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Public-Private Partnerships

Objectives

The Public Private Partnership (PPP) Vertical is actively working towards deepening the reach of public-private partnerships as the preferred mode for implementation of infrastructure projects. It seeks to create timebound world-class infrastructure and attract private-sector and institutional capital in infrastructure.

Core Functions

The Vertical makes policy-level recommendations for institutional, regulatory and procedural reforms, and works towards the standardisation of PPP documents. It also provides transaction structure guidance to implementing agencies, evolves suitable reforms and policy initiatives for consideration of the Government, and appraises PPP projects.

 

The Vertical also develops concession agreement guiding principles and/or model concession agreements in different sectors, and reviews and provides comments on Central Government PPP projects via the PPPAC and/or SFC process.

 

Various path-breaking initiatives aimed at promoting private and foreign direct investments in the infrastructure space were undertaken last year.

 

Who’s Who

Sl.No Name Designation Email
1 Mr Ch. P. Sarathi Reddy Adviser Ps.reddy@gov.in
2 Ms Alpna Jain Senior Specialist Jain.alpna@gov.in
3 Ms Nidhi Arora Consultant Arora.nidhi@nic.in
4 Mr Sujit Kumar Jena Senior Associate Sujit.jena@gov.in
5 Mr R.K. Bhatheja Economic Officer Rk.bhatheja@gov.in
6 Mr Aditya Kaushik Young Professional Aditya.kaushik@nic.in
7 Ms Manpreet Kaur Young Professional k.manpreet@govtcontractor.in
8 Ms Anwesha Das Young Professional  

Partners

  • Central Ministries and Departments
     
  • State Governments
     
  • Statutory Bodies
     
  • Private Players
     

Line Ministries

  • Department of Economic Affairs, Ministry of Finance
     
  • Department of Expenditure, Ministry of Finance.
     
  • Department of Investment and Public Asset Management, Ministry of Finance
     
  • MoRTH
     
  • MoR
     
  • MoSPW
     
  • MoCA
     
  • MoP
     
  • Other Central Ministries and Line Departments
     
  • Central and State Public Sector Entities and Enterprises

 

Report (2020-21)

Appraisal of Central Government PPPs by Public Private Partnership Appraisal Unit (PPPAU)

 

During 2020–21(1 April 2020 to 31 March 2021), 125 PPP projects, with a total cost of Rs 1,72,314 crore, were appraised by the Vertical. This includes 123 Central Government projects and two State projects. The sector-wise distribution of the PPP projects (including the projects under the VGF scheme) appraised is given in the table below:

S. No. Project Appraised No. of Projects Total Cost (Rs. In Crores)
1 Roads 69 63,279
2 Ports 12 3,359
3 Eco Tourism 10 2,232
4 Silos 1 401
5 Petroleum Reserves 4 27,728
6 Ropeway 1 996
7 Telecom 9 29,199
8 Railway Stations 6 7,600
9 Railway Passenger Trains 12 30,099
10 Metro 1 7,420
  Total 125 1,72,314

Major Projects

1. National Programme on Advance Chemistry Cell Battery Storage

NITI Aayog has formulated the contours of the National Programme on Advance Chemistry Cell Battery Storage. The programme pertains to the provision of suitable fiscal incentives and a single-window framework to facilitate investment into 50 GWh of the domestic advance cell manufacturing industry. India’s accelerating progress in EVs and renewable energy deployment necessitates the facilitation of investments in such giga factories to indigenise battery production and partake in a sunrise industry. This will also enable less import dependence and secure the future of energy and transport sectors in India. The Union Cabinet recently approved the PLI scheme for 10 sectors. ACC battery was one of the sectors identified for inclusion in the PLI scheme for enhancing India’s manufacturing capabilities and exports under the vision of ‘Aatmanirbhar Bharat’.

 

2. Redevelopment of Railway Stations through Public-Private Partnership

NITI Aayog has been working closely with the Ministry of Railways in fast-tracking the railway stations’ redevelopment programme across the country. As part of this endeavour, consultations have been undertaken with various stakeholders for evaluation and redressal of challenges. A self-sustainable PPP-based model for development of world-class stations has been finalised and approved. NITI Aayog helped the Ministry of Railways to finalise the concession terms and bidding documents for the same, based on which bidding processes for 10 stations were initiated in FY2020–21.

 

3. Passenger Train Operations by Private Sector through Public-Private Partnership

NITI Aayog, along with the Ministry of Railways, is spearheading landmark reforms in the passenger train operations’ space through the PPP mode. Private participation in sourcing and operation of modern technology trains for better passenger experience is one such initiative. NITI Aayog supported Railway Ministry in the end-to-end process for the project, including conceptualisation, transaction structuring, finalisation of concession terms, preparation of bid documents, and stakeholder consultations. Pursuant to such efforts, the bidding process for 12 clusters on 109 origin destination pairs involving 150 trains has been initiated.

 

4. Eco-Tourism Facilities through Public-Private Partnerships

As part of NITI Aayog’s initiative for holistic development of islands, the bidding process for the development of sustainable eco-tourism projects in seven islands of Andaman and Nicobar and Lakshadweep has been undertaken. Several other islands have also been identified for development under the second phase of the project. To effectively facilitate development of such eco-tourism facilities, a model concession agreement has been formulated that can be suitably adopted for such projects. During the last fiscal, the bidding process for eco-tourism facilities for four islands in Andaman and Nicobar was undertaken. The vertical provided the required support to the UT administration in engaging consultants through competitive bidding for holistic master planning of the islands and timely structuring of PPP transactions.

 

 5. Redevelopment of Jawaharlal Nehru (JLN) Stadium on PPP Mode

During 2020–21, NITI Aayog worked closely with the Ministry of Youth Affairs and Sports in finalizing the strategy for redevelopment of the JLN stadium in Delhi. The project is to be executed through PPP by leveraging the mixed-use/real-estate development potential available around the stadium. The key objectives of this project are to promote the holistic development of the stadium and develop the unutilised/underutilised spaces for complementary commercial activities to maximise revenue streams. NITI Aayog, along with the Ministry of Youth Affairs and Sports, undertook pre-feasibility analysis of the project to assess viability and initial feasibility through the PPP mode. NITI Aayog is assisting the Ministry of Youth Affairs and Sports in the preparation for the launch of the transaction.

 

6. Setting up Integrated Schools for Sports and Academics at Sports Authority of India (SAI) Centres through Public-Private Partnerships

During 2020–21, NITI Aayog supported the Ministry of Youth Affairs and Sports to develop a PPP framework for establishing and operating integrated schools for sports and academics for students from classes 6–12 at select centres of the Sports Authority of India. SAI operates several schemes for identification and development of young talent. Under the existing schemes and arrangements, students who undergo rigorous coaching in sports find it challenging to balance academics and sports in the traditional education system. The existing educational curriculum and systems do not provide enough flexibility to balance sports and academics. Hence, there is a need to integrate sports and education to encourage and nurture students who can achieve academic goals while also getting trained and pursuing excellence in sports. Such integrated schools will create a vibrant student community by offering an academic system built around sports, with the objective of all-round development of students. A concept note has been developed by NITI Aayog detailing the PPP framework, which is under consideration of the Ministry.

 

7. Development of Serviced Hostels at SAI Centres under Public-Private Partnership Mode

During 2020–21, NITI Aayog worked with the Ministry of Youth Affairs and Sports in developing a PPP framework for setting up serviced hostels with three-star facilities for Sports Authority of India. SAI operates several schemes to support and nurture sporting talent and provides athletes with the requisite infrastructure, coaching and competition exposure. As part of these efforts, SAI is in perennial need for boarding and lodging services. With a view to provide best-in-class boarding and lodging facilities, SAI wants to undertake the development of fully serviced, purpose-built hostel complexes within the campuses of its training centres through PPPs. A concept note has been developed by NITI Aayog detailing the PPP framework, which is under consideration of the Ministry.

 

8. Ropeway-Based Public Transportation System on PPP Mode

NITI Aayog commissioned pre-feasibility studies for the development of ropeway-based public transport systems in Gangtok and Aizawl through the PPP mode during 2020–21. Scarcity of land in urban centres of hilly areas, along with steep road gradients limiting road expansion, is a major constraint in the development of public transport infrastructure. This creates pressure on the public transport system, with most commuters relying on taxis or private vehicles to commute. A need for a planned public transport system was felt for cities such as Gangtok and Aizawl. Citing this need, NITI Aayog undertook pre-feasibility studies to assess the viability and initial feasibility through the PPP mode. NITI Aayog also prepared a model concession agreement for the development of ropeway projects through the PPP mode. Pursuant to these efforts, the Gangtok project was structured on PPP mode.

 

9. Scheme for Inviting Private Investment in Medical Education

To address the shortage of qualified medical professionals, general practitioners as well as specialists, a scheme for attaching an existing district hospital and developing a medical college through the PPP mode has been developed by the vertical. The unique PPP framework allows for synergy between the private and public healthcare sectors, capitalizing on their respective strengths. The public sector has functional hospitals with rich clinical material, but lacks adequate resources, infrastructure and faculty base required for a medical college. The private sector on the other hand has investible capital, resources, required infrastructure and faculty, but lacks functional hospitals with the requisite clinical material (required as per the extant regulations). Accordingly, a PPP framework has been formulated that combines a Government District hospital with an affiliated academic institution developed by the private partner. Under the proposed model, the District hospital also gets augmented into a teaching medical college as per the Government of India’s stipulated medical education regulatory norms with private sector investment. The combined project is to be operated and maintained by the private partner, as per the applicable norms, governed by a detailed concession agreement. The Vertical has developed the model concession agreement and model RFP for medical education during the last fiscal, a copy of which can be accessed from the NITI Aayog website.

 

10. Enhancement in Viability Gap Funding for Social Sector

Social infrastructure projects face viability concerns. Therefore, to boost private investments
in social sector infrastructure such as schools and hospitals, enhancement in VGF allocation for social sector projects was approved by the Ministry of Finance in the last fiscal. The PPP vertical worked in close coordination with DEA, Ministry of Finance, in revising the guidelines as part of this strategic revamp of the VGF scheme. Under the scheme, the PPP projects will be proposed by Central Ministries, State Governments, and statutory entities, and VGF of up to 30%, revised from the earlier limit of 20%, will be provided under the scheme for social sector infrastructure projects. This path-breaking reform will benefit PPP projects and provide a boost to private sector investment in social sector infrastructure creation. The revised guidelines for the scheme have been issued by DEA to the various Ministries and States in the last fiscal.

 

11. Structuring of BharatNet on PPP Mode

During 2020–21, NITI Aayog, along with Department of Telecommunications (DoT) finalised the strategy for implementing the BharatNet project through PPP mode. Phase I of the project has already been implemented, while Phase II, which is currently under various stages of implementation, is proposed to be completed through PPP. This will enable leveraging of infrastructure already created by the Government, while capturing the private sector efficiencies, quality and investment for incremental development and impact. NITI Aayog, along with DoT, undertook detailed analysis of various aspects of the project to arrive at an optimal and commercially viable PPP structure. The structure was then deliberated upon and finalised based on inputs of various committees, investor interactions and stakeholder consultations. Bid documents have been prepared and finalised with support from NITI Aayog. The project, which is proposed to be awarded through a single-stage competitive bidding process, has been submitted for PPPAC approval.

 

12. Public-Private Partnership in Space Sector

Opening up of the space sector to substantial private sector participation was recently approved by the Union Cabinet. During 2020–21, NITI Aayog engaged with the Department of Space for exploring PPP models for an accelerated roll-out of new space infrastructure and technologies. Various self-sustainable structures for building and maintenance of satcom assets through private sector participation were conceptualised by NITI Aayog. These have been shared with the Department of Space for further deliberations/inputs. Recommendations for institutionalizing appropriate PPP policies, extensive participation of entities like New Space India in such models and suitable handholding of the Department for undertaking these projects have been ensured. Leveraging the private sector’s reach, funding and capabilities reduces Government support for expansion of the space sector while ensuring innovations, global arrangements, flexibility, and efficiency.

 

13. Development of Strategic Petroleum Reserve Facilities (Phase II) on Public Private Partnership Mode

During 2020–21, NITI Aayog supported the Indian Strategic Petroleum Reserves Limited (ISPRL) for implementing phase II of the strategic petroleum reserve through PPP. ISPRL is developing the strategic petroleum reserve of 6.5 million metric tonne at Chandikhol in Odisha and Padur in Karnataka. The project will augment India’s energy security and serve as a cushion during any supply disruption. Phase I of the facilities have already been implemented, while phase II is now proposed to be taken up through PPP. NITI Aayog has actively worked with ISPRL and MoPNG for structuring and launching the project on PPP mode for bidding.

 

14. Asset Monetisation Programme

Investment-led growth is central to the economic agenda of the Government. One of the prerequisites of such growth is capital and asset recycling. In this context, asset recycling and monetisation holds the key to value creation in infrastructure—by unlocking value from public investment and tapping into private-sector efficiencies in delivering infrastructure.

 

NITI Aayog is steering the recycling and monetisation of various core infrastructure assets. Continuing the progress achieved during FY20, during the last fiscal, further ground was covered in creating an asset pipeline and rolling out infrastructure assets through structured transactions. Notable achievements during the period are as under:

 

  • In the first phase, six AAI airports were successfully awarded at no financial implication to the Government Exchequer, leading to enhanced revenues to AAI.
     
  • Toll-Operate-Transfer-based concessions were successfully bid out, with an encouraging response from the market. Two bundles have been awarded successfully. The structure has been appreciated by the market and has seen active interest and participation from infra-funds, along with developers.
     
  • InvITs have emerged as preferred investment structures for long-term institutional investors. Monetisation of public toll roads as well as transmission towers is in advanced stages of planning through InvIT-based structures.
     
  • Railways launched the strategic foray into PPP for private participation in running of passenger trains. The first batch of clusters envisages private train operations on 109 pairs of routes structured as 12 clusters with a targeted private investment of Rs 30,000 crore.
     
  • The station redevelopment programme of the Railways has seen significant scale and progress with the launch of RfQ for 10 stations. Extensive stakeholder consultations have been taken up to bring clarity in the project structure and formulation of the model bid documents.
     

So far, a pipeline of core assets, comprising over 100 falling in 31 broad asset classes, mapped to 10 Ministries/CPSEs and tentatively valued at Rs 5 lakh crore, has been developed. NITI Aayog has sought information from the ministries to create a four-year monetisation pipeline. Some of the potential asset classes that have been identified are toll road bundles, ports, cruise terminals, telecom infrastructure, oil and gas pipelines, transmission towers, railway stations, sports stadium, warehouses, and commercial complexes. Consultations with the respective ministries on possible investment structures are being undertaken.

 

15. Review of National Infrastructure Pipeline (NIP) Projects

The Government had launched the National Infrastructure Pipeline, envisaging Rs 111 lakh crore investment in infrastructure between 2020–25. In this regard, the Hon’ble Finance Minister approved the constitution of a taskforce, of which NITI Aayog is a member. The taskforce interacted with various stakeholders, including Central line ministries, departments, agencies, CPSEs and State-level organisations to understand and collate information regarding the future investment pipeline in infrastructure. NITI Aayog steered the interaction with State Governments and made recommendations for various structural reforms required to facilitate investment into infrastructure. During 2020–21, the final report of the taskforce was launched. As part of the final report, the taskforce on NIP recommended many reforms in the areas of general contract and project management. As part of the committee of secretaries, NITI Aayog actively oversees the progress of projects enlisted in NIP and provides policy-level guidance on issues from time to time.