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DzThe illiterate of the twenty-first century will not be
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ublicrivateartnership

efinition
` artnership between a public sector entity
ponsoring
uthority and a private sector entity a
legal entity in which 5 percent or more of equity is
with the private partner/s for the creation and/or
management of infrastructure for public purpose for a
specified period of time concession period on
commercial terms and in which the private partner has
been procured through a transparent and open
procurement system.

notherefinition

public-private partnership exists when public
sector agencies federal, state, or local oin with
private sector entities companies, foundations,
academic institutions or citizens and enter into a
business relationship to attain a commonly shared
goal that also achieves obectives of the individual
partners.
Typicaluses
Contractingwithaprivatecompanyto:
` Renovate
` Construct
` Operate
` Maintain
`
nd/orManageafacilityorsystem
vhy
` Traditional funding sources are not keeping pace
with infrastructure investment needs and the
growing public demand for services.
n short,  is a tool that can help governments
meet demands for the development of modern and
efficient facilities, infrastructure and services while
providing value for taxpayers.
menefits

` xpeditedproectcompletion
` roectcostsavings
` mprovedquality
` Useofprivateresources
`
ccesstonewsourcesofprivatecapital
ectorsinwhichshavebeen
completedworldwide:
` powergenerationanddistribution,
` waterandsanitation,
` refusedisposal,
` pipelines,
` hospitals,
` schoolbuildingsandteachingfacilities,
` stadiums,
` airtrafficcontrol,
` prisons,
` railways,
` roads,
` billingandotherinformationtechnologysystems,and
` housing.
ixistincthases
1. Sector Diagnostic and Sector Road Map

2. Available PPP Options

3. Selecting the Option

4. PPP Preparatory Work

5. Implementing PPPs

6. Measuring, Monitoring, and Reporting on

Results
 1. Sector Diagnostic and Sector Road Map

2. Available PPP Options

3. Selecting the Option

4. PPP Preparatory Work

5. Implementing PPPs

6. Measuring, Monitoring, and Reporting on

Results
ectoriagnosticandector
RoadMap
Requirementsandxpectations
` Technicalssues
` Legal,Regulatory,andolicyrameworks
` nstitutionaltructuresandCapacity
` Commercial,inancial,andconomicssues
` takeholderConsultation
` ClearectortrategyandRoadMap
` Clear
overnmentCommitmentandaesignated
Champion
 1. Sector Diagnostic and Sector Road Map

2. Available PPP Options

3. Selecting the Option

4. PPP Preparatory Work

5. Implementing PPPs

6. Measuring, Monitoring, and Reporting on

Results

vailableOptions
` servicecontracts;
` managementcontracts;
` leasecontracts;
` buildȂoperateȂtransfermOTandsimilar
arrangements;
` concessions;
` ointventures;and
` hybridarrangements.
 .erviceContracts
` Scope: Multiplecontractsforavarietyofsupportservicessuch
asmeterreading,billing,etc.
` Asset Ownership: ublic
` Duration: Ȃyears
` O&M Responsibility: ublic
` hapital Investment: ublic
` hommercial Risk: ublic
` Overall Level of Risk Assumed by Private Sector: Minimal
` hompensation Terms: Unitprices
` hompetition: ntenseandongoing
` Special Features: Usefulaspartofstrategyforimproving
efficiencyofpubliccompany;romoteslocalprivatesector
development
` Problems and hhallenges: Requiresabilitytoadminister
multiplecontractsandstrongenforcementofcontractlaws
±.Managementcontracts
` Scope: Managementofentireoperationoramaorcomponent
` Asset Ownership: ublic
` Duration: ±-5years
` O&M Responsibility: rivate
` hapital Investment: ublic
` hommercial Risk: ublic
` Overall Level of Risk Assumed by Private Sector:
Minimal/moderate
` hompensation Terms: ixedfee,preferablywithperformance
incentives
` hompetition: Onetimeonly;contractsnotusuallyrenewed
` Special Features: nterimsolutionduringpreparationformore
intenseprivateparticipation
` Problems and hhallenges: Managementmaynothaveadequate
controloverkeyelements,suchasbudgetaryresources,staffpolicy,etc.
.LeaseContracts
` Scope: Responsibilityformanagement,operations,andspecific
renewals
` Asset Ownership: ublic
` Duration: - 5years
` O&M Responsibility: rivate
` hapital Investment: ublic
` hommercial Risk: hared
` Overall Level of Risk Assumed by Private Sector: Moderate
` hompensation Terms: ortionoftariffrevenues
` hompetition: nitialcontractonly;subsequentcontractsusually
negotiated
` Special Features: mprovesoperationalandcommercialefficiency;
evelopslocalstaff
` Problems and hhallenges: otentialconflictsbetweenpublicbody
whichisresponsibleforinvestmentsandtheprivateoperator
'.muild-operate-transferothersimilar
arrangements
` Scope: nvestmentinandoperationofaspecificmaorcomponent,
suchasatreatmentplant
` Asset Ownership: ublic/rivate
` Duration: aries
` O&M Responsibility: rivate
` hapital Investment: rivate
` hommercial Risk: rivate
` Overall Level of Risk Assumed by Private Sector: igh
` hompensation Terms: Mostlyfixed,partvariablerelatedto
productionparameters
` hompetition: Onetimeonly;oftennegotiatedwithoutdirect
competition
` Special Features: Mobilizesinvestmentfinance;evelopslocalstaff
` Problems and hhallenges: oesnotnecessarilyimproveefficiencyof
ongoingoperations;
5.Concessions
` Scope: Responsibilityforalloperationsandforfinancingand
executionofspecificinvestments
` Asset Ownership: ublic/rivate
` Duration: ±5Ȃyears
` O&M Responsibility: rivate
` hapital Investment: rivate
` hommercial Risk: rivate
` Overall Level of Risk Assumed by Private Sector: igh
` hompensation Terms:
llorpartoftariffrevenues
` hompetition: nitialcontractonly;subsequentcontractsusually
negotiated
` Special Features: mprovesoperationalandcommercialefficiency;
Mobilizesinvestmentfinance;evelopslocalstaff
` Problems and hhallenges: owtocompensateinvestmentsand
ensuregoodmaintenanceduringlast5Ȃ yearsofcontract
 1. Sector Diagnostic and Sector Road Map

2. Available PPP Options

3. Selecting the Option

4. PPP Preparatory Work

5. Implementing PPPs

6. Measuring, Monitoring, and Reporting on

Results
electingtheOption
` optionsavailable
` technicalconstraintsandgoalsofthesector
` legalandregulatoryconstraints
` institutionalissues
` commercial,financial,andfinancingrequirements
andconstraints
` interestofthemarket,and
` specialrequirementsofthesectorbasedon
characteristicsofthesystemorpopulation.
 1. Sector Diagnostic and Sector Road Map

2. Available PPP Options

3. Selecting the Option

4. PPP Preparatory Work

5. Implementing PPPs

6. Measuring, Monitoring, and Reporting on

Results
 reparatory vork
` stablishing
ppropriateLegal,Regulatory,andolicy
rameworks
` Technicalreparation
` nstitutionaltructuresandCapacitymuilding
r units,
r proectimplementationoffice/proectimplementation
unit,and
r technicalassistance.
r Commercial,inancial,andconomicreparation
r roectinancing
r Tariffesign
r ubsidyesign
Contdǥ.

` Labor Considerations
` ncluding Local artners
` Local private partners
` Local subcontractors
` Local government units
` takeholder nvolvement
 1. Sector Diagnostic and Sector Road Map

2. Available PPP Options

3. Selecting the Option

4. PPP Preparatory Work

5. Implementing PPPs

6. Measuring, Monitoring, and Reporting on

Results
mplementings
` Collecting eedback from otential midders
` otification and requalification
` efining the rocurement rocess
` efining the mid valuation rocess
` mid ackage
` The Contract
` egotiations and Contract tart
 1. Sector Diagnostic and Sector Road Map

2. Available PPP Options

3. Selecting the Option

4. PPP Preparatory Work

5. Implementing PPPs

6. Measuring, Monitoring, and Reporting on

Results
Measuring,Monitoring,and
ReportingonResults
` Contractmonitoringunit
` Regulator
` ndependentauditors
sinndia:resentcenario
` '   proects in the main sectors of focus where a contract has been
awarded and proects are underway.
` The total proect cost is estimated to be about Rs. ±, ±', 5.5 Crore.
` The Dzndia nfrastructure roect evelopment unddz  and
ndia nfrastructure inance Company Ltd CL) has been created.
` n terms of main types of  contracts, almost all contracts have been
of the mOT/mOOT type or close variants.
`  percent of the proects in the sample were competitively bid, with
only  percent procured either through MOUs or negotiated. n value
terms '± percent of the proects were awarded on a negotiated/MoU
basis.
` The potential use of s in e-governance and health and education
sectors remains largely untapped across ndia as a whole.
 ewinfrastructureproectswithprivateparticipationinmain
recipientsandrestofdevelopingcountries, Ȃ±



























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nvestment commitments to infrastructure proects with private
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Top byinvestmentininfrastructure Top  by new infrastructure proects with
proectswithprivateparticipationin± Î private participation in ± Î

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Investment* Share of total hountry New projects (%)
hountry (2008 US$ billions) (%)
 
 
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Conclusion
 uestionsiscussion