| FEATURES | Asset ownership during contract | PPP duration | Capital investment focus & responsibility | Private partner revenue risk and compensation terms | Private partner roles | Features, relevance in India & examples |
| MODES | ||||||
| Management Contracts | Contractual arrangement for the management of a part or whole of a public facility or service by the private sector. Capital investment is typically not the primary focus in such arrangements. | |||||
| Note: service contracts and management contracts of less than 3 years duration are not included in the definition of PPP in India | ||||||
| Management Contract | Public | Short - medium (e.g. 3-5yrs) | Not the focus Public | Low (Pre-determined fee, possibly with performance incentives) | Management of all aspects of operation and maintenance | This involves contracting to the private sector most or all of the operations and maintenance of a public facility or service. Although the ultimate obligation of service provision remains with the public entity, the day-to-day management control is vested with the private sector. Usually the private sector is not required to make capital investments. These are prevalent in India across sectors. e.g., Karnataka Urban Water Supply and Improvement Project, performance based maintenance contracts in highways. |
| Management Contract (with rehabilitation/expansion ) | Public | Medium - long | Limited Focus Brownfield (Rehabilitation / expansion Private | Medium (Tariff / Revenue share) | Minimum Capex, Management, Maintenance | This is similar to management contracts but include limited investments for rehabilitation or expansion of the facility. This mode has been adopted in the power distribution and water supply sectors e.g. Bhiwandi Distribution Franchise, Latur Water Supply Project. |
| Lease Contracts | Asset is leased by the public entity to the private partner | |||||
| Lease | Public | Medium (e.g., 10-15yrs) | Not the focus Public | High Revenue from Operations | Management and maintenance | e.g. Leasing of retail outlets at railway stations by Indian Railways |
| Build Lease Transfer (BLT) or Build-Own-Lease-Transfer (BOLT) | Private (Leased to the Government) | Medium (e.g. 10-15yrs) | Greenfield Private | Low-medium Pre-set lease from the Government. | Capex | Involves building a facility, leasing it to the Govt. and transferring the facility after recovery of investment. Primarily taken up for railway projects such as gauge conversion in India in the past, with limited success. |
| Build-Transfer-Lease (BTL) | Public | Medium (e.g., 10-15yrs) | Greenfield Private | High Revenue from User Charges | Capex& Operation | Involves building an asset, transferring it to the Govt, and leasing it back. Here the private sector delivers the service and collects user charges. |
| Concessions | Responsibility for construction (typically brownfield / expansions) and operations with the private partner while ownership is retained by the public entity. | |||||
| Area Concessions | Public | Long (e.g. 20-30 yrs) | Brownfield/ Expansions Private | High Tariff revenue | Design, finance, construct, manage, maintain | Herein the private sector (concessionaire) is responsible for the full delivery of services in a specified area, including operation, maintenance, collection, management, and construction and rehabilitation of the system. Importantly, the operator is now responsible for all capital investment while the assets are publicly owned even during the concession period. The public entity's role shifts from being the service provider to regulating the price and quality of service. For example, water distribution concession for a city or area within the city. |
| Build-Operate-Transfer Contracts | Responsibility for construction (typically greenfield) and operations with the private partner while ownership is retained by the public entity. | |||||
| Design-build-operate (DBO) | Public | Short-medium (e.g. 3-5 yrs) | Greenfield Public | Medium-High Tariff revenue | Design, construct, manage, maintain | Not very common in India. Typically financing obligation is not retained by the public entity. |
| Build-operate-transfer (BOT)/ Design-Build-Finance-Operate-Transfer (DBFOT) | Public | Long (e.g. 20-30 yrs) | Greenfield Private | High Tariff revenue | Design, finance, construct, manage, maintain | Most common form of BOT concession in India. e.g. Nhava Sheva International Container Terminal, Amritsar Interstate Bus Terminal, Delhi Gurgaon Expressway, Hyderabad Metro, Salt Lake Water Supply and Sewage Disposal System. |
| Build-operate-transfer (BOT) Annuity | Public | Long (e.g. 20-30 yrs) | Greenfield Private | Low Annuity revenue / unitary charge | Design, finance, construct, manage, maintain | This has been adopted for NHAI highway projects in the past. More recently, it is the preferred approach for socially relevant projects where revenue potential is limited. e.g. Tuni Anakapalli Project, Alandur Underground Sewerage Project |
| Build-own-operate Transfer (BOOT) Contracts | Private partner has the responsibility for construction and operations. Ownership is with the private partner for the duration of the concession. | |||||
| Private | Long (e.g. 20-30 yrs) | Greenfield Private | High Tariff revenue | Design, construct, own, manage, maintain, transfer | Most common form of BOOT concession in India. For example, Greenfield minor port concessions in Gujarat are on a BOOT basis. | |
| Build-own-operate (BOO) | Private | Perpetual | Greenfield Private | High Tariff revenue | Design, finance, construct, own, manage, maintain | Under this structure the asset ownership is with the private sector and the service / facility provision responsibility is also with the private sector. Not common in India. |