May 12
Bhubaneswar: The Empowered Committee on Infrastructure for PPP Projects under the chairpersonship of Chief Secretary Anu Garg accorded in-pr
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Bhubaneswar: The Empowered Committee on Infrastructure for PPP Projects under the chairpersonship of Chief Secretary Anu Garg accorded in-pr
PM Anwar wants PPP projects to adopt strict, uncompromising governance principles
Datuk Seri Anwar Ibrahim wants all public-private partnership (PPP) projects to adopt and be implemented with strict and uncompromising governance principles. He said under the MADANI Government, the PPP projects should also take into account the issue of workers’ wages, as well as aspects of family needs including housing, education and health according to the circumstances and company’s…
कृषि एवं किसान कल्याण मंत्रालय और फिक्की ने कृषि में पीपीपी परियोजनाओं को आकर्षित करने के लिए संयुक्त पहल का शुभारम्भ किया
कृषि एवं किसान कल्याण मंत्रालय और फिक्की ने कृषि में पीपीपी परियोजनाओं को आकर्षित करने के लिए संयुक्त पहल का शुभारम्भ किया
श्री नरेंद्र सिंह तोमर ने कहा, देश और समाज के लिए कृषि क्षेत्र का सशक्तिकरण अहम है प्रधानमंत्री श्री नरेन्द्र मोदी ने पिछले आठ साल के अपने कार्यकाल के दौरान 1,500 निरर्थक कानूनों को निरस्त कर दिया, जिससे आम आदमी के लिए जीवन आसान हुआ है : श्री तोमर केंद्रीय कृषि एवं किसान कल्याण मंत्री श्री नरेंद्र सिंह तोमर ने आज नई दिल्ली में सार्वजनिक निजी भागीदारी (पीपीपी) पर परियोजना प्रबंधन इकाई (पीएमयू) का…
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Public private partnership is a key model of infrastructure development in India today but there is a need to mature it to deliver infrastructure projects better and faster. Discuss in light of the Kelkar Committee's recommendations.
Public private partnership is a key model of infrastructure development in India today but there is a need to mature it to deliver infrastructure projects better and faster. Discuss in light of the Kelkar Committee’s recommendations.
Approach
• Give a brief introduction about PPP
• Highlight the various shortcomings in PPP
• Discuss the important recommendation of Kelkar committee
• Conclude appropriately.
Model Answer :
Public private partnership (PPP) is a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and…
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DDA in the year 2004 ran schemes for rehabilitating such slum dwellers through re-development/ upgradation of the existing areas of Delhi like Narela, Dwarka etc. To know more visit : http://www.kathputlicolonydda.com/
Nagpur 24x7 Water Projects - An Experiment and a Testimony
The situation In the sphere of urban development and economic sustainability, it is pivotal to acquire and study as much data as possible. Analysis and learnings from past and on-going projects is necessary for determining the success of future projects and the allocation of national and local budgets.
With this in mind, nations such as India must plan decades ahead in order to achieve the desired growth. With a growing population of 1.2 billion people and a scarcity of resources, it is imperative that the Government take swift actions towards long term goals. Water, and its availability, is one such resource which is seen as not only a necessity but an indicator of general well-being. Urban India is often found struggling to provide citizens with clean drinking water and the situation only becomes worse as people migrate from the towns and villages to surrounding cities.
Nagpur, the third largest city in Maharashtra, is a great example of a local government taking action to cope with the increasing demands of its inhabitants. Due to rapid urbanisation of Nagpur across the last two decades, the challenges for adequate water supply have also increased. Availability of water has been inconsistent and ranges from a few hours a day to a slightly rare but possible, few minutes a day. Compounded with this is the mismanagement of water distribution leading to losses of up to 60%. In addition quality of water is frequently found to be below drinking standards.
In 2012, in order to face this gigantic challenge the Nagpur Municipal Corporation chose to enter in to a Public Private Partnership, a landmark move in the history of the Government working hand-in-hand with the private sector. Nagpur essentially opened it's doors and mind to an opportunity that would help build a streamlined and efficient model which could be replicated in the future.
Nagpur became the first city in India to build a 24/7, fully pressurised drinking water supply system. A joint venture company aptly named Orange City Water was created and entered a concussion contract under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM)
An expansive requirement for infrastructural upgradation and replacement means that it will take a minimum of five years to connect every citizen with 24/7 water supply. On their end, the Nagpur Municipal Corporation will retain ownership of the assets and will take responsibility of setting up the tariffs. Orange City Water will operate all the water treatment plants and the water distribution network, amounting to a combined capacity of ~750 MLD
The goal is to eventually connect the entire city, including the slum population with a safe supply of water, better in quality and pressure. Water wastage is a great concern and this hope is to reduce it significantly, through the better maintenance of storage systems, pipes and taps.
During our interview with him, CEO of Vishvaraj Infrastructures, the driving force behind Napur 24x7 water supply project, Mr. Arun Lakhani shared a poignant view on this matter. "Our nation's government needs to see private players not just as tax-paying entities but partners of development. PPPs need to set their goals high in order to gain the most from the benefits."
Benefits The benefits are of this PPP model can only be understood and appreciated by comprehending the advantages that are gained through a 24/7 water supply system.
24x7 supply translates to a better public health.Maintaining full pressure removes the risk of bacterial contamination that can occur during interrupted water supply.
A PPP in this sector ensures a massive improvement in the services provided to all consumers, who henceforth are seen as customers. An increase in quantity, improvement in timing and consistency in availability across all starts of society is not just expected but required from an economic standpoint.
Service to the poor and to the rich is seen through a non-biased viewer. 24x7 supply means all citizens can hope to enjoy better health and hygiene which preventing the loss in economically productive time earlier used for collecting and carrying water. Indirectly, this saves time for employment opportunities.
24x7 allows customers to pay for better service as it reduces the costs they earlier incurred for coping with the inconsistencies.
Through efficient management overflowing storage systems are avoided and collected water is prevented from being discarded when new water arrives.
A PPP model ensures that the use of technology is given priority and in this way conservation is encouraged through metering and state-of-the art monitoring systems. This helps achieve management and operational efficiencies and reduces illegal connections.
Before concluding, it is necessary to go back to the start. The idea is not just to take action but begin an initiative so that one can learn from mistakes and evolve. It is impossible to put a system into place without overcoming challenges, correcting flaws and understanding changing requirements. The Nagpur Municipal Corporation has taken the first step towards the future, but the path will surely bring forth several challenges. "Let hurdles be a learning opportunity and not a reason to stop the development of our nation", says Mr. Arun Lakhani.
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.
Legal Volatility 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.
Tariffs 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.
Understanding Public Private Partnerships
A lot has been said and debated about Public Private Partnerships, but for many individuals this just serves as a term used to describe an obscure idea of development occurring in our nation. It is important for the citizens of India to be involved in decisions being made within our democracy and for that to occur they must be educated in the intricacies of something as impactful as the creation of a partnership between the public and private sector.
In the context of infrastructure development what is PPP?
As is the case with most countries, governments face the challenging task of providing new infrastructure services and assets such as electricity supply or a new highway. Even with 2013-2014 witnessing a gross tax collection of ₹13.64 trillion (US$210 billion) India struggles to create adequate systems. Funds raised through taxes and regulatory fees are massive yet limited, due to multiple expenses such as scientific research, agricultural support and militarydefense, to name a few.
In such a scenario, partnering with the private sector provides an attractive solution towards creating a new supply source for infrastructural improvements.
How does PPP work?
A legal contract binds partners in a PPP to share the responsibility for the implementation, operation, management and monitoring of the infrastructure project. Emphasis is laid on each partner's skill and their ability to fulfil public needs through the efficient allocation of resources and risks in return of rewards.
What advantages PPPs may provide?
To better understand the advantages of a PPP we spoke to Mr. Arun Lakhani, MD of Vishvaraj Infrastructures Limited. "Governments worldwide are increasingly turning to the private sector to help provide services in communication, energy and power, water and transport sectors. Streamlined and efficient methods usually adopted by corporates are the reason for this"
In addition, there are several other reasons which encourage governments to collaborate with private players.
The access to additional resources that can be utilised to match the exponentially increasing needs of the public
Availability of extra investments through local and international players
State-of-the-art technology employed for the operation and management of these services
Reduced cost in the form of better executed planning and development of each project is a large benefit that is often considered. A profitability driven approach ensures better screening of options, structuring of projects and choice of technology.
"The Indian Government can benefit from an increase in services, without spending immediate cash, avoiding major risks by transferring them to the private sector and ensuring timely delivery of projects", added Mr. Lakhani.
PPP are often misunderstood to be simple construction projects by the masses. However, in reality, there are differences between a traditional construction project and a PPP in terms of development, implementation and management. The objective of the PPP is to deliver a specific service and not simply build an asset. Most importantly PPP contracts are more complex and have a much longer tenure than a construction contract. An understanding of this is necessary not just for the partners but also for the general public interested in the development of the country.
Countries around the world have experimented with different forms of PPP. In India, there are 6 major models, Service Contract, Management Contract, Lease Contract, Concessions, Build-Operate-Transfer and Joint Ventures. The government usually analyses the need for a PPP and then decides upon the model through which to achieve it's goal. A great example of a PPP model in our country is the Nagpur 24x7 water project.
Nagpur, due to rapid urbanisation across the last two decades, has faced severe water supply challenges. The availability of water has been highly inconsistent ranging from a few hours a day to a few minutes . Mismanagement of water distribution lead to losses of upto 60%. Quality of water was frequently found to be below drinking standards.
In 2012, in order to overcome this gigantic challenge the Nagpur Municipal Corporation chose to enter in to a Public Private Partnership, a landmark move in the history of the Government working hand-in-hand with the private sector. Nagpur essentially opened it's doors and mind to an opportunity that would help build a streamlined and efficient model which could be replicated in the future.
Nagpur became the first city in India to build a 24/7, fully pressurised drinking water supply system. A joint venture company aptly named Orange City Water was created and entered a concussion contract under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM)
There several challenges faced when forming a PPP and these are often cited as reasons to avoid a collaborative approach. However, naysayers and critics fail to see the potential that PPPs provide for the citizens and the government. It is of course important to understand the challenges and in most scenarios these are caused to due to bad governance, weak policies and a lack of transparency. "As a country we should overcome the challenges, figure out ways to build a better PPP model based on strong protocols and the use of technology and rise over the risks that this model presents, because only in doing so is India going to match the benchmarks of economic growth set by other nations", advises Mr. Arun Lakhani.
There is much to be learnt and researched about PPP models, but as citizens the right way ahead would be to study the projects proposed under PPPs and vocalise our concern or support.