Education

PPP model, to deliver essential services

Updated on: Apr 27, 2012
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India has seen several successful public private partnership (PPP) projects in recent years across Central, State and urban local bodies for providing various essential public services. These projects, across sectors such as healthcare, education, public transport and infrastructure, hold significant promise for providing essential services of acceptable standards to large sections of the population. This can be achieved without denting the government's finances, already under considerable stress.

Healthcare, infra

The healthcare sector has seen reasonably successful PPP models in several States. A typical model envisages providing healthcare to weaker sections of the society through health insurance schemes and co-opting both the government and private sector hospitals for quality healthcare delivery. The insurance premium is shared between the Central and State Governments.

While this is seen as draining much needed resources from the public healthcare system, the hitherto low penetration of health insurance and the creaking public health infrastructure of India make a strong case for a PPP model in this sector.

Urban infrastructure is another area amenable to PPP models. Multi-level car parks in congested urban localities, public transport through buses, garbage collection and disposal, developing tourism destinations and related services such as adventure sports or hop-on/hop-off services are successful PPP models in several countries, and India has also started witnessing early success in these initiatives.

Policy framework

Education is a controversial sector where allowing for-profit entities to provide quality education is viewed with considerable scepticism. However, this sector has also seen successful PPP models in Rajasthan, Karnataka and a few other States where non-profit private sector entities have partnered with state governments to improve the quality of education imparted in public schools.

Roads, ports, airports and other large infrastructure sectors have already witnessed successful PPP models, benefiting all the stakeholders, namely, the public who use these services, the concessionaire who invests to earn decent returns and the Government, which gets robust revenue share besides ownership of assets at the end of the concession period.

India is at a critical juncture where the capital-starved Governments may not be able to meet the growing demand for these services, while private sector has accumulated significant capital, awaiting decent investment opportunities.

A proactive policy framework for PPP models, transparent award of concessions, appropriate structuring to capitalise on innovative revenue streams and clear rules of the game without any surprises/shocks can help India leapfrog on several essential services without having to wait for government allocations.

(The author is ex-Director Ratings, CRISIL, and Co-founder, RiverBridge Investment Advisors Pvt Ltd. )

http://ChaseCut.blogspot.com

Published on November 15, 2017

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