An alternate infrastructure investment frontier: Public Private Partnerships

United Nations defines public private partnerships as “innovative methods used by the public sector to contract with the private sector who bring their capital and their ability to deliver projects on time and to budget, while the public sector retains the responsibility to provide these services to the public in a way that benefits the public and delivers economic development and improvement in the quality of life”. 

Public Private Partnerships offer a unique and innovative method of onboarding private sector in the nation building exercise and in accelerating the delivery of quality public goods and services through joint enterprises, without spreading the limited available resources too thin. 

Broadly, PPPs could be categorized into Institutionalized PPPs and Contractual PPPs.  Institutional PPPs are usually a joint venture (JV) between public and private sector stakeholders to carry out PPP projects by sharing the risks and to provide public services on a long term basis. On the other hand, contractual PPPs fall under the concession model, in which case a facility is given by the public sector unit concerned to a private sector partner which usually designs, constructs and operates the PPP project for a given period of time.

The usually adopted PPP models are –

  • Build, Operate and Transfer (BOT)
    Think – National highway projects contracted out by NHAI under PPP mode
  • Lease, Operate and Transfer (LOT)
    Think – Leasing a school building or a hospital to the private sector along with the staff and all facilities by entrusting the management and control, subject to pre-determined conditions
  • Build Own, Operate (BOO) OR Build, Own, Operate and Transfer (BOOT)
    Think – BOT model, except that the ownership of the newly built facility will rest with the private party during the period of contract.
  • Design, Build, Finance, Operate, Transfer (DBFOT) OR Design, Build, Finance, Operate and Maintain (DBFOM)
    Think – Our recently awarded Ludhiana Commercial Complex cum Exhibition Center Project
  • Operations Concession
    Think – Container Freight Station being run by a contracted operator
  • Joint Ventures
    Think  – India International Convention & Expo Centre, Dwarka, New Delhi

Punjab realized the potential of having a regulatory framework to realize the PPP based infrastructure needs of the state, this led to birth of Punjab Infrastructure Development Board (PIDB). The board was established by Government of Punjab under Punjab Infrastructure Development & Regulation Act, 2002 (PIDRA) to fuel the vision of creating resilient infrastructure, bring sustainability to the provision of public services and foster innovation in the state of Punjab. It is the government’s nodal agency for implementation of Public Private Partnership (PPP) Projects in the State and acts as an enabler and a facilitator for providing level playing field for participation of National and International investors in creation of infrastructure in the State.

Since its inception, PIDB has had the privilege to ground infrastructure projects and services in the segments such as – transportation, utilities, waste management, hospitality & real-estate, and more. The key PPP projects and services awarded by PIDB in the last three years [Circa 2018 till date ] are as follows-

1. Development of Commercial Complex cum Exhibition Centre in Ludhiana on12+ Acres

2. Development and operationalization of Bus Rapid Transport System in Amritsar

3. Upgradation, Operation & Maintenance of Ran Baas, Qila Mubarak, as Heritage Hotel in Patiala

4. Operation & Maintenance of Baba Banda Singh Bahadur Memorial, Chappar Chiri – Mohali

5. Development, Completion, Operation & Maintenance of Circuit House in Amritsar

6. Operation and Maintenance of Food Court and ‘Upkeep & Maintenance of Library’ at Town Hall in Amritsar

Currently, PIDB has up its sleeves more interesting and marquee projects which are in different stages of preparation and fulfillment. These include –

1. Development of International Standard Tourism/Theme Destination in State of Punjab on Pathankot-Dalhousie Road around Ranjit Sagar Lake

2. Development of Commercial Complex cum Convention Centers in SAS Nagar(Mohali) and Amritsar

3. Implementation of QR-based Track and Trace System for liquor supply across the State of Punjab

4. Leasing of Heritage Properties in Kapurthala and Sangrur

5. Development, Operation & Maintenance of PWD Rest House, as Heritage Hotel in Patiala

6. New Medical Colleges in Pathankot

With the recent initiatives by Government of India through India Investment Grid mapping, National Investment Pipeline, Asset Monetization Schemes and further bolstering guidance via new PPP vertical under Niti Ayog, the PPP frontier is getting the much needed push. PIDB has been an experienced stakeholder in this space and Invest Punjab is its ideal partner. The synergies between the two departments will serve as the major driver for ‘ease of doing business’ in the PPP space.

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