Both central government and the states are aiming to use public private partnerships (PPPs) more intensively to help meet gaps in the provision of basic services. India has seen real progress over the last 10 years in attracting private investment into the infrastructure sectors, first in telecommunications, and now in ports and roads, and in individual projects in other sectors. There is the potential for PPPs to contribute more and help meet the infrastructure gap in India. But PPPs are not a panacea. They represent a claim on public resources that needs to be understood and assessed by the government, and are often complex and long-term transactions in which mistakes in design can be costly.
The Department of Economic Affairs (DEA) asked the World Bank to provide recommendations on how capacities for identifying, procuring and managing PPPs could be further developed in India. Of particular focus is the possible role of the central government in developing these capacities. We look at both organizational and individual capacities, the former including policy and legal frameworks, and institutions and processes.
For the purposes of this report, we concentrate on projects where private investment has been made, and where the government is either the purchaser of services under the project, or where it provides a financial contribution through direct investment or through risk bearing. The main sectors of focus are transportation (ports, airports, roads, and rail), water and sanitation and other urban infrastructure (solid waste management, light rail, bus terminals).