Why is Public Private Partnership (PPP) required in infrastructural projects? Examine the role of PPP model in the redevelopment of Railway Stations in India.

The Government has taken initiatives such as NIP, Gati Shakti, NMP etc. to leverage infrastructure as a weapon against the present economic slowdown.

Need for PPP

• Finance Investment Gap: India needs to spend about $1.4 trillion to become $ 5 trillion economy. (Eco Survey 2021-22).
• Reduce financial burden as the share of Public Investment on infrastructure is quite high at 70%.
• Harness private sector expertise Ex: OMDA model in Airports.
• Equitable sharing of risks Ex: Mumbai Metro
• Enhanced customer satisfaction Ex: Bhiwandi Franchise model for DISCOM.
• Asset Recycling Ex: NMP
• Railway Station Redevelopment Project plans to redevelop 400 stations across 100 cities.

Benefit Railways:

• Upfront payment through long term lease and share of annual revenue of private partner
• Ownership of Stations at the end of lease period.
• World class passenger amenities such as multi-modal connectivity, kiosks, escalators, executive lounges Ex: Habibganj- India’s first PPP Railway station.
• Replicate successful models of Airport development Ex: Delhi’s T3 terminal.
• Efficient utilisation of land leading to transit oriented development Ex: Gandhinagar Railway Station.

Going forward, recommendations of Kelkar Committee must be adopted to address challenges such as absence of independent regulator, lack of coordination, delays in clearances etc. to reap full benefit of PPP.