PPP: Why they fail and how to make them work

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Nov 22, 2014 03:18 IST

The government and private players should aim to create a “Brand India” to help revive the public-private partnership (PPP) model in the country, said Rana Kapoor, the founder and managing director of Yes Bank, on Friday.

Speaking at the Hindustan Times Leadership Summit, Kapoor pointed out several impediments in the way of successful PPP projects such as difficulty in acquiring land, overbidding during auctions and the absence of an independent regulator.

As a result of such problems, over 75% of the $225 billion dollar PPP investment in India between 2007 and 2012 did not reach fruition.

The session on ‘PPP: Why they fail and how to make them work ‘ evoked strong support for reviving the model, introduced in the country about 15 years ago.

Initiating the debate, R Sukumar, Editor, Mint, highlighted the need to promote PPP by examining niche areas with a specific focus, such as tourism, so that such partnership projects are not restricted to infrastructure alone.

The PPP model didn’t push India into the big league due to problems like land acquisition and the way these projects were structured, said Sukumar.

Shifting targets and other impediments had stalled the development of over 900 PPP projects in India, despite a projected spending of $1 trillion in such projects in the 11th five-year plan, said Kapoor.

He also lamented the fact that banks were lending their names to big-ticket projects without examining proposals in detail. “There has been an immense deficit in learning how to do project financing in India, but the solution lies in converting challenges into opportunities,” he said.

But Kapoor appeared confident about the future of this model in tourism.

“Tourism is critical in India. It is going to be one of the important PPP projects in terms of job creation, to reflect India’s heritage,” he said.

The debate also examined the success of tourism in the United States and the creation of a Brand USA.

Panelists highlighted the active role of the US government and private players in realising the advantages of a shared vision to bring benefit to all, and understand the importance of involving all stake holders in each sector.

“The Congress and the private players realised that it (tourism) can bring economic benefit, and all of us worked together,” said Christopher L.Thompson, President and CEO of Brand USA, who was part of the panel.

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