Private Partnerships are now commonly used to accelerate economic growth, improve development and infrastructure delivery, support better integration of services, strengthen governance and quality levels, and also maximise innovation opportunities. Given the changing economic, social and political environment, coupled with globalization and budgetary constraints, PPP has now become a desirable mainstream option for many countries worldwide.
Government of India is committed to improving the level and the quality of economic and social infrastructure services across the country. In pursuance of this goal, the Government envisages a substantive role for Public Private Partnership as a means for harnessing private sector investment and operational efficiencies in the provision of public assets and services.
These schemes are sometimes referred to as PPP, or P3. The Government of India defines it as: “Public Private Partnership (PPP) Project means a project based on a contract or concession agreement, between a Government or statutory entity on the one side and a private sector company on the other side, for delivering an infrastructure service on payment of user charges.”
Public-Private Partnership offers many potential advantages for the Government in providing essential public services facilities. Recently, the Department of Economic Affairs under the Ministry of Finance, Government of India has been heavily involved in PPP research. The Government of India has an innovative program called “PPP capacity building programme”, which developed a toolkit to assist decision-making for infrastructure in India and to improve the quality of on-going PPP projects. The Toolkit was designed with a focus on helping decision-making across India at the Central, State and Municipal levels.
The Government has supported the creation of nodal agencies such as the PPP Cells at a State or sector level which would be strengthened with appropriate resources and skilled manpower to identify, conceptualize and create a shelf of projects and recommend approval of suitable projects for implementation on PPP route.
Prime Minister Manmohan Singh was among the world leaders who attended the two-day summit in the Russian city of St.Petersburg. Where he committed to continue with its ambitious infrastructural programme, including the Delhi-Mumbai Industrial Corridor connecting the national capital and the commercial capital with high speed rail and road links entailing nearly 100 billion USD in investment.
In addition, two new major ports will be established and a new outer harbor will be developed in an existing port through PPP starting 2013-14," Giving a push to infrastructure development, the Union government recently approved a proposal to set up two major ports in West Bengal and Andhra Pradesh at an investment of about Rs 15,820 crore. The move to set up new ports comes after several years. The new major ports are likely to be set up on public-private partnership (PPP) mode, and will cater to increased imports of coal and oil besides boosting the local economy and generating jobs.
The prime minister highlighted the need for ramping up investment in infrastructure to revive investor sentiment. “For this purpose, a target of rolling out PPP projects was set. A steering group is being formed to monitor the award and implementation of projects on priority basis,” Planning Commission deputy chairman Montek Singh Ahluwalia, seen as the strongest proponent of public private partnership (PPP) projects, has admitted to "problems" but ruled out scrapping the model .
Instead, he has started discussions on how the mechanism can be made to work better amid strong public criticism, which he acknowledges can be "legitimate" Rahul Gandhi, has called for "inclusive" growth and said India was "bursting with dreams and ideas" and "embracing the excluded" was crucial to nation building, he said "It's our duty to provide India with an infrastructure that connects our villages and cities and the rest of the world," he said and talked about a public-private partnership as being critical to the country's growth.
The foreign multinationals have equity participation in PPP projects, where contracts have already been awarded and projects are underway. Malaysian companies are leading investors in public private partnership projects in India, followed by the Apollo Enterprises United Kingdom, Mauritius, France, Germany, United Arab Emirates and Philippines, United States, Mauritius-based ACSA Global and Switzerland have an equity stake in the modernization of Mumbai international airport and Delhi international airports, Delhi-Noida toll bridge, Pipavav port, Bangalore international airports, JNPT container terminal, lucknow-Sitapur road project and Raipur Durg expressway, Delhi Gurgaon Expressway project, Vadodara Halol Toll Road project, Gangavaram Port project, Timarpur Integrated solid waste management project, latur Water Supply project, Hyderabad Metro project, Mumbai Metro, Alandur Sewerage Project, Karnataka Urban Water Supply Improvement project, Amritsar Inter-state Bus Terminal project, Salt lake water supply and sewerage network project, and many more where these big giants participate in financing, designing, construction and operation & maintenance of public sector programmes and projects.
India has witnessed an absolute metamorphosis over the last decade. Sprawling cities, flourishing businesses, higher standard of living are all indicators of unprecedented growth, globalization, urbanization, expansion and diversification. Infrastructure modernization and development is said to be the key driver of all the growth and economic activity.
The public sectors alone can’t meet the required funds and technology for the projects. So, the Government decided to accomplish this business by collaborating with the sector which could provide this requirement which was none other than the private parties. Thus, PPP emerged as a joint collaboration of the public and private sectors.
The Indian infrastructure sector is at an inflection point and there are immense opportunities for the private sector. The PPP has come in to existence from over a decade but it has shown remarkable results in past 5-6 years. Almost every sector is covered where PPP needs to be implemented. Many foreign companies also show their interests but their participation is not much as the domestic private companies. The sectors covered in this research are health, education, power and transport.
Indian infrastructure growth has reached massive heights. Most PPPs have been restricted to the roads sector. And the sector still has lot of scope and the measures are taken also by the PPPs to achieve it. Ambitious project plans have been developed for various transport sectors to bridge the infrastructure gap. The sectors are booming but there are hindrances and constraints persist threatening to slow down growth in the smooth development of world-class infrastructure.
This is because the private sectors which are involved in the PPPs have the prime motive of profit making rather than doing any social work. The companies which have the close contact with political parties can also take up a project with a view of making lot of profits. If the project reaches in the wrong hands that are if the tender is passed to a wrong person he may severely cause problems.
But the Government is controlling all these constraints to have successful examples in PPP and heading towards the economic development of the country. It has taken various steps to accomplish the projects successful. Various State Governments such as Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Maharashtra, Orissa, Rajasthan and West Bengal, have adopted PPP policies and many of them have put in place the necessary institutional mechanisms for the promotion of PPP.