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PPP is not as much a funding solution, as a tool for locking in efficiency commitments: Manish Agarwal, PwC India

Manish Agarwal, partner and Leader capital project & infrastructure, PwC India, answers queries on what to expect for the road sector from Budget 2015-16

Manish Agarwal 

Manish Agarwal

There are many problems in the PPP model on structural level and projects get delayed. How can it be made more efficient? Do you think there will be some change in decision making due to Niti Aayog?
- Alok Dharpure


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There are two problems with the way the public-private partnership (PPP) model is understood in India. At a principle level, PPP is not as much a funding solution, as it is a tool for locking in efficiency commitments. The insistence on user-charge based models in the viability gap funding scheme, has made "ability to predict demand" a more important competency than "ability to deliver and operate the project cheaper, faster, better". At an operational level, governments have transferred all responsibilities onto the private sector, including those where it does not add value. The combination of these has made PPP structures high risk, and therefore attracted players with high return expectations. It is expected that Niti Aayog and Ministry of Finance would guide the respective line ministries towards PPP models with risk-return balance more suited to Infrastructure investors.

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First Published: Sun, February 08 2015. 18:12 IST