrastructure

required to support future e-business initiatives.

d. Current scenario: Today, HP, the strategic IT partner of Land Registry,

– Designs, builds, supplies, operates, supports, maintains, finances, and upgrades/refreshes

the entire distributed hardware, software, and network infrastructure, including: Microsoft

Exchange and Office XP applications; corporate intranet; 9,500 desktop systems; 2,000

printers; 200 clustered servers; and an end-to-end, fully redundant LAN/WAN infrastructure.

– Manages every aspect of the infrastructure, including products and services from such

vendors as Microsoft, Cisco, Cable and Wireless, and BT.

– Underwrites the entire infrastructure, and provides it to Land Registry at a fixed, per-seat

price.

HP consultants and solution architects, using proven ITSM methods, developed the security

architecture, enabling Web access to Land Registry systems, and are now developing a single IT

architecture to integrate Land Registry’s centralized and distributed infrastructures.


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e. Benefits: Due in part to dropping mortgage interest rates, each of the last three years has been a

“record year” in the number of transactions handled by Land Registry. However, the per unit

transaction costs have steadily dropped. As noted in its most recently published Annual Report, Land

Registry has been able to achieve or exceed all its key performance targets, despite receiving 20%

more work; outstanding casework is at its lowest in 25 years; and more than 98% of its customers

report being either very satisfied or satisfied with the full range of Land Registry services. As a

government entity, Land Registry must be agile enough to respond quickly to changes in the law, as

well as to changes in technology and customer expectations. Recently, Land Registry successfully

met the demands of new legislation that completely replaced the statutory framework for land

registration in place since 1925.

A core HP Services team of 18 people works alongside Registry’s IT Services staff based in

Plymouth, calling on the full range of HP resources, as well as provisioning and managing solutions

from multiple providers to meet changing Registry needs.

To sum up, benefits to Land Registry include,

– More valuable and convenient services offered to a larger constituency, at a lower cost per

transaction

– Agreed upon service levels at a predictable cost, with a single point of management

accountability

– Centralized and distributed IT infrastructures evolve in tandem to support new Web services

and e-government initiatives, providing greater agility while continuing to cut costs

Case Study 2: Turkish Land Registry and Cadastre (LRC) Turkish Land Registry and Cadastre (LRC) belongs to the Ministry of Building and Public Works. LRC

started its legal cadastre works in 1923, with the aim of forming title registers defined in Turkish Civil

Law. In this context, this organization has undertaken the duty of defining the geometrical and legal

situations of properties in the boundary of Turkey. Until 1980’s, cadastral works have been in

monopoly of the State and carried on solely by the LRC, even though the related period cadastre law

provided for technical surveys to be done by the private sector with the approval of Government.

Since mid 1980s, LRC had tendered the triangulation works of about eight districts to private sector.

Besides, in some of these districts, cadastral surveys and mapping of properties have also been done

by private sector. With this application, the period of public-private partnership started in cadastral

works in Turkey.

In recent years, a project named Turkish Land Information System (TAKBIS) has been started as a

pilot application. This project has been done by private sector in the control of the LRC. In this project,


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the responsibility of the private sector includes analysis, design & development of software and

provision of training to staff.

Summary

A study was conducted by the United Nations Economic Commission for Europe (UNECE) in the year

2003, amongst the member countries to assess the use of PPP amongst land administration

authorities in the UNECE region. Questionnaires were sent to 43 UNECE countries and 7 Canadian

provinces. Of the 26 responses, 6 countries (representing 23% of the total number of replies)

indicated that they have no PPP arrangements. Of the 20 countries/ provinces indicating that they

have some form of PPP arrangements:

60% indicated that their governments have introduced policies to support PPP

80% indicated that their land administration authorities have entered into PPP arrangements

80% indicated that PPP arrangements had been made through a formal tendering process

95% have contracts in place governing PPP arrangements

In respect of the perceived benefits of PPP, majority of respondents cited improved service

delivery and reduced costs.

Following Table 3 presents a snap-shot of the extent of participation of the private sector in various

cadastral processes in the member countries of the European Union.

Table 3: The Role of Private and Public Sector in Cadastral Stages in the EU Countries


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6. Conclusion

Land administration activities lie at the heart of good governance and land administration represents a

key area of public responsibilities and actions. With proper safeguards and good management, it is

possible for some specific activities to be transferred to the private sector under appropriate PPP

arrangements. The extent of private sector involvement in land records management in India needs

to be carefully considered in order to find a reasonable and harmonious balance. Within the legal

requirements, the land registry, cadastral and other organizations concerned with land administration

should seek partnerships with the private sector to facilitate accurate, fast, inexpensive and customer

friendly access to land information and its usage. By sharing resources and knowledge, both parties

profit from synergies, shared risk and technological developments, which otherwise would not take

place. The sharing arrangement also allows for good practice in “equal opportunity” matters to be

taken forward. The successful application of PPP in land records management requires new attitudes

and skills when such partnerships are in the public interest.

To sum up, the liability and guarantee of the State for the contents of the land records should remain

unaffected. In addition, the provision of an infrastructure for land administration, including the

development of the legal framework, standards and information exchange procedures, should remain

government responsibilities. Private sector participation should be encouraged in operational

activities like service delivery, performing back-office functions, maintenance of infrastructure, etc.

Land administration activities are dynamic and PPP offer greater flexibility in the management of

change than a single-purpose organization or agency could provide.

7. Reference Material

In preparation of this paper on ‘Cost recovery policies, PPPs and sustainability of land records

management in India’, the following discussion papers, reports, articles, etc. have been extensively

used.

PwC India Reports prepared as a part of ‘Program for Roll out of Successful E-Governance

Projects in India’ and other PwC sources on land records.

Rajeev Chawla, PwC, Wipro & ICICI Infotech (2003), Rollout of successful e-Governance

projects, Bhoomi – A Case Study

PwC, Wipro & ICICI Infotech (2003), Rollout of successful e-Governance projects, Sarita – A

Case Study

PwC India (2005) ‘Business Model for Integrated Land Information system for the State of Andhra

Pradesh’

Peter Creuzer (2002), Land Administration In Public Private Partnerships. Paper presented in the

workshop on Customers – Co-operation – Services, Vienna

European Commission (2003), Guidelines for Successful Public Private Partnership.


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Case Study – Land Registry maps a course to e-Government in the UK – HP success story.

Paper prepared by the Working Party on Land Administration (2005), United Nations Economic

Commission For Europe – Guiding Principles for Public Private Partnerships (PPP) in Land

Administration

Discussion paper prepared by P. Creuzer, J. Valis, F. de la Puente, B. Kjellson and A. Overchuk

on the topic Public-Private Partnership and Providing Open Access to Land Information for the

second session of the Working Party on Land Administration (2001), United Nations Economic

Commission For Europe

M. Mostafa Radwan, M. Hesham Nasr, Christiaan Lemmen & Sohir Hussein (2005). Presentation

made at FIG/GSDI 8 Working Week 2005, Cairo, Egypt on The Egyptian Survey Authority

Business Model to Strengthen Public Private Partnership in the Real Estate Industry

Discussion paper prepared by P. Creuzer and B. Kjellson on the topic Public-Private Partnership

in Land Administration for the fourth session of the Working Party on Land Administration (2005),

United Nations Economic Commission For Europe

Ayse Yavuz and Cemal Biyik (2004). Paper presented at FIG Working Week 2004 on Public-

Private Partnership in Cadastre: The Case of Turkey and the EU Countries

Jurg Kaufmann and Daniel Steudler with Working Group 7.1 of FIG Commission 7 (1998),

Cadastre 2014 - A Vision for a Future Cadastral System

Dr.N.Saxena (2004), Institutional Framework for Land Administration in India: Issues and

Challenges

pwc paper on ppp for wb workshop-v1.5

Documents