Public Private Partnerships: The Indian & International Experience
19 Pages Posted: 26 Apr 2014
Date Written: April 4, 2014
Abstract
The agenda is as follows. We begin with why PPPs are relevant to you, why are you here today at all. PPPs are a complex phenomenon, so our next step is to understand what PPP is all about, is it just a fad, or a useful policy option? This leads us to understand PPPs from two perspectives, first from the point of view of a practitioner; then from the viewpoint of a scholar. We then look at the benefits & advantages of PPPs, as well as its problems. One major aspect in PPP implementation is risk management, so we devote some time to it. Finally, we gather up our learning and try to apply these to design a PPP, and some underlying principles of a successful PPP execution. In the course of my research, I uncovered over a hundred different definitions of a PPP. It is multifaceted, so different scholars and practitioners describe it differently. What I would say is relevant to people like us is to understand PPPs not definitionally but as an entity with a set of distinct characteristics that recur in all or most partnerships. PPPs essentially involve two or more partners, drawn from both the public and the private sectors. They are whole of life cycle arrangments, i.e, they usually involve construction, management and operations, and even maintenance at times. This is very different from the conventional procurement in governments, where a product is either purchased, or a job work is “commissioned” for a fixed fee. Very largely, PPPs are employed in the provisioning and delivery of public goods, things like water, roads, brdiges and so on. The relationship between the private and the public partner is regulated through a contract, which is long-term, running at times for 25 years or more. The reason for this is the whole of life cycle we spoke of, if the contract is to cover both construction and maintenance, then we need to have a long term contract. Over time, loose associations between non-profts and governments have also been termed PPPs, in sectors such as health and education. But the classic PPP is in the business of infrastructure provisions, and uses specific mechanisms like BUNDLING, LIMITED or NON-RECOURSE FINANCING, a SPECIAL PURPOSE VEHICLE and so on.
Keywords: Public Private Partnerships, Infrastructure, Mega-projects, PPPs, India, Partnerships
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