Reading Comprehension_passage On Infrastructure

5 Questions | Total Attempts: 59

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Reading Comprehension_passage On Infrastructure - Quiz

Questions and Answers
  • 1. 
    Directions (Q. 1 – 3): The passage given below is followed by a set of five questions. Choose the most appropriate answer to each question. Infrastructure can deliver major benefits in economic growth, poverty alleviation, and environmental sustainability but only when it provides services that respond to effective demand and does so efficiently. Service is the goal and the measure of development in infrastructure. Major investments have been made in infrastructure stocks, but in too many developing countries these assets are not generating the quantity or the quality of services as demanded. The costs of this waste-in foregone economic growth and lost opportunities for poverty reduction and environmental improvement-are high and unacceptable. The causes of the past poor performance, and the source of improved performance, lie in the incentives facing providers. To ensure efficient, responsive delivery of infrastructure services, incentives need to be changed through the application of three instruments-commercial management, competition and stakeholder involvement. The roles of government and the private sector must be transformed as well. Technological innovations and experiments with alternative ways of providing infrastructure indicate the following principles for reform: manage infrastructure like business, not a bureaucracy. The provision of infrastructure needs to be conceived and run as a service industry that responds to customer demand. Poor performers typically have a confusion of objectives, little financial autonomy or financial discipline, and no ‘bottom line’ measured by the customer satisfaction. The high willingness to pay for most infrastructure services,even by the poor, provides greater opportunity for user charges. Private sector involvement in management, financing or ownership will in most cases be needed to ensure a commercial orientation in infrastructure. Introduce competition-directly if feasible, indirectly if not. Competition gives consumers choice for better meeting their demands and puts pressure on suppliers to be efficient and accountable to users. Competition can be introduced directly, by liberalising entry into activities that have no technological barriers, and indirectly, through competitive biding for the right to provide exclusive service where natural monopoly conditions exits and by liberalising the supply of service substitutes. Give user and other stakeholders a strong voice and real responsibility where infrastructure activities involve important external effects, for good or bad or where market discipline is insufficient to ensure accountability to users and other affected groups, governments need to address their concerns through other means. Users and other stakeholders should be represented in the planning and regulation of infrastructure service. In some cases, they should take major initiatives in design, operation and financing. Public-private partnerships in financing have promise. Private sector involvement in the financing of new capacity is growing. The lessons of this experience are that the governments should start with simpler projects and gain experience, investors returns should be linked to project performance, and any government guarantees if needed should be carefully scrutinised. Governments will have a continuing, if changed, role in infrastructure. In addition to taking steps to improve the performance of infrastructure provision under their direct control, governments are responsible for creating policy and regulatory frameworks that safeguard the interests of the poor, improve environmental conditions, and coordinate cross-sectoral interactions-whether services are produced by public or private providers. Government is also responsible for developing legal and regulatory framework to support private involvement in the provision of infrastructure services. Question: The measure of development in infrastructure is
    • A. 

      The quantum of investment

    • B. 

      The investment in infrastructure stocks

    • C. 

      The level of service delivered by the infrastructure

    • D. 

      The utilisation of the existing infrastructure

  • 2. 
    Directions : The passage given below is followed by a set of five questions. Choose the most appropriate answer to each question. Infrastructure can deliver major benefits in economic growth, poverty alleviation, and environmental sustainability but only when it provides services that respond to effective demand and does so efficiently. Service is the goal and the measure of development in infrastructure. Major investments have been made in infrastructure stocks, but in too many developing countries these assets are not generating the quantity or the quality of services as demanded. The costs of this waste-in foregone economic growth and lost opportunities for poverty reduction and environmental improvement-are high and unacceptable. The causes of the past poor performance, and the source of improved performance, lie in the incentives facing providers. To ensure efficient, responsive delivery of infrastructure services, incentives need to be changed through the application of three instruments-commercial management, competition and stakeholder involvement. The roles of government and the private sector must be transformed as well. Technological innovations and experiments with alternative ways of providing infrastructure indicate the following principles for reform: manage infrastructure like business, not a bureaucracy. The provision of infrastructure needs to be conceived and run as a service industry that responds to customer demand. Poor performers typically have a confusion of objectives, little financial autonomy or financial discipline, and no ‘bottom line’ measured by the customer satisfaction. The high willingness to pay for most infrastructure services,even by the poor, provides greater opportunity for user charges. Private sector involvement in management, financing or ownership will in most cases be needed to ensure a commercial orientation in infrastructure. Introduce competition-directly if feasible, indirectly if not. Competition gives consumers choice for better meeting their demands and puts pressure on suppliers to be efficient and accountable to users. Competition can be introduced directly, by liberalising entry into activities that have no technological barriers, and indirectly, through competitive biding for the right to provide exclusive service where natural monopoly conditions exits and by liberalising the supply of service substitutes. Give user and other stakeholders a strong voice and real responsibility where infrastructure activities involve important external effects, for good or bad or where market discipline is insufficient to ensure accountability to users and other affected groups, governments need to address their concerns through other means. Users and other stakeholders should be represented in the planning and regulation of infrastructure service. In some cases, they should take major initiatives in design, operation and financing. Public-private partnerships in financing have promise. Private sector involvement in the financing of new capacity is growing. The lessons of this experience are that the governments should start with simpler projects and gain experience, investors returns should be linked to project performance, and any government guarantees if needed should be carefully scrutinised. Governments will have a continuing, if changed, role in infrastructure. In addition to taking steps to improve the performance of infrastructure provision under their direct control, governments are responsible for creating policy and regulatory frameworks that safeguard the interests of the poor, improve environmental conditions, and coordinate cross-sectoral interactions-whether services are produced by public or private providers. Government is also responsible for developing legal and regulatory framework to support private involvement in the provision of infrastructure services. According to the passage, the primary cause for the poor performance in infrastructure services is
    • A. 

      A confusion of objectives

    • B. 

      Prevalence of monopoly conditions

    • C. 

      The incentive structure

    • D. 

      Inadequate government involvement

  • 3. 
    Poor management of infrastructure is characterised by Confused objectives Financial indiscipline No orientation towards customer satisfaction
    • A. 

      1 and 2

    • B. 

      1 and 2

    • C. 

      2 and 3

    • D. 

      1, 2 and 3

  • 4. 
    Which of the following is true according to the passage?
    • A. 

      Government’s role must be minimised in the provision of infrastructure services

    • B. 

      Users and other stakeholders must be represented adequately in the planning and regulation of infrastructure services

    • C. 

      Users and willing to pay even if services are poor

    • D. 

      Private sector involvement in infrastructure services is not necessary

  • 5. 
    The passage suggests all of the following except that
    • A. 

      The competition increase consumer choice and increases the accountability of service providers

    • B. 

      The government must encourage private sector investment by providing guarantees

    • C. 

      The investor returns ought to be linked to project performance

    • D. 

      When infrastructure activities have important external effects, users must have strong voice

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