While presenting the Union Budget 2011-12, the finance minister allocated R 2,14,000 crore for infrastructure, an increase of 23.3% over 2010-11. The FM expressed that the government will be coming up with a comprehensive policy for further development of PPP projects. The planning commission had already projected an investment of R 20,56,150 crore for the Eleventh Plan, which was more than twice the investment during the Tenth Plan. These figures clearly indicate the government?s renewed emphasis on infrastructure development as one of the inevitable key instruments for changing the face of growing India.
Though the concept of PPP has been there for almost three decades, there is no book that really addresses the requirement of providing a theoretical treatise combined with practical insights of PPP. There is an abundance of material in the form of model concession agreements, model bidding documents, detailed guidelines, toolkits, references, policy documents and reports of international institutions like the World Bank and various government agencies. R N Joshi, who is currently functioning as the finance director of Delhi Metro Rail Corporation has a long track record of infrastructure financing for more than three-and-a-half decades in prominent Indian public enterprises. He elaborates the theoretical postulates of PPP lucidly, backed by case studies and he also provides his own experiences and perspectives while narrating real project situations. Public Private Partnership in Infrastructure: Perspectives. Principles. Practices is a rare synthesis of what all one would like to look forward to while approaching a PPP project in any key infrastructure domain.
His book has been appreciated by none other than the modern engineering visionary E Sreedharan, who has changed the face of Delhi with an ultramodern metro railway project. Delhi metro has become a niche and a role model for project implementation and execution in the country. E Sreedharan says that Joshi?s book Public Private Partnership in Infrastructure: Perspectives. Principles. Practices ?is a well researched, analyzed and documented book comprehensively covering the theory and practice of PPP and its principles and implementation, including the best practices to follow and pitfalls to avoid, which makes the book unique and a reference point for everyone?.
Broadly, the book is divided into two parts; the first part deals with fundamentals of PPP as a concept, detailing essential components of PPP and how the country can take full benefit of this unique development model. PPP is necessary to mobilise and channelise private entrepreneurship, management capabilities, technical and financial resources. This in turn will accelerate development of infrastructure, thereby facilitating rapid economic and industrial growth. The writer points out that the key factor for the success of any PPP project in any sector, centres around identification of risk and its allocation between the partners, namely, public and private sector in an appropriate manner. This should be done after intense data analysis, estimation and judicious application of due diligence, which will provide the private sector with adequate incentive to come forward and participate in the development process jointly with the public sector. The book explains in considerable detail the entire gamut of measures that need to be taken for identification, mitigation and equitable allocation of risks between the participating entities, when they have conflicting financial interests amidst one key goal?successful execution of the project.
The chapter on financing explains the mechanism of mobilising capital through special purpose vehicle (SPV) from the market along with other instruments for resource mobilisation. The book emphasises the necessity of supporting contractual and legal framework for PPP model after examining relevant enactments in different nations that have been practising PPP model for development of infrastructure, it also highlights the pros and cons, and comes forward with suggestions for improvement.
The second part of the book is devoted to key infrastructure sub sectors like roads, water and sanitation, urban rail transit, airports, ports, power and telecom. Joshi explains the salient features, obstacles and the progress made across the world in each sector. Besides giving case studies of implementation of PPP projects, the author has also taken pains to explain the technological differences to appreciate the themes elucidated in the book. To cite an example, he has described the subtle difference between the currently infamous 2G and 3G spectrums in telecommunication sector with a detailed interesting case study on the emergence of Bharati Airtel as a telecom titan from its humble beginning as a tiny bicycle parts manufacturing unit in 1970s.
The book explains how varied infrastructure projects in different sectors like road, water and sanitation, ports and airports, urban rail transit and power have made substantial progress after adopting PPP as a mode of project implementation. The telecom has made remarkable progress under the private sector intervention in both developed and developing countries including India inspite of innumerable controversies and allegations of corruption.
Besides narrating successful stories from other countries, the author also devotes to the Indian scenario focussing on the present handicaps, legal flaws and steps initiated to improve the PPP model in the country. He further mentions about how the PPP format can be adapted to the Indian requirements after taking into account the practical problems of implementation.
The writer is director general, Comptroller and Auditor General of India