Financing Sustainable Infrastructure - Assessing the Risks in Public Private Partnership Models

Abstract

Traditionally, governments have had the major responsibility of managing the process of infrastructure provision, especially financing. But of late governments across the globe are not in a position to build the required infrastructure, maintain existing assets and to replace worn-out assets owing to the the rapid rise in construction cost, changing economic conditions, tax and expenditure limitations, governments' budgetary constraints, sectoral reforms, changes in priorities, and globalization of financial markets. So, the traditional role of public sector infrastructure development is undergoing major change as governments in developing countries seek to bring private sector investment into infrastructure services. This article examines the main models of PPP (Public Private Partnership), employed all over the world as well in India, ranging from contractual schemes which provide for a marginal involvement of the private sector, to complex forms of PPP implying a greater allocation of risk and responsibility to the private party. Key words: Public Private Partnership, Risk, Models, Financing PPPs.

Keywords: Public Private Partnership, Risk, Models, Financing PPPs

JEL Classification: M10, N65, P10