Pvt Ltd, Public Good?

As things stand, PPPs in infrastructure are still dominated by roads, with limited successes in power, ports and airports. If anything, the recent brouhaha over the new Bangalore and Hyderabad airports only serve to highlight the continuing issues such PPPs face—even when they are finally up and running. And the battle over end-user charges at these airports doesn't seem to be over. Even though the government says there's "no option" but to woo private investment in infrastructure, there's considerable scepticism that its targets will be met: PPPs are expected to make up 44 per cent of the staggering $492 billion required for infrastructure in the 11th Plan period. In urban transportation and housing too, there are few PPPs as city governments prefer to go it alone—or completely outsource to private players.

To be sure, through reforms and concerted efforts to iron out policy kinks, the government has been striving to make partnerships more attractive for industry. The Planning Commission has formulated a model concession agreement, which has been endorsed and accepted by some states including Gujarat, Maharashtra, Karnataka and AP. For the roads sector, a tolls policy should be out soon. After years of changing and chopping, a more consistent regulatory environment—and contractual sanctity—is needed. "We see PPPs as an inevitable route...if you don't get private investment, the infrastructure deficit will only increase. This would impede growth, employment and welfare," avers Gajendra Haldea, adviser (infrastructure), Planning Commission.

The onus of implementing partnerships rests with the state governments. Here, the poor response from some states has seen considerable funds lying unutilised. This applies to many of the rural development projects in sanitation, rural roads and rural electrification. On the other hand, many states like Bihar, Gujarat, Tamil Nadu, MP are not only utilising the centrally-funded projects, but also putting their own resources to good use. While the central government has been using a carrot-and-stick approach of conditional access to funds—Maharashtra's recent repeal of the Urban Land Ceiling Act was one such example, driven by JNNURM—the ultimate driver of partnerships will remain the state. Clearly, the answer lies in educating more states about the benefits of partnership.

As for the future, a move to better evaluate government schemes is in the works. While it remains to be seen just how this will reduce corruption in the delivery of government schemes, any beginning would lend more faith in the system. More importantly, the government will have to master the balancing act of letting partnerships flourish while enhancing its regulatory role. This applies to all sectors of course, but to education and health in particular—where the state has to lead the way.

We found many positive stories around partnerships. Like a community effort to clean up dirty wells in Bihar, a thriving floriculture initiative in Assam, a successful initiative to set right Calcutta's creaky infrastructure, and a private firm that has mastered the art of making low-cost lenses used in cataract operations. For every success story, there are many of failed outcomes. The road ahead is clear. But it's going to be a long haul.