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P. BharathiSenior Faculty Member

Dr. MCR HRD Institute

PUBLICPRIVATE

PARTNERSHIP-SEZ

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Infrastructure constraints are most binding on

manufactu r ing - part icular ly, expo rt-or iented

manufactur ing.Ind ia is well-placed to have a much more

signi f icant presence in the wo r ld market for

exports...........

wh i le Ind ia is w ell placed in terms of industr ial

experience, techn ical capacity and avai lable

labour, infrastructure hinders Indias success in

global trade.

India : Inc lusive Grow th and Service Delivery,

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Origin & History of SEZs

EPZs (Export Processing Zones) andFree Trade Zones (FTZ) SEZsOne of the earliest & most famous

SEZs were founded by China underDen Xiaoping in the early1980s

Today the most prominent SEZs in

China are in the district of ShanghaiIndias first EPZ was set up in Kandla

(Gujarat) in 1965 followed by

Santacruz (Mumbai) in 1973

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Integrated Infrastructure

Special Economic Zone

Model

IndustrialTownship

ExcellentInfrastructure SuperiorGovernance

Facilitative

EnvironmentFree

Port

What is Special Economic Zone?

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Special Economic Zone

Special Economic Zones are the Specially designed , designated& Notified Duty-free, Tax-free , Hassle-Free Enclaves Offeringworld class Industrial Infrastructures for Development ofInternational Business

Special Economic Zones are Developed by Public as well asPrivate Developers Or Even in Joint Sectors

Special Economic Zone Scheme in India had been introduced in2001

Special Economic Zone Act , 2005 and Special Economic ZoneRules, 2006 become operational since Feb. 10, 2006

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Special Economic Zones

Benefits & Incentive

Corporate Tax / Income Tax Holiday for 15

Financial years Duty-free and Tax free Enclaves through out

stay in SEZ

Minimum Government Interference

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Strengths

Public sector

Legal Authority

Protection of Procurement Policies Broad prospective / balance among the

competing goals to meet public needs

Dedicated personnel

Capital resources

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Why Private Sector in

State Monopolies ?

External Factors Internal Factors

Rapidly expanding urban

population

Need for expansion of existingsanitation

Demand for expansion of

existing energy

Increasing need for theexpansion of existing urban

infrastructure

Service conditions are

poor. Major sector of

urban populationremains unnerved.

Tax revenues dont

provide sufficient

resources expansion ofexisting energy

Private sector can provide alternate resources of finance,

technical excellence and support to the Government.

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Private

Sector

Participation

Private

Finance

Initiatives

Public Private Partnership

Ways of help from

Private Sector

Private

Sector

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The Positives

Private sector participation

Innovative finance Technical Knowledge

Managerial efficiency

Entrepreneurial spirit

Operating efficiency

Large scale capital

Enhanced social responsibility

Environmental awareness

Better responsiveness to consumer needs and

satisfaction.

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Public Private Partnership

The term describes

a spectrum of

possible

relationships

between public and

private actors for

cooperativeprovision on

infrastructure

services.

The Private Actors

Private BusinessHouses.

Non Government

Organizations (NGOs).

Community Based

Organizations (CBOs).

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Why Public Private Partnerships?

Traditional Procurement

Inefficient

Unreliable

Poor fiscal Management

Other factors

Short political tenures

Rent seeking behavior

Need for improvements

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Financial need - budget deficit, large

debt

Aging or deteriorating infrastructure Growing demand on public sector

services

Search for greater efficiency andcreativity

Strides to introduce competition

Lack of domestic experience or skills

Why Public Private Partnerships?

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maximizing the use of each sectors strength

reducing development risk

reducing public capital investment

mobilizing excess or underutilized assets

improving efficiencies / quicker completion

better environmental compliance

improved services to the community improved cost effectiveness

sharing the available resources productively

sharing risks

mutual rewards

PUBLIC PRIVATE PARTNERSHIP

Results

in

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Lack of political leadership, vision and

strategy

Not implemented in a context of widerchange / administrative reform

Poor costing or lack of resources

creeping commitments Inappropriate definition of project goals

and scope

PPP - Risk Factors

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Automation without proper processing

Hurried implementation

Change management

Use of untested fancy technology

Inadequate attention to monitoring and

evaluation

PPP - Risk Factors

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Types of PPPs

BOT Build Operate Transfer

BOO Build Own Operate

BOOT Build Own Operate Transfer

DBF Design Build Finance

DBFO Design Build Finance Operate

DBO Design Build Operate

BLT Build Lease Transfer

BTO - Build Transfer Operate

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Suitable areas for

PPPs Transport (road, rail, ports, airports)

Fixed links (bridges, tunnels)

Water resources (filtration plants, irrigation, sewage treatment,pipelines)

Tourism (facility development)

Health (hospitals and specialized health services)

Specialized accommodation facilities (courts, police stations)

Educational facilities (schools, museums, libraries)

Correctional services (prisons, remand and detention centres) Arts, sport and recreational facilities

Convention centres

Government office accommodation

Social housing

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Issues in selecting the private participation

Technological characteristics of thesector

Current condition of the sector Social objectives

Strategic view on ownership of assets

Managerial capability Regulatory capability

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Role of the Government & Public Sector

Defining PPP Parameters

Monitoring performance

Coordination

Safety and environmental monitoring

Establishing regulatory system

Strategic planning

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Role of the Private Sector

Technology Adaptation

Financial Management

Operational Efficiency

Marketing Network

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Suitable Conditions

for PPPs

Accommodating political framework

Right legal framework

Public acceptance

Quality practitioners

Availability of finance Better coordination

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Six Success Keys

The Environment

Organizational Structure

Detailed Business Plan Guaranteed Revenue Stream

Stakeholder Support

Pick Your Partner Carefully

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Public-Private Partnership islike symbiosis where both

parties gain while helpingeach other.

This mutual friendship is

expected to sustain in future.It will pave the path foraccelerated growth and

sustainable development.PPP is Indias answer

towards future of production.

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