Public Private Partnership - The Need of the Hour
India in 2015, is at the brink of a great leap forward, culturally, socially and economically.
With a population of 1.2 billion people and counting, we as a nation need to evolve and adapt to our ever-changing environment in order to sustain ourselves and prosper.
At this tipping point, our government finds itself stressed and lacking resources to provide stable and well built infrastructure such as roads, health care, electricity, water and waste management. Even with 2013-2014 witnessing a gross tax collection of ₹13.64 trillion (US$210 billion) and not including regulatory fees collected, our nation struggles to create adequate systems. One must take into consideration that the Government needs to provide for several facilities and infrastructure in one amongst many others such as scientific research, agriculture, military defence etc.
Social, economic and ecological issues have become a pressing matter for the Indian government and sustainability models which were once ignored are now being studied in order to tackle the obstacles expected in the coming decades.
India's strategy towards managing accelerated growth has been a great move in the geo-economical arena. Public Private Partnership models have slowly been developed over two decades and have witnessed success and learning experiences as well. However, several Private sector players are often wary of entering Government contracts. A host of reasons, play a role in this.
Leading PPP expert and MD of Vishvaraj infrastructure, Shri. Arun Lakhani ran us through some of the constraints that all private sector companies must take account of before venturing in to a PPP.
"Now, more that ever, there is a need for established companies and new entrepreneurs to come forward and play a vital role in developing our Nation, but only once they understand the challenges and are able to convert them in to opportunities", shared Mr. Lakhani.
Considerations for PPP Projects
Since India has open it's proverbial doors to PPPs, post the economic reforms in the 1990s, projects have faced issues which have restrained more the successful and widespread implementation of this model.
As Indian policy enforcers evolve they improve in their execution of long-term plans. However, one must understand that this is a process and as with all such matters, changes are inevitable. Over the years several inconsistencies have been pinpointed and improved. However, this has required private partners to alter their operations and internal policies, sometimes at their own cost.
"Staying updated with PPP regulations, flexibility and a streamlined approach to the environment is the best way forward", says the much experienced PPP advisor.
Although, progress has been achieved, there is much to be done about the pace at which we are growing. Deregulation of tariffs for public services needs to happen quicker if private investors can make the profits that will determine their future decisions.
Greater financial management and a stringent cost-vigilance is the only way forward according to Mr.Lakhani.
Transparency in the Bidding Process
Although technology has greatly assisted in making the tender acquiring process more transparent, several PPPs have shown signs of inconsistencies when it comes to bidding and suspension processes.
If more industrialists, builders and foreign investors are to step-in, transparency will have to be prioritised.
Although these aspects of our current socio-economic situation which every private company must keep in mind, they need not act as deterrents. With a growing investment in technology, streamlining of government protocols and taxes, there is much to be gained for those willing to place their faith in the subsequent success of PPPs.