ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Floundering Public-Private Partnerships

Some Suggestions

Public-private partnerships are floundering in India, mainly due to the opportunistic behaviour of the private sector partners, regulatory uncertainty, and poor value-for-money to the government. What can be done to salvage the situation?

The views expressed are personal.

As per the Private Participation in Infrastructure Database of the World Bank,1 India is second among the developing countries, both by the number of public-private partnership (PPP) projects, as well as the associated investments – 725 PPP projects accounting for an investment of over Rs 15 lakh crore. India has made the adoption of PPPs in infrastructure the default option, resulting in an increasing trend in the private sector’s contribution to total infrastructure investment – from a quarter of the total infrastructure investment in the Tenth Plan period (2002-07) to a third in the Eleventh Plan period (2007-12), which is expected to rise up to half in the Twelfth Plan period (2012-17).

However, everything is not sanguine with the PPP regime in the country. About a year ago, The Economist (2012)published an article on the difficult times faced by several trophy PPPs, including the Delhi International Airport Limited, the Delhi Airport Metro Express, and the Tata Mundra Power Generation project. Things have deteriorated since then and the Delhi Airport Metro Express project has reverted to the public sector while the Tata Mundra project is being renegotiated at great cost to the public sector.

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