National Public Private Partnership Policy

Draft for consultation

Department of Economic Affairs

Ministry of Finance

Government of India

2011

Preamble  

1 Government of India is committed to improving the level and the quality of economic and social infrastructure services across the country. In pursuance of this goal, the Government envisages a substantive role for Public Private Partnership (PPPs) as a means for harnessing private sector investment and operational efficiencies in the provision of public assets and services.  

2 India has already witnessed considerable growth in PPPs in the last one and half decade. It has emerged as one of the leading PPP markets in the world, due to several policy and institutional initiatives taken by the central as well as many state governments. Government of India has set up Public Private Partnership Appraisal Committee to streamline appraisal and approval of projects. Transparent and competitive bidding processes have been established. To provide a broader crosssectoral fillip to PPPs, extensive support has been extended through project development funds, viability gap funding, user charge reforms, provision of long tenor financing and refinancing as well as institutional and individual capacity building. PPPs are now seen as the preferred execution mode in many sectors such as highways, ports and airports. Increasingly, PPPs are being adopted in the urban sector and in social sectors. Over the years an elaborate eco-system for PPPs has developed, including institutions, developers, financiers, equity providers, policies and procedures.  

3 The growing PPP trends, especially in the last decade, justify the need for a broad policy framework that sets out the principles for implementing a larger number of projects across diverse sectors to complement the inclusive growth aspirations of the nation. The National PPP Policy seeks to facilitate this expansion in the use of PPP approach, where appropriate, in a consistent and effective manner, through:

i. Setting out the broad principles for pursuing a project on PPP basis;  

ii. Providing a framework for identifying, structuring, awarding and managing PPP projects;  

iii. Delineating the cross-sectoral institutional architecture and mechanisms for facilitating and implementing PPPs.  

iv. Standardising some of the vital interpretations and processes of PPP so that a clear and consistent common position is adopted in key issues.  

v. Identifying the next generation issues to mainstream, upscale, broaden and expedite PPPs.  

4 The Policy aims to assist the Central and State government agencies and private investors seeking PPP opportunities in:  

i. undertaking PPP projects through streamlined processes and principles;  

ii. ensuring that a value-for-money rationale is adopted with optimal risk allocation in project structuring with life cycle approach;  

iii. developing governance structures to facilitate competitiveness, fairness and transparency in procurement; and  

iv. attaining appropriate public oversight and monitoring of PPP projects.

Public Private Partnership policy expansion and standardisation to streamline project identification, structuring, procurement and oversight. Public Private Partnership policy to expand and standardise PPP use for infrastructure by setting principles for project pursuit, appraisal, structuring, awarding and lifecycle management, emphasising value for money, optimal risk allocation, transparent competitive procurement and institutional measures such as appraisal committees, project development support, viability gap funding, long tenor financing and capacity building to strengthen PPP delivery and oversight.