PPP model for infra push

Mohan Murti
Comment (2)   ·   print   ·  
Public and private sector need to share responsibility and risks. — K. Pichumani
Public and private sector need to share responsibility and risks. — K. Pichumani

India must give infrastructure development the highest national priority, bringing together the Central and State governments, along with public and private players, in a common endeavour, as I have reiterated often in this column.

World-class infrastructure is required to provide the trajectory to rapid, consistent growth and, for India to become a leading economic power. For this to happen, a single-minded sense of purpose and daring political leadership dedicated to achieving the goal are a must

In this context, Europe has brought together the advantages of public-private partnerships (PPPs) in a unique cooperation between the public and private sectors involving extensive relationships, joint risk-taking and major investment.

Many of these projects involve the construction of water and municipal sanitation systems, hospitals, roads, bridges, tunnels, railways and marinas.

A shared goal

Public and private sector in Europe no longer view themselves as conflicting parties but, on the contrary, participate and assume responsibility, share risks and simultaneously develop services in the best interests of the citizens.

There are clear and common rules within the EU that facilitate the free movement of goods, services and even bidding for PPP projects. EU and the individual member States also have common rules that ensure transparency and counteract corruption.

After all, transparency concerning how public affairs are managed is a cornerstone of democracy.

Between 2007 and 2011, the European Union has invested around €500 billion in infrastructure projects, within Europe.

In some countries, these investments account for around 4 to 5 per cent of GDP. PPP-initiated projects are the largest investment programmes in Europe since the Second World War. Therefore there are strong expectations that these projects will create an economic boost that will stimulate growth — even during the current economic turmoil.

Culture of efficiency

Europe’s PPPs not only cover infrastructure but also provide for a wide range of sectors, such as waste management, waste-recycling, communications, water distribution and even research, development, innovation and higher education.

These projects cover investment needs even while seeking to increase the quality and efficiency of public services.

The most obvious challenge for successful PPPs is to identify the circumstances under which they are superior to traditional public procurement of infrastructure and social investment.

The European experience shows that PPPs do bring into projects a business culture oriented towards efficiency, quality and economic viability in a manner that benefits society as a whole.

(The author is former Europe Director, CII, and lives in Cologne, Germany.)

(This article was published on November 27, 2012)
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Our need for infrastructure development is huge and PPP is a new
avenue. However, there is need for laying down properly the PPP terms
and conditions. Look at Britain, it is sending its civil servants to
Oxford School of Management for enabling them learn skills on dealing
with private sector. We are doing precious little to equip our civll
servants. Why go that far. Our leading business schools can tailor
suitable short term courses –of course associating our officials in
the CAG who may have come to know of how ill –conceived, poorly
drafted are PPP conditions. Also allied are the questions of where our
projects should flow. Yesterday media covered a lot of agreements with
China. One spoke of bullet trains and another of seeking Chinese
assistance of all things for modernising our railway stations. It
shocked me to learn that after 65 years of our economic progress ,we
do not know how to even rebuild railway stations. (continues)

from:  s.subramanyan
Posted on: Nov 28, 2012 at 12:11 IST

Public Private Partnerships offer an excellent alternative to
traditional procurement methods and its time we in India see the public and private sectors doing more business together.

from:  Narayanan Srinivasan
Posted on: Nov 28, 2012 at 15:54 IST
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