In India?s infrastructure sphere, it is very clear now that public-private partnership (PPP) will be a major theme in the coming years. The limited but positive experience that we have had in the last few years and general acceptance of PPP (save for some minor resistance) has given policymakers enough confidence to make it mainstream. The debate is no longer about whether PPP but how PPP.
Unfortunately, though, several government agencies opting for the PPP model are unclear and indeed unsure of their main objectives; more often than not, they have the wrong objectives. Enhancing the quality of service rather than mere infrastructure creation should be the key purpose. While PPP can certainly help bring in private finance, this should not be the main driver. PPP models should really be designed to take full advantage of the efficiencies and expertise that the private sector can bring to project execution, operation and maintenance, customer service, revenue management?indeed in every aspect of management. A critical look at the processes adopted today and contractual arrangements suggests that we need to revisit these urgently.
It is time we started thinking in more detail of the critical service parameters in each of these infrastructure services, how to measure them as we target improvements, how to bring about equity and inclusiveness without disincentivising the private sector, how to institutionalise their regulation, etc. It may be a good idea for the government to work on all these with the help of domestic and international consumer organisations, NGOs, academic institutions, the private sector and the international community.
Many of the infrastructure problems we have today require complex solutions. Unfortunately, they cannot be addressed by shrink-wrapped, one-size-fits-all solutions. Incentivising the private sector to bring innovative approaches is essential. Standardised technology and management models used earlier by the government cannot work even if the private sector delivers them better. Unfortunately, the PPP models that we have adopted so far have not given us an opportunity to bring in innovation. Moreover, it needs more hard work by all concerned, particularly government agencies, to achieve innovation without losing transparency.
One of the biggest challenges we have today in making PPP successful is defining the future role of the incumbent government agencies whose roles are bound to shrink. If you want the man sitting on the tree to cut the branch on which he is sitting, you should also tell him how he should come down without getting hurt otherwise, he simply will not cut the branch. In state after state, there is resistance, both active and passive, from incumbent departments and agencies as attempts are made to take away their work without giving them a sense of direction. Educating them, creating a measure of buy-in on their new roles and building their capacity to transform is critical to making PPPs work.
It is equally important for the private sector to shoulder bigger responsibility to make PPPs successful. While the private sector has come to the fore in what has been posed as a challenge (and a good business opportunity) so far, they now need to prepare for an even bigger challenge of successfully maintaining and managing the assets created to provide the best service. We have very limited experience and expertise of doing a good job of these aspects. The operation, maintenance and management of infrastructure assets may appear to be a dull business, but it is really the most critical aspect that determines if as a country we have arrived.
?The writer is executive director, PricewaterhouseCoopers