INTRODUCTION:

PPP is the need of hour for any developing country to achieve the target
economic growth for the welfare of its citizen. India has also set the target of 9%
of growth & is committed to remove the poverty by 2022. Alone government or
public sector cannot achieve this target without involvement of private sector.
In can be done for the following sectors:

Highways & Bridges

Seaports & Airports

Railways

Generation & Distribution of Power

Urban transport & other physical infrastructure in Urban Areas

Water supply, sewerage system, solid waste management

Infrastructure projects in SEZs

International Convention Centres & other tourism infrastructures projects.

TYPES OF PPPs:

Institutionalised PPPs: where public and private entities joins hands &
forms joint venture (JV) to carryout PPP projects to share the risk & provide
the public services on a long term basis.
Eg. Noida Toll Bridge Company (NTBC), Bangalore International Airport
Limited (BIAL).

Contractual PPPs: where facilities are extended to the private sector and
ask to design, constructs & operate the PPP project for a given period of
time is called concession period.

STAGES OF PPP CONTRACT:

Identification Stage

Development Stage

Procurement Stage

Monitoring and Controlling Stage

MODELS OF PPP PROJECT:

Build, Operate and Transfer (BOT): Under this model, private partner
design, build & operate (during the concession period) and transfer the
utility back to public sector.
Lease, Operate & Transfer (LOT): The only difference from BOT here is
that the asset is already existed, it is transferred to private sector on lease
basis for efficient operation as per agreed terms & conditions. The contract
period are for sufficiently larger period and will be transferred back to the
government upon expiry of the contract.
Build, Own, and Operate (BOO): This is similar to BOT model except
that created assets remains with the private sector.
Build, Own, Operate & Transfer (BOOT): It is different from the BOT
model in terms of residual value i.e. government take it back at
depreciated value at the end of the contract period. The contract period is
sufficient long that the private sectors have already recovered its
investment along with reasonable return.

Design, Build, Finance, Operate & Transfer/Maintain (DBFOT/M):

This is another variation of PPP where private sector assumes entire
responsibility for design, build, and finance, operate, transfer or maintain
during the concession period, where it recovers its return on investment
through concession period or annuity payments etc. Public sector only
provide guarantees to the financial institutions, help in acquiring the land
& other statutory clearances & approvals.

Joint Ventures (JVs): In this model, private sectors are encouraged to

form joint venture company (JVC) along with the public sector, where the
latter hold minority shares. The private sector design, builds, finance &
manage the whole contract. The public sector partners contribution will
be by way of share its resources at a predetermined value, whether it is
land, buildings, facility or it may contribute to the share holding capital,
assurance and guarantees etc.

Image Source: Guidelines for PPP Project, Govt. of Haryana