The PPP (public-private partnership) movement in Indian infrastructure began in 1996 when a panel of experts on the commercialization of infrastructure projects, chaired by Dr Rakesh Mohan, submitted a groundbreaking report advocating the involvement of private capital. Even then, the report emphasized the need for the various risks of a project to be “clearly delineated and assigned to different stakeholders”. This was a premonitory warning from the committee, but unfortunately successive governments have largely ignored it.

Following this report, the year 1997-98 saw the materialization of a whole series of PPP activities. These included the establishment of the Infrastructure Development Finance Corporation, Telecommunications Regulatory Authority of India, Tariff Authority for Major Ports, Electricity Regulators, National Authority for India’s highways and involved supervision of the Planning Commission.

Indeed, the share of private capital in infrastructure investments rose from 22% in the period of the 10th Plan (2002-07) to 37% in the 11th Plan (2007-12), with aspirations to increase it to 48%, had there been a 12th Plan. Lately, it has stagnated at around 3 trillion rupees a year, less than 20% of total investment. The reason why PPPs started to fall from 2012 has been analyzed in depth. By the time the NDA government came to power in 2014, they saw a devastated PPP playing field. FM Arun Jaitley’s first budget in July 2014 proposed the establishment of an institution called ‘3P India’ with an allocation of Rs 500 crore to address complex PPP issues. A committee headed by former Finance Secretary Vijay Kelkar presented its report, “Revisiting and Revitalizing PPP Model of Infrastructure Development”, on November 19, 2015, and approved the establishment of 3P India.

Now PPP is back in the calculation. 100% of the national monetization pipeline target of Rs 6 trillion and 40% of the national infrastructure pipeline target of Rs 111 trillion are expected to be financed under PPP formats. This is targeting around 50 trillion rupees of private capital over the next five years.

It is certainly a challenge. Getting correct DPI models is never easy. In 2021, Britain announced the “renationalisation” of British Rail after a 25-year run on what was believed to be a landmark PPP initiative.

Indian Railways has also struggled to get PPP initiatives off the ground.

It must be recognized, however, that in sectors such as telecommunications, ports, airports, electricity transmission and renewable energy, PPPs have continued to bear fruit, overcoming many adversities along the way.

In her February 1, 2022 budget speech, Finance Minister Nirmala Sitharaman emphasized capacity building measures. Following this, in July, the Ministry of Finance announced the establishment of the Infrastructure Finance Secretariat, which is expected to play a definitive role in reviving the PPP ecosystem.

Under the current mantra of public funds to build greenfield projects and private capital to “monetize” brownfield operating assets, PPP may well see a revival in a modified avatar.

The author is the founder and administrator of the Infravision Foundation.