Infrastructure Managers and India’s PPP Trail[1]

The “Development” has become a very important buzzword in India’s policy and political conversation[2]. The availability of quality infrastructure like roads, ports, airports, water supply, sanitation, power and telecommunication is a fundamental driver for the economic development of India. Since independence, the Five Year Plans of India have been focusing on policies and financing for rapid infrastructure creation. Although, the process of infrastructure creation did not keep pace with the demand of infrastructure from growing Indian population and economic activities. The adverse impact of infrastructure backlog on India’s competitiveness in the global markets and economic well being of Indians forced policy makers to rethink the process of infrastructure delivery. Thus emerged the Public Private Partnership (PPP) model for infrastructure delivery, which intends to strike a right balance between public and private resources. The private resources like finance, advance skill sets, and faster decision making is coupled with public resources like legitimacy, legislative and institutional framework, and political and bureaucratic commitment, for delivery of quality infrastructure.

After India’s economic liberalization, the subsequent Five Year Plans gave special emphasis to the PPP model for augmenting infrastructure development. The initial experimentation with the PPP model in Indian context was fraught with many challenges and many PPP projects faced untimely exits. Although, these bitter experiences did not deter the policy makers’ resolve and commitment to the PPP model. The Central Government of India and many state governments have undertaken various reform initiatives for effective utilization of the PPP model. The private partners have also participated vigorously to grab the opportunity offered by India’s PPP infrastructure marketplace[3].

The increased pace of PPP activity in India’s infrastructure market is very likely highlighted by a report by the Economist[4]. This report puts India in the category of “developed PPP environment” and country to be watched for rapid infrastructure development with the PPP model. This report also indicates countries like Australia and the UK at the “matured PPP environment” level. These matured PPP countries have followed various stepping stones like robust institutional framework, equitable contracting mechanisms, innovative financing instruments, transparent public procurement and so on. There is an important factor underlying all these steeping stones, which is skill sets or individual capacity in both – public and private sector, to use PPP model.

[1] This article is written by Dr. Ganesh Devkar, who is Assistant Professor at the Adani Institute of Infrastructure Management, Ahmedabad, India.

[2] Bhagwati (2013) Why Amartya Sen is wrong: Jagdish Bhagwati, Live Mint, 2013.

http://www.livemint.com/Opinion/9Qzg05zypjEUbioqK9N1UM/Why-Amartya-Sen-is-wrong.html, accessed on March 19, 2014.

[3] (Ministry of Finance 2011) PPP Projects Status Report – As on July 31, 2011, PPP India Database, Department of Economic Affairs, Government of India. http://www.pppindiadatabase.com/Uploads/Status%20of%20PPP%20Projects%20as%20on%20July%2031,%202011.pdf, accessed on March 19, 2014.

[4] (The Economist 2011) Evaluating the environment for public private partnerships in Asia Pacific – The 2011 Infrascope – Findings and Methodology, Asian Development Bank. http://www.adb.org/sites/default/files/pub/2012/evaluating-environment-ppp-2011-infrascope.pdf, accessed on March 19, 2014.

The Indian scenario indicate that weak capacities for PPP procurement is a key factor, inhibiting effective utilization of PPP model for India’s infrastructure development[1]. The PPP model led to the renewed look not only towards the process of infrastructure development in India but also availability of necessary skill sets. Traditionally, infrastructure development is looked from the “engineering” lens, with lack of integration between different phases of infrastructure project lifecycle, and holistic view from the perspectives of finance, economics, public policy and risks associated with infrastructure development[2]. The PPP model changes the outlook towards infrastructure delivery with thrust on dimensions like lifecycle costing, bundling of various infrastructure delivery tasks under a single contract, customer satisfaction, financial and economic viability, focus on service delivery, stakeholder accountability, transparency and so on[3]. The professionals interested to be a part of great challenge of building India’s infrastructure, with PPP model, should be well equipped with the skill sets to understand and comprehend these dimensions. This demands for transformation of professionals to “infrastructure mangers”. The creation of talent pool of “infrastructure managers” to meet the demand and expectations of Indian infrastructure sector is a challenging task. The professionals having grit, determination, and enthusiasm to involve in the Indian infrastructure growth story are required. Along with this, the capable institutions for imparting the required skill sets and knowledge to these professionals, and transforming them into “infrastructure managers” are equally important. There is no doubt; these infrastructure mangers will chart the growth story of not only Indian infrastructure sector but also India’s economic development.

[1] Dutz, M., Harris, C., Dhingra, I., and Shugart, C. (2006). “Public-Private Partnership Units:What are they, and What do they do?”, World Bank, Washington D.C.

[2] Jorge, L. R., Carlos, A. A., and Feniosky, P.-M. (2008). “Civil Engineers in Public-Private Partnerships and as Master Planners for Infrastructure Development.” Leadership and Management in Engineering, 8(4), 276-286.

[3] Dixon, T., Daly, J., Marston, A., Pinder, J., and Pottinger, G. (2003). “Project management and the private finance initiative.” Royal Institution of Chartered Surveyors, London.