The Hindu Business Line : Public-private partnership ideal for core sector: Experts

ASIA, where Government played major role in infrastructure development, had a rich potential to adopt public-private-partnership (PPP) to reduce financial and management risks and provide a modern and cost effective delivery system to consumers.

Involvement of private sector is still slow as compared to the UK and even Latin America. UK has 550 projects under PPP, while 250 more are on the anvil in the next five years, underlining the country's successful experiment with the private participation in infrastructure.

Making a presentation on the advantages of PPP, Mr Sanjay Nayar, CEO, Citigroup, which had helped with financial assistance to projects developed on this model in Europe and Latin American countries, said India's case was as relevant with its huge potential in this sector.

In his presentation at the CII-Suminfra 2004, the CII-sponsored summit on infrastructure in the southern States, he said that unless stable macro-economic polices were in place, it would be difficult to attract private sector investment in infrastructure. He said PPP would work well under a structured single purpose special purpose vehicles for projects.

Risk sharing by public and private partners through a viable mechanism of concession and levying of commensurate user charges, was key to evolving a sustainable PPP model.

In his keynote address, Mr A. Ramakrishna, Deputy Managing Director L&T EEC Division, said that with the Centre's move to bring in a Model Municipal Act and guidelines to enable local bodies to modify by-laws to enable private investment in infrastructure, suitable PPP model could be evolved.

PPP had made headway in roads projects, particularly in developing and modernisation of national and state highways, Mr Ramakrishna said, adding that ports and rural infrastructure too should be brought into its fold for faster implementation of projects.

Earlier, Mr Geoff Gosden, Resident Manger, United Utilities of UK narrated his company's experience in Manila (Philippines) water project which made a breakthrough by increasing its coverage of consumers to 83 per cent from 23 per cent in seven years since it was awarded the bid under PPP.

It also managed to reduce the non-revenue water connections drastically from 63 to 49 per cent and introduce best practices of a corporate to help the local agency with modern delivery system to improve its earnings.

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