Building on the Foundation: The Future of PPPs in India
India saw a surge in the number of PPP projects and the amount invested during the period leading up to 2010-11. This was on the back of a rapidly growing economy and a government sensitive to creating the appropriate framework for PPPs, including institutional structures such as PPP units in the Ministry of Finance and line ministries at national and sub-national levels, mechanisms of government support such as the VGF, IIPDF and the IIFCL and the leadership to push through projects to financial close through the creation of the Committee on Infrastructure and the PPPAC. The key to success in India has been to standardize to the extent possible and to work with simple risk allocation and financing structures in most projects. However, the inability to adopt a case by case approach to risk allocation coupled with a host of governance and financing issues resulted in fewer projects reaching financial close in the last three years, some project contracts cancelled and others awaiting government’s decision on re-negotiation. A second generation of projects is emerging in several sectors which is no longer amenable to the same degree of standardization. In addition, new sectors where the old risk allocation features will not work are also emerging very fast such as the education and health sectors. The rail sector is presenting a host of untapped potential. At a stage where a large number of projects are in various stages of operation, the Government appears to be reassessing its strategy on PPP. This webinar presents an overview of some of the successes and failures in India’s PPP program and discusses the future of PPPs in India.