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Framework for Public Private Partnerships
(PPPs) in India
PPP Days, Geneva
February 23, 2012
Ministry of Finance
Department of Economic Affairs
Aparna Bhatia
Director
PPP Cell
Ministry of Finance
Government of India
Ministry of Finance, Department of Economic Affairs 2
PPP Projects in India
Source: www.ppppindiadatabase.com
127
298
188
13
626
190
342
191
17
740
0
100
200
300
400
500
600
700
800
Under Bidding
Construction Completed Cancelled/ Reversion
Total
2009-2010
2010-2011
Ministry of Finance, Department of Economic Affairs 3
Sectors
(TPC Rs crore, No of Projects)
Roads; 176903.6, 408
Airports; 19111, 5
Education; 1849.71, 17
Energy ; 67244.59, 46
Health; 1833, 8
Ports; 74861.43, 55
Railways; 1601.56, 4
Tourism; 4486.08, 49
Urban Development; 29048.25, 129
Source: www.ppppindiadatabase.com
Ministry of Finance, Department of Economic Affairs
PPP Projects in India
99
63
104
86
72
60
45
State No. of
Projects TPC in Rs.
Crore
Andhra Pradesh 99 67997
Assam 4 391
Bihar 6 2094
Chandigarg 2 75
Chattisgarh 4 838
Delhi 11 11317
Goa 2 250
Gujarat 63 42667
Haryana 14 14564
Jammu & Kashmir 3 6319.76
Jharkhand 7 1704
Karnataka 104 44659
Kerela 17 17226
Madhya Pradesh 86 16098
Maharashra 72 44132
Meghalaya 2 762
Orissa 21 13350
Puducherry 2 3367
Punjab 31 3652
Rajasthan 60 15222
Sikkim 24 17111
Tamilnadu 45 18386
Uttarpradesh 12 27350
Uttrakhand 2 521
West Bengal 28 6487 Source: www.ppppindiadatabase.com
Ministry of Finance, Department of Economic Affairs 5
Maximizing investment and addressing budgetary constraints
Mobilization of private capital by leveraging public investments
Harness private sector efficiencies in asset creation, maintenance and
service delivery;
Provide focus on life cycle approach for development of a project,
involving asset creation and maintenance over its life cycle;
Create opportunities to bring in innovation and technological
improvements; and,
Enable affordable and improved services to the users in a responsible
and sustainable manner.
Government’s commitment to PPP mode
However, PPPs are complex contractual arrangements requiring due diligence to ensure equitable distribution of risk, robust commercial structure and protection of user interests through optimal delivery of services.
Ministry of Finance, Department of Economic Affairs
Encouraging PPPs in India
Key challenges:
Enabling policy/regulatory framework.
Financing: Long Term Equity & Debt
Credible, bankable infrastructure projects on offer to private sector
Capacity in public institutions and officials to manage PPP process
Capacity in the private sector : Developer/ investor and technical
manpower.
Advocacy efforts to create greater acceptance of PPPs by the
Stakeholders.
Ministry of Finance, Department of Economic Affairs 7
Scaling up PPPs through GoI Programmes
Policy &
Regulatory
Financing
Strengthen
PPP Cells
Robust
shelf of
Projects
Capacity
Building
Measures
by
Government
of India
Advocacy &
Communications
Model procurement
guidelines
Policy, Rules,
guidelines
formulation www.pppinin
dia.com,
database,
Communi-
cation Manual
Knowledge
series-
templates
and resource
material
State initiatives
& Pipelines
IIFCL- long
tenor loans
&
Refinancing
Viability Gap
Funding
Annuity
Online
toolkits
Project Dev
Support
IIPDF
Pilot
Projects
National
Capacity
building programme
Ministry of Finance, Department of Economic Affairs 8
Key Challenges
INSTITUTIONS
PROJECT
SELECTION STRUCTURING IMPLEMENTATION
Policies, Legislation, Procedures, Regulation, etc
CA
PA
CIT
Y
GO
VE
RN
AN
CE
Ministry of Finance, Department of Economic Affairs
Ministry of Finance, Department of Economic Affairs 11
PPP Policy: Objectives
11
Define Public Private Partnerships
Establish Principles of transparency, competition, affordability
Provide an objective and systematic framework for the assessment of
Value for Money (VfM) in procurement options analysis;
Provide a framework for more accurate cost and risk assessment and
mitigation for major capital projects;
provide a fair and transparent procurement framework to facilitate and
encourage provision of public assets and/or related services through PPP;
encourage efficiency and innovation in delivery of public infrastructure
and services through competition and optimal risk allocation
encourage investment by the private sector in the delivery of public
assets;
Increase the appeal of the India PPP market for national and international
market participants by setting out principles for an efficient, equitable,
consistent and transparent process for selection of private partners in
PPP projects, and ensure effective governance and accountability over the
project life cycle.
Ministry of Finance, Department of Economic Affairs
Public Private Partnership means an arrangement between a government
/ statutory entity / Public Entity and a Private Sector Entity, for the
provision of public assets and/or public services, through investments
being made and/ormanagement being undertaken by the Private Sector
Entity, for a specified period of time, where there is well defined
allocation of risks between the private sector and the public entity, and
the Private Sector Entity receives performance linked payments that
conform (or are benchmarked) to specified and pre-determined
performance standards, measurable by the public entity or its
representative.
Defining- Public Private Partnerships
