Public-Private Partnerships and Contract Choice in India's Water and Wastewater Sector

Public Works Management & Policy, 26(1), 71-96, 2016

36 Pages Posted: 20 Apr 2014 Last revised: 31 May 2017

See all articles by Sridhar Vedachalam

Sridhar Vedachalam

Environmental Policy Innovation Center

Rick Geddes

Cornell University - Department of Policy Analysis & Management (PAM)

Susan Riha

Cornell University

Date Written: Jan 2, 2016

Abstract

Public provision of water and wastewater services in urban India has been a noteworthy failure. Open defecation, mixing of untreated wastewater with stormwater and drinking water supplies, and unreliable water services have added up to a severe health and economic crisis. Recent government measures such as the National Urban Sanitation Policy (NUSP) and a draft guideline on allowing Public-Private Partnerships are policy improvements. The success of privatization in extending coverage and health benefits across Asia, Africa and Latin America, coupled with moderate success in efficiency gains has led to widespread use of Public-Private Partnerships (PPPs) in the Indian water and wastewater sector. We analyze 163 water and wastewater PPP contracts over 14 years to identify drivers of a city’s decision to employ more (or less) private participation in a PPP agreement. Cities with larger populations, better PPP regulatory environments, regional party rule and lower sanitation scores accepted greater levels of private participation through PPP contracts. While post-award governance of PPPs remains a major challenge, understanding decision-making by the city administration and private investors allows planners to channel public and private funds to the right projects.

Keywords: Public-private partnerships, water, sanitation, India, JNNURM

JEL Classification: L95, L33, H54

Suggested Citation

Vedachalam, Sridhar and Geddes, Rick and Riha, Susan, Public-Private Partnerships and Contract Choice in India's Water and Wastewater Sector (Jan 2, 2016). Public Works Management & Policy, 26(1), 71-96, 2016. Available at SSRN: https://ssrn.com/abstract=2426629 or http://dx.doi.org/10.2139/ssrn.2426629

Sridhar Vedachalam (Contact Author)

Environmental Policy Innovation Center

777 6th St NW
Washington, DC 20001
United States

Rick Geddes

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States

Susan Riha

Cornell University ( email )

Ithaca, NY 14853
United States

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