The Practice of PPP in Urban Infrastructure

Authors: Anand Sahasranaman, IFMR Finance Foundation & Vikram Kapur
Publication: Urbanisation in India, SAGE, 2014

Introduction: It is widely acknowledged that in order to sustainably finance the quantum of investments required for urban infrastructure development in India and to bring in the expertise needed in executing complex urban infrastructure projects, substantial private sector involvement will be essential. Private sector participation in financing, creating, operating and maintaining urban infrastructure will be central to the large-scale delivery of public services in India.

Public-private partnership mechanisms are not new to India and have been used in urban infrastructure projects before. However, in view of the tremendous need for finance and capacities to undertake urban infrastructure projects in India, it is important that the expertise and balance sheets of the private sector are substantially leveraged going forward. While there are a number of concerns around the environment for private participation in infrastructure in India, there have also been innovations that, in an evolving environment, can significantly impact long-term infrastructure development and service delivery in India.

In this paper, we will use case studies to highlight the evolution of private participation mechanisms for financing, developing, managing and operating urban infrastructure and services in urban projects in India. We view the nature of private sector involvement through two prisms: (i) the mobilisation of private finance to fund public infrastructure and services; and (ii) the deployment of private sector’s technical and managerial expertise in the design and development of public infrastructure. Our objective is to the use the cases to develop a broader understanding of the nature of public participation in infrastructure projects in India and its evolution over time.

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