Sharing India's PPP Experience

30 Pages·2015·1 MB·English

Sharing India’s PPP Experience

UNESCAP Policy Dialogue on PPPs in Infrastructure
Kathmandu, 22 September 2015

Abhilasha Mahapatra
Director ( PPP)
PPP Cell, Ministry of Finance
Government of India
Infrastructure needs – Bridging the Gap
“Investment gap” Options to bridge the gap
• Gap between existing and required
infrastructure

Traditional
• Improving the availability of infrastructure by
Procurement Model
increased investment in the infrastructure
assets;

Public Private
• The 12th FYP projects an investment of Rs.
Partnership
55.75 lakhs crores during the 2012-17 period,
of which, the share of private investment is
expected to rise substantially from 37 percent
in 11th FYP to 48 percent in 12th FYP. Privatization
“Efficiency gap”
• Need to enhance quality of service to
minimum acceptable standards of service
Public Private Partnership is a mode for creation of assets
as well as improve service delivery
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PPP Cell, Department of Economic Affairs, Ministry of Finance
PPPs in India
Rapid urbanization and industrial growth led to demands for

basic infrastructure, such as, water supply & sanitation,
transportation and energy.
Rapid growth in purchasing power in the rural areas

simultaneously - need for improving connectivity and services
Budgetary Constraints and public sector capacity

considerations
Critical relationship between infrastructure and economic

growth, need for policy and enabling measures to support the
creation of quality infrastructure and efficient delivery of
services –
Emphasis on the Public Private Partnership mode of delivery.


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PPP Cell, Department of Economic Affairs, Ministry of Finance
Advantages of PPPs
• PPPs not only provide finance for public infrastructure but
also leverage private sector managerial efficiency,
competency for operation and maintenance of the created
assets commercial and creative skills.
• Experience & track record
o Commercial and financial innovation for:
- efficient capital structures
- competitive funding terms
o Strong demand from capital markets for structured project risk
• Sources non-conventional financing of public infrastructure.
• Contractual accountability on the private party to ensure
timely and quality infrastructure service to the end users
• Globally found that 75 % of PPP projects have been delivered
on time or before time.
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PPP Cell, Department of Economic Affairs, Ministry of Finance
Evolution
of PPPs in India
The measures taken by Government of India resulted in a robust pipeline of

projects at different stages of implementation i.e. under bidding,
construction and operational stages ( >1000 PPP projects with project cost
of >Rs 5 crores each with an estimated total investment of INR 8.8 lakh
crores.) .
Sectoral spread of PPPs diverse though transport projects (roads, airports

and ports), considered as more successful.( The new airports at Delhi,
Mumbai, Bangalore & Hyderabad , and the large volume of highway
projects taken up on BOT showcase the programmatic success of PPPs in
the country. )
As per the 2015 report of The Economist Intelligence Unit, “Evaluating the

environment for PPPs in Asia-Pacific 2014”-India ranks first in the world in
“Operational Maturity” for PPP projects, third for sub-national PPP activity
.
and fifth overall in terms of having an ideal environment for PPP projects
Growth was supported by favorable policy reforms and financial support

for PPPs.
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PPP Cell, Department of Economic Affairs, Ministry of Finance
Evolution
of PPPs in India
Infrastructure investment during the XI th Plan - Rs.23,74,307 crore

(at current prices), i.e 2 .8 times the investment of Rs.8,37,159 crore
realized in the X th Plan (2002-2007)-around 7% GDP.
Largely contributed by private investment (share of private investment increasing

from 22 %in the Xth Plan to 37 %in the XI th Plan .

XII th Plan (2012-2017) projection of Rs.55.75 lakh crore (at current

prices) in infrastructure -more than double the investment achieved in
XI th Plan.
Strategy of encouraging higher private investment in infrastructure, directly and

through PPPs - share of private investment (incl PPPS) about 48 %.

Experience in the first two years of XII Plan suggests slow down in

infrastructure investment and likely shortfall of about 30 per cent, with the
shortfall in public investment and private investment at 20 per cent and 43
.
per cent respectively
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PPP Cell, Department of Economic Affairs, Ministry of Finance
Enabling Environment :
Key to Success Story
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PPP Cell, Department of Economic Affairs, Ministry of Finance
Enabling PPP Framework:
Institutional Mechanisms
Streamlining of procedures for systematic and speedy

appraisal and approval of projects ( SFC & PPPAC)
http://pppinindia.com/PPPAC_Guidelines_and_Forms.php
Public Private Partnership (PPP) Cell set up in MoF in 2006

for mainstreaming and facilitating PPPs and capacity
building for PPPs
Progressively more sectors have been opened to private and

foreign investment,
Levy of user charges promoted

Standardized Contractual Documents such as sector specific

Model Concession Agreements and Standardized bidding
documents such as Model Request for Qualifications and
Model Request for Proposals
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PPP Cell, Department of Economic Affairs, Ministry of Finance
Enabling PPP Framework:
Financial Support to PPP Projects
Scheme for Financial Support to PPPs in Infrastructure to

provide Viability Gap Funding (VGF) to PPP projects.
http://pppinindia.com/VGF_Guidelines_and_Forms.php

India Infrastructure Finance Company Limited (IIFCL) to

provide long tenor debt to infrastructure projects.

Scheme and Guidelines for India Infrastructure Project

Development Fund (IIPDF) for providing financial support
for quality project development activities to the States and
the Central Ministries
http://pppinindia.com/IIPDF_Home.php

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PPP Cell, Department of Economic Affairs, Ministry of Finance
Enabling PPP Framework:
Capacity-Building Initiatives
National PPP Capacity Building Programme – Dedicated training

for Group A and B category officials of the government in various
central and state government departments, para-statal agencies and
urban local bodies.
Information dissemination through a dedicated website

www.pppinindia.com to provide comprehensive information on the
status and extent of PPP initiatives in India Contains :
Government Guidelines and Knowledge Products for use of PPP
•
practitioners in various sectors .

• Online PPP Toolkits for 5 sectors to help improve decision-making for
infrastructure PPPs and structure better PPP projects
Mainstreaming PPPs by providing support to State and Centre PPP

Cells ( ADB TA programmes to provide PPP Experts , MIS Experts )
Knowledge Exchange to share best practices , exposure visits and

knowledge exchange programmes with other countries.( MoU with
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AfDB )
PPP Cell, Department of Economic Affairs, Ministry of Finance