Seminar on Public Private Partnerships February 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

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