Much before Public Private Partnerships (PPP) became a buzzword in past ten years or so, it has had a long history. Thinking of an example? How do private schools aided by the government sound?
If we dig deeper we will find a long list of such ventures. But this article is not about them, it is about the policies and processes that govern PPP. On that front sadly we do not have much to cheer about and quite often the main issue is related to policies and processes that govern these partnerships.
So how do we rectify such a situation? The solution could be looking at successful PPP ventures outside of India.
To understand how other countries around the world are dealing with Public Private Partnerships we spoke to Mr. Arun Lakhani – MD Vishvaraj Infrastructure and leading authority on PPP model in India. Mr. Lakhani himself has led and executed various successful PPP projects with the Government of India such as Nagpur 24*7 water supply and Warora - chandrapur - Ballarpur Project.
Let's take a look at some countries that have mastered the PPP model for development
1. South Africa:
The main thrust fordevelopment in South Africa came in 1997 when it started its own PPP program. Three years later, in 2000, the country created a dedicated PPP Unit in its nation treasury. The main goal of this unit is to closely observe all the proposed and ongoing PPP projects. Besides, this unit also offers guidance to those involved in such ventures so that they know the rules and regulations.
Following are the main responsibility of this unit:
a) Approval of the PPP Feasibility Study
b) Approval of draft bid documents
c) Approval of the results
d) Approval of the negotiated PPP contract
Another country that is reaping huge rewards through PPP is Australia. A major contributor to this success is the state of Victoria. In fact, the base of current PPP initiative by Australian government is based on the Victoria model.
There is a fixed cap of AU$50million (max) for PPP ventures in Australia. The spectrum of these projects is quite huge; ranging from economic to social to infrastructure. The rules and regulations pertaining to PPP have been drafted by the Federal Government. These projects are governed by National PPP Policy and Guidelines by a joint partnership of Federal Government and the Partnerships Victoria Requirements.
Any PPP project that needs to be started undergoes a stringent evaluation and due diligence including
a) Case submission
3. United States:
One of the brightest examples of well governed PPP policies and processes is the United States of America. USA started the National Council for Public-Private Partnerships in 1985 for PPP with the following goals
a) Have full and open participation by public and private members
b) Assist both, public and private sectors with regards to analysis and implementations.
c) Educate people on PPP.
4. United Kingdom:
In order to ensure financial stability of PPP, UK introduced something called Private Finance Initiative (PFI). This initiative was started in the year 1992. The primary objective of PFI is to organize private funding foreconomic and infrastructureprojects.
Thanks to this channelized approach, this initiative has gone on to become one of the biggest PPP programs in the world. Its estimated valuation runs into tens of billions of pounds.
Having a dedicated governmental department or authority solely responsible for governing policies and frameworks to ensure that such ventures are adequately managed and executed is a must says Lakhani. It is important that the Government creates strong policies and is ideologically invested in the success of these projects without being a hindrance to actual execution.