PGP 12-14 V term

IFPR: INFRASTRUCTURE FINANCING, PUBLIC

PRIVATE PARTNERSHIP AND REGUALTION
Instr!t"r : Professor V. Ranganathan.
Contact: ranga@iimb.ernet.in. Room: NF 109. Phone: 3155; M :
9! """ 1355
C"rse #es!r$%t$"n:
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6-178 ,r"'t& t*r,et3
Is In#$* re*#/ +"r PPP3 H*)e 'e (e*rnt t&e (ess"ns3
.&ere *re t&e !*%*!$t/ #e1!$ts $n G")ern*n!e3 H"'
t" t*-e t&e 0est "t "+ %r$)*te se!t"r '$t&"t ,$)$n,
$n t" !r"n/ !*%$t*($sm3
.&*t $s 'r"n, '$t& t&e P"rt se!t"r $n In#$*3 I+ *n
ent$re !"ntr/ S$n,*%"re !*n sr)$)e 0e!*se "+ ,""#
%"rt, '&/ !*n9t In#$*, '$t& * 0etter ,e",r*%&$!
("!*t$"n3
#nfrastr$ct$re Pro%ects &ere tra'itiona(() f$n'e' b) the
*o+ernment base' on the ,rinci,(e of ,$b(ic ,ro+ision &here
mar-ets fai(. Mar-ets genera(() fai(e' in infrastr$ct$re main()
beca$se of high in+estments. (ong gestation ,erio's. an' h$ge
economies of sca(e an' conse/$ent nat$ra( mono,o()
characteristics. 0ometimes there &ere a(so ris-s $nacce,tab(e to
,ri+ate sector. 1o&e+er. in recent )ears there has been
1
increasing em,hasis to b$i(' infrastr$ct$re ,ro%ects thro$gh
Public Private Partnership (PPP). ,rinci,a(() in+o-ing 2go+ernment
fai($re3 as a ca$se. b$t a(so for so$rcing ,ri+ate sector 4nances
from the mar-et an' a(so ,ri+ate sector e5,ertise. 6$e to their
inherent high ris-s these ,ro%ects are e5ec$te' thro$gh Pro%ect
Finance metho'. instea' of the tra'itiona( ba(ance sheet
4nancing. 7he -e) to the s$ccess of PPP is both a recognition that
,ri+ate sector is there to ma-e ,ro4ts. an' a(so an ob(igation to
societ) that s$ch ,ro4ts sho$(' be mo'erate. -ee,ing in min'
that the assets so create' m$st bene4t the societ) ma5ima(() b)
ma5imi8ing their $se. thro$gh a,,ro,riate tari9s. 7he ro(e of
*o+ernment in s$,,orting the ,ri+ate sector as &e(( as in
go+ernance in -ee,ing the ,$b(ic interest in +ie& is th$s critica(.
7he Co$rse co+ers the feat$res of Pro%ect Financing. e5,(ores the
agenc) costs in ,$b(ic an' ,ri+ate o&nershi,s. e5amines 'i9erent
metho's of ,ri+ati8ation an' ta-es $, a fe& case st$'ies in P$b(ic
Pri+ate Partnershi, to high(ight the nee' for management
ca,acit) in *o+ernment for s$ccessf$( im,(ementation of
#nfrastr$ct$re ,ro%ects. F$rther it goes on to 'isc$ss the ro(e an'
t),es of reg$(ation in #nfrastr$ct$re mono,o(ies.
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Journal 112 LE*r!&M, CD4-CCA5 2772
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