Public-private partnership for core sector underscored

Can India follow the UK's example of public-private partnerships (PPP) to build infrastructure to meet public needs?

If Stephen Harris, head-international, International Financial Services, London and John Davie, director, Vector Management are to be believed, then India, like Britain, can also form similar public-private partnerships.

Today the UK depends on PPP to build and manage schools, transport, water, hospitals, prisons and even managing air traffic control at the airports.

Harris, Davie and Kamala Sekar, head-export finance and PPP promotion, UK Trade & Investment, part of the expert PPP team, were in Mumbai after a whirlwind round of meetings with the central and various state government bodies to discuss the possibilities to share expertise in setting up these partnerships in India.

"No government today can support the kind of infrastructural needs that are required by a country's growing population. After 25 years of working with this model, we have an expertise that can be modified to a country's requirements," said Davie.

Today more than 700 projects across various sectors come under the PPP umbrella in the UK leading to cost efficiencies and mitigating increased cost risks related to time overruns.

Added Harris, "PPP, unlike privatisation is a contractual relationship. In privatisation operations are taken out of government control, whereas in PPP the government controls the output specifications given to the private player with no interference in the running of the project."

Setting up a PPP involves a central task force in, ideally the ministry of finance to frame policy and liaison with state governments and other departments as well as a strong regulatory body to ensure that the specifications are met.

"The government states what it requires in the long run, a projection that can run from 20-30 years and one that looks at the mega picture," said Sekar.

The project goes through a bidding process, where Harris and Davie feel, the player with maximum expertise should win over the player that is the lower bidder. "It's the only way to ensure quality," they said.

Currently, India has seen a few disinvestments and the build-operate transfer model between the public and private sectors.

But Harris and Davie feel that to meet growing infrastructural requirements, India will need to move beyond these models.