PUBLIC PRIVATE PARTNERSHIP (PPP)
For Bank Exams-Railways-SSC CGL-CS
Introduction:
Public Private Partnerships (PPP) was adapted to auger growth in
infrastructure development in the country and thereby giving a positive thrust
to the Indian economy. The Government took the PPP route for implementation of
projects in roads, ports, airports, railways, power and urban utilities as well
as in social sectors. The contribution of PPPs in the infrastructure
development across the country has been immense. However, poor planning towards
implementation of the PPP model has led to faulty contractual structures and
absence of remedial tools. This has created an illness of non-implementation
and has proliferated growth of non-performing assets in the books of the
project lenders in India. The failure of various PPP projects is a major reason
for the books of the banks being saddled with non – performing assets.
The Government of
India has therefore concentration on developing different enabling tools
and activities to exuberance private sector investments into the country
through public-private partnerships (PPPs). These are vital for catalyzing
investments in new infrastructure, and for efficient operation and
maintenance of assets, existing and new, over their lifetime and ensuring focus
on service delivery.
Challenges in PPP:
Project development – The
project development activities such as, detailed feasibility study, land
acquisition, environmental/forest clearances etc., are not given adequate
importance by the concession authorities. The absence of adequate project
development by authorities leads to reduced interest by the private sector,
misplacing and many times delays at the time of execution.
Regulatory environment
– There is no uncommitted PPP regulator in India currently. In order to attract
more domestic and international private funding of infrastructure, a more
robust regulatory environment, with an independent regulator, is essential.
Financing availability
– The private sector is dependent upon commercial banks to increment debt for
the PPP projects. With commercial banks reaching the scrotal exposure limits,
and large Indian Infrastructure companies being highly leveraged, funding the
PPP projects is getting difficult.
Risks in PPP:
- Political interference
- Lack of transparency
- Cost attached
- Renegotiation of the assets due to long term nature of the projects
- Inexperienced personnel for project appraisal
Conclusion:
The Government has
introduced PPP model in various other sector including development of schools
and urban areas. Under the 'Modern School Scheme', the Government will set up
2,500 modern schools through PPP. The first modern 'Anganwadi Centre' on PPP model took off in 2015 at Hasanpur
village in Sonepat district of Haryana. In February of this year, the Telecom
Regulatory Authority of India has recommended the implementation of rural
broadband network by PPP model. Despite various setbacks, PPPs will continue to
drive the infrastructure growth in the country. However, in order to maintain
the momentum, the big reforms should be taken up on priority basis.
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