Seminar on

Public Private Partnerships February 24 2010

PPP Experiences – Challenges and Way Forward

Administrative Staff College of India

PPPs – Challenges and Way Forward

PPP Experiences

• Increasing realization on the role of PPPs in providing infrastructure and services

• A number of success stories in roads, highways, airports

• The urban infrastructure is lagging compared to these sectors

• There is an urgent need to understand the challenges and address the same

Challenge 1-Leadership

• Leadership commitment – political and administrative

• Understanding and awareness• Assigning priority• Allocating funds • Creating enabling environment –

leading by example, motivation

Challenge 2-Public good to private good

• Urban services as social or public goods

• Touch upon large number of people• Visible and immediate• Basic necessities or rights of the poor• Difficult to convince large number of

stakeholders about changing the status quo

Challenge 3 - Viability

• Limited viability and limited scope for cost recovery through user charges

• Large inefficiencies• Multiple delivery mechanisms• Willingness to pay and willingness to

charge

Challenge 4-Cost Recovery

• Unscientific Fixing of user charges• Poor collection and billing systems• Non-availability of data

Challenge 5-Capacity Gaps

• Municipal systems and staff not familiar with PPP process

• Developing bid documentation• Managing and selecting private

partner• Contract management• Implementation issues

Challenge 6-Private Sector

• Not many private players in urban sector

• Data base and information not available

• Private sector in urban services is equally not developed and not familiar with the municipal context

Way Forward 1-Policy Support

• Emerging favourable policy context – JNNNURM, VGF

• Bringing legal and regulatory reforms • Increased budgetary allocations• Project development support

Way Forward 2-Policy and Advocacy

• Policy workshops for political and administrative leadership

• Interactions with private sector • Workshops and training programmes• Exchange visits

Way Forward 3-Sectoral Reforms

• Increased commercial orientation• Scientific approach to tariff fixation• Effective billing and collection

mechanisms• Achieving full O&M cost recovery

Way Forward 4-Project Development

• Technical assistance and handholding support to service delivery agencies

• Building internal core PPP teams• More consultants and transaction

advisors • IEC Campaign for citizens

Summing up……

• Political will and leadership

• Policy and funding support

• Project development and structure

• Transparent bidding process

• Sustainable revenue model

• Risk identification and mitigation

• Contract management

• Engaging ctizen

• Project implementation

• Monitoring and evaluation

THANK YOU