A study of environmental constraints faced by Public Private Partnership (PPP) in India and the road to a framework for successful implementation of PPP project

Authors

M.S. Khan, Babasaheb Bimrao Ambedkar University, Lucknow, India

Abstract

Infrastructure development is the key to continued and sustainable growth for any developing economy of the world in general and India in particular. It will make India globally stable, sound, prosperous, competitive, raise standard of living, enhance profits for government and private sectors, bridge rural-urban gap and simultaneously will help in increasing the number of employment opportunities. The most vital criteria for a continued growth rate of an economy lie on the provision of a high and rich quality of infrastructure. As per the statement of planning Commission, an approximation of 8 percent of the Gross Domestic product (GDP) need to be invested in infrastructure in order to give Indian economy a mega boost. For meeting such a huge demand, it is quite natural to Promote Public private partnership (PPP) at continuous basic on all levels. Up gradation of all modes of transport (Roads, Railways, Air, Sea), Power and urban infrastructure is therefore seen as critical and important element for sustaining India’s economic growth along with improved quality of life, increase in employment opportunities, and progress toward the alleviation of poverty. However information project are always critical and complex, capital Intensive, time consuming, need high class of skill and resources. Infrastructure project are characterized by non-recourse or limited recourse financing, i.e. lender can only be repaid from the revenues generated by the project. The scale and complexity of an infrastructure project financing a touch challenge. This challenge is further compounded by a combination of high capital costs and low operating costs which implies that initial financing costs are a very large proportion of the total costs. Infrastructure project financing call for complex and varied mix of financial and contractual arrangements amongst multiple parties including the project sponsors, commercial banks, domestic and international financial institutions (Fls), and government agencies. Infrastructure project involve a variety of environmental constraints which includes financial, regulatory, institutional and fiscal constraints. These constraints need to be addressed by the central and the state government through a proper regulatory framework, guidelines and policies and taking measures to overcome the various constraints faced by PPP’s if India has to become a developed country through consistent economic growth supported by robust infrastructure system. This paper attempts to find out the way and means to upgrade the infrastructure and bridging the gap between public and private sectors.

Keywords

Public Private Partnership (PPP), Constraints, Regulatory framework, GDP

DOI

https://doi.org/10.54784/1990-6587.1225

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Khan, M. (2014). A study of environmental constraints faced by Public Private Partnership (PPP) in India and the road to a framework for successful implementation of PPP project. Business Review, 9(1), 14-32. Retrieved from https://doi.org/10.54784/1990-6587.1225