The Union Budget 2018-19 has laid special emphasis on infrastructure development in upcoming years. The Union Government mentioned the need of expending 50 lakh crore Rupees in upcoming years for the upliftment of infrastructural facilities in India. Various initiatives and innovations are being planned for improving the road connectivity, rail safety, air connectivity and waterways development in the upcoming period. The main focus for implementing these reforms remain the involvement of private sector alongwith public sector via the modality of Public-Private-Partnerships (PPP). This article tries to throw light on the concept of PPP project, its types and need for future development.

Concept of PPP- Public Private Participation (PPP) project is an arrangement between the Government entity and the Private sector entity over a period of time. It is not mere outsourcing of functions by the Government to the private sector or it is also not the donation by a private party for a public good. The scope of PPP projects is very wide. PPP is a contract between public and private sector entity for the provision of public assets or public services, through investments made by the private sector entity, for a specified period of time, where there is well defined allocation of risk between the private sector and the public sector.

In a market economy, there are certain positives and negatives associated with the public sector as well as private sector. The PPP model offers a win-win situation for both – public sector as well as private sector, where in the capital infusion and technical expertise component is contributed by the private sector and in lieu it receives the performance linked pay of the work or services provided. The private sector partner in PPP project participates in designing, completing, implementing and funding the project whereas the public sector partner focuses on defining and monitoring the compliance with the objectives. Risks associated with the PPP project are distributed between the public and private partners according to the ability of each partner to assess, control and cope with them. The requirement of infrastructure development in Indian economy along with the provision of quality public services are being fulfilled through various PPP projects, by efficient and effective utilisation of available resources.

Types of PPP-  Public-private partnerships (PPPs) can take a wide range of forms varying in the degree of purpose, involvement of the private entity, legal structure and the risk sharing. There are different models of PPP to allow different levels of private sector participation. There is a type of PPP where the private sector builds, develops, operates and manages an asset and does not transfer the ownership to the government. The schemes are referred as: Build – Own – Operate (BOO); Design – Construct- Manage – Finance (DCMF); Build – Develop – Operate (BDO). The other type of PPP project includes the projects where the private sector buys an existing asset from the Government and renovates, expands and then operates the asset without transferring ownership to the Government. The variants under this model are: Buy- Build- Operate (BBO); Lease – Develop – Operate (LDO); Wrap – Around – Addition (WAA). Lastly, in few of the PPP projects, the private sector designs and builds an asset, operates it and then transfers it to the government after the contract period ends. The asset is rented or leased to the private sector by the Government. The variants include: Build- Operate- Transfer (BOT); Build – Rent – Own – Transfer (BROT) ; Build – Own – Operate – Transfer (BOOT) ; Build –Transfer- Operate (BTO) and Build – lease – operate – transfer (BLOT).

The newer versions of PPP like Swiss model of investment or Hybrid annuity model are contributing in the growth story of Indian economy. There exists a significant untapped potential for the use of the PPP model in                e-governance, health and education sectors. At the central level, the National Highway Authority of India (NHAI) is the leading user of the PPP model. NHAI is successfully chasing the target of building 40 km per day construction of new roads by the method of PPP in year 2017-18 and 45 km per day for year 2018-19. Considering the success of PPP model in India, there is no doubt that the increasing scope of PPP modality would show the path for future development of modern Indian economy alongwith the involvement of more and more people in nation building.

(The author of this article , Lt Col (Dr) Satish Dhage, is an ex Army officer and has been qualified for IPS (Indian Police Services) through IPS LCE 2012. Presently, he is Director, MGM Institute of Competitive Exams Aurangabad. For any queries or feedback, he can be contacted on email id : drsatishdhage@gmail.com)