INTRODUCTION

Public private partnership refers to an association between a Government agency and a private-sector organization that intend to complete a project for public welfare. This relationship is basically used to finance, build and purpose projects like public transportation systems, conference centers and parks. Aiming for a project to be accomplished on priority or may be sooner can be allowed in the association with public private partnerships.

Typically, the PPP can be referred neither a privatization not a partial privatization. Privatization has usually been defined as a course of shifting the ownership, functioning or management of a service or action wholly or partly, from the government to the private sector.

The key difference between the PPP and privatization is that the responsibility for delivery and backing a particular activity lies with the private sector in privatization. The PPP, on the other hand, involves full retention of responsibility by the government for rendering services. Under privatization, all the risks inherent in the business rest with the private sector while, under the PPP, risks and rewards are shared between the government and the private sector.

Indian picture of P3

In the Indian picture, P3 was adopted for the development of public assets explained in forms of schemes and modalities. As stated by Ministry of Finance, Government of India, the PPP project gradually means, “a project based on a concession or contract agreement, between any private sector organization on one side and any government or statutory entity in order to deliver optimum infrastructure services on payment of user charges.” This is comparatively a narrower definition than the world’s best practices where the private sector contribution in any form of concession agreement, divestiture of the public sector, Greenfield projects and lease contracts are well throughout the PPP.

Indian planning Commission has defined the ppp also known as P3 in a basic term as “It’s a mode of execution of government programmes or schemes in partnership with the private sector.” It basically enables the private sector to participate in funding, scheming, building, operating and maintaining the public sector programmes and projects.

After getting a rough idea, now considering the brief of ppp models as far as the stake is concerned. With 100% privately funded programs emerged privatizations and risks were transferred to the private sector with add to in public debt. Witnessing the early hit of privatizations that short lived, led to later salvage / funded of the private sector by public undertakings. Since PPPs have taken impetus as an improved mean to apportion the risk based on entity’s ability to manage risks between the government and private sector.

As our government recognizes the need to engage with the private sector in diverse sectors through P3 models for sustainable growth. The overarching objectives of such partnerships are mentioned as follows:-

To bind private sector efficiencies in the advantage creation, preservation and service delivery;Generate opportunities to fetch innovation and technological development;Enable reasonable and enhance the prescribed services to the users in an accountable manner.

The transparent framework to facilitate and support P3mode of execution for provision of public assets and linked services would be the major things to be kept in mind while developing P3.

Also, beside the strategies, ensuring efficiently planned prioritized and supervised projects to benefit the users. It aims to adopt an efficient, impartial, constant transparent and competitive procedure for range of private partners, and ensure well organized supremacy over the project life cycle.

As it is the ultimate motive of these partnerships to protect the interests of final users, project affected people, private and public sector units and other stakeholders. It will definitely encourage the efficient delivery of public services by attractive skillful and pioneering practices with optimum utilization of available skills, knowledge, experience & captain in the private sector.

And to provide necessary provision in budgets for contingent liabilities, in various such as, legal responsibility towards lenders in case of termination of contract.

Recognizing the essentials to accelerate the liberation of efficient Public Private Partnerships to attain the overall growth goals, the Government would build up programmes, guidelines and

practices based on the broad principles and if considered necessary, introduce changes to legislation and business rules to optimally deliver civic services.

To achieve the overall growth and development goals, after recognizing the essentials to accelerate the liberalization of P3, the government would formulate programmes and guidelines on the basis of the plank principles and, introduce changes to code of conduct of business to deliver civic services optimally, if considered necessary.

Public Private Partnerships in relation to Infrastructural growth

India, being the fourth largest economy in the world, lack of world class infrastructure is basically the major hindrance to growth and development in its economy. Inadequacy of infrastructure is analyzed to be a major constraint for sustainable growth in the last ten years. This emphasizes requirement of large scale public and private investment focusable on infrastructure, the latter through various outlines of PPPs, in regard of which considerable progress has been made.

The total investment in infrastructure that includes roads, railways, ports, oil gas pipelines, irrigation, and electricity and telecommunication is estimated to have increased from 5.7 percent of GDP in the base year of the Eleventh Plan to around 8 percent in the last year of the Plan. Efforts to draw private investment towards infrastructure through the PPP route have met with a considerable success, not only at the level of the Central government, but also at the level of individual states. A large number of PPPs have taken off, and many of them are at present equipped at both the Centre and in the states.

Thus PPP ultimately provides the services at a lower cost and more resourcefully to the end user surfaced in most infrastructure sectors like –Roads, Rail Transport, Airports, Ports, Water and Sanitation areas, Hospitals or medical centers, Telecommunication Schools, Utilities & Energy / Power, reasonable accommodation and even Prisons.

All of this is varying understanding amongst the stakeholders for what consist a public private partnership. According to the views of PPP occurs only at the time of private investments, whereas in reality PPP concludes all forms of communication between and among the private

and the government sector, right from the discussion or decision conversation to the private provision of assets and services to be rendered.

Government of india is committed to perk up the economic quality and socio infrastructural services across the country. This aim could be achieved by the help of PPPs, are it’s a way to bind the investment of public and private sectors in combination of their operational efficiency in terms of civic possessions and services.

Over the years an elaborate network for PPPs has developed, including developers, organizations, equity sources, investors, guiding principle and measures. Therefore to observe the share in growth and the same as expected in the coming future. .

As considered by Treasury publications vide financing infrastructure projects, if compared with conventional procurement contracts, P3 contracts are typically much more complex. This is primarily because of the must to anticipate all probable contingencies that could arise in such long-term contractual relations. Each of the parties that bid for a project spends considerable resources in designing and evaluating the project prior to submitting a tender.

Dieter Katz also analyzed that there are typically very significant legal costs in contract conciliation. Having several bidders do this involves a cost which can add up in total to tens of millions.The estimation of total tendering costs equals to around 3% of total project costs in contrast to around 1% for conventional procurement. The cost of both successful as well as unsuccessful bids sums up in effect built into total cost of project.