Public Private Partnership in the Development of Rail Infrastructure
Public Private Partnership (PPP) is said to exist if private partnership ensures performance of certain functions of the facility as part of a general contract of work through guarantees regarding performance and price including contract to operate & maintain. It can start from a simple lease contract and go up to Build Own Operations (BOO), under which there is perpectual ownership of Private Party under unlimited license by government. It not only involves financing of infrastructure by private sector but may also involve private sector in conception, development, construction, operation and maintenance of infrastructure facilities including sharing of certain risks. The real challenge is in creating and sustaining a structure which caters to the needs of all the stake holders in an equitable manner so as to sustain their interest in the partnership. Private investors have definite return expectations irrespective of the business segment depending upon the riskiness of the project and their expectations have to be met adequately to maintain sustained supply of capital. Also most of the projects are likely to be implemented and managed by Special Purpose Vehicles (SPVs), which will be public limited companies incorporated under Indian Companies Act 1956. They will have to maintain their accounts under the formats prescribed by this Act. They will also approach capital markets for arranging capital (both equity and debt). IR being the sponsor of these projects will be an important partner and has to participate in all these decisions.
Topics covered in the course by experts are as below: