Public Private Partnership in India

A public–private partnership (PPP or 3P) is a commercial legal relationship defined by the Government of India in 2011 as "an arrangement between a government / statutory entity / government owned entity on one side and a private sector entity on the other, for the provision of public assets and/or public services, through investments being made and/or management being undertaken by the private sector entity, for a specified period of time, where there is well defined allocation of risk between the private sector and the public entity and the private entity receives performance linked payments that conform (or are benchmarked) to specified and pre-determined performance standards, measurable by the public entity or its representative".

The Government of India recognizes several types of PPPs, including: User-fee based BOT models, User-fee based BOT model, Performance based management/maintenance contracts and Modified design-build (turnkey) contracts. Today, there are hundreds of PPP projects in various stages of implementation throughout the country.

As outlined in its XII Five Year Plan (2012–2017), India has an ambitious target of infrastructure investment (estimated at US$1 trillion). In the face of such an enormous investment requirement, the Government of India is actively promoting PPPs in many sectors of the economy. According to the World Bank, about 824 PPP projects have reached financial closure since 1990 in India.

The Ministry of Finance centralizes the coordination of PPPs, through its Department of Economic Affairs' (DEA) PPP Cell. In 2011, the DEA published guidelines for the formulation and approval of PPP projects. This was part of an endeavor to streamline PPP procedures and strengthen the regulatory framework at the national level to expedite PPP projects approval, reassure private parties and encourage them to enter into PPPs in India. This was one of the main roles of the Public Private Partnership Appraisal Committee (PPPAC) which is responsible for PPP project appraisal at the central level.

The Government also created a Viability Gap Funding Scheme for PPP projects to help promote the sustainability of the infrastructure projects. This scheme provides financial support (grants) to infrastructure projects, normally in the form of a capital grant at the stage of project construction (up to 20 percent of the total project).

...
Wikipedia