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Pp ps are not just a financing tool ashis sanyal


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Pp ps are not just a financing tool ashis sanyal

  1. 1. PPPs are Not Just a Financing ToolWider focus on issue of outcomes and procurement reformleads policy makers to address:– Projectised mode of Implementation & Operation,-- Better Risk Management and focus on TCO efficiencies– Sustainability - under-maintenance of public infrastructure– Value for money: optimum balance of cost and quality– Implications for institutions and processes
  2. 2. The Prime Mover for the PPP Model• Governments all over would compulsorily make economic choices based on risk- adjusted whole life costs and benefits• This is the Order of the Day as it would alter the very nature of international economic competitiveness
  3. 3. Why embark on PPP in Public Service Delivery• Improved value-for-money procurement of public services• Reform / Modernisation of Public Services• Contestability in delivery of public services• Improved transparency of costs of public services delivery• Overcome capital budget constraints
  4. 4. ICT can leverage PPP more efficiently• Relatively low EoL/EoS for ICT Infrastructure helps investors as the pay-back time is much shorter than other infrastructure projects like roads, fly-overs, etc• Private participation in ICT projects can enable scarce government resources to be used for other social services• Can improve efficiency of ICT use by bringing in innovative project design• Would delegate activities and risks to those best able to bear them – tasks and functions from outside rather than performed in-house• Sharing of knowledge, infrastructure, data• Opportunity to – Use of specialist services – Give longer term flexibility4 – Increases capabilities and capacity
  5. 5. Limitations• Limits to privatization – political, technical, commercial• Limits to concessions – affordability, commercial --regulatory, distributional• Leading to separation of capital provision and service provision• Limits to outsourcing – shorter term, weaker efficiency incentives
  6. 6. Issues in PPP• Lack of congruence of objectives• Resource Management: Human & Capital• Risk & Control• Clash of Culture• Monopoly• Information Security• Fear of Unknown
  7. 7. Conflict of Interest is not uncommon !• Between Government & Private Sector Stakeholders – Government interested in increasing cost savings with high quality of services – Private Sector interested in generating profits• However, Government should be interested in services delivered on time and expected quality (should not be concerned with ‘How’)• If Government insists on restrictions and constraints (beyond those normally required to protect assets & public safety) , commercial viability is directly challenged (increased constraints results in increased cost of service delivery)
  8. 8. Potential conflict of interest among Private Stakeholders• PPP projects require thorough legal structuring – Responsibility, liability, risks clearly assigned, allocated and integrated, as far as possible• Key Legal Agreements could be – SLA/ Concession Agreement – Design and construction contract – Equity funding agreement – Debt funding Agreement
  9. 9. Passport Seva Project : Some indicators of the dramatic improvementSl.No Item of Passport Issuance Process Existing System Proposed System 1 Time taken for Tatkaal Passport. 7 to 14 days 1 day 2 Time taken for Normal Passport. 30 to 45 days 3 days 77 3 No. of Passport outlets. 48 (including 2 to 3 in each metropolitan city) 45 minutes (anywhere 4 Waiting time to submit application 2 to 3 hours submission) No. of public dealing counters at IV 345 1250 passport outlets V Public dealing hours per working day 4 7 SLA bound Private Partner is responsible for Source: most of the improvements in to the process and the outcome
  10. 10. Benefits from MCA 21 PPP Implementation• After MCA21 rollout • Key Benefits• Online registration and • Anytime / anywhere service incorporation of companies to corporate• Simplified and easy mode of fil • Corporate centric approach ing of e-forms / returns • Increased transparency• Online registration and • Enhanced service levels verification of changes • MCA employees and devote• Centralized Data repository more time to doing value and online inspection of added tasks including data documents by public analysis • Timely grievance redressal
  11. 11. Business Model of e - Seva• 5-year BOOT Model • Revenue realization for theGovernment’s role implementation partner through transaction fee paid for each– Site preparation transaction delivered at e Seva– Cost of counter operators centers (outsourced)– CoordinationPartner’s role– Software development & maintenance– Hardware, networking, security– Consumables, power– Service deliver
  12. 12. eSeva Coordination - CSF