Challenges

Regulatory environment: There is no independent PPP regulator in India currently. In order to attract more domestic and international private funding of infrastructure, a more robust regulatory environment, with an independent regulator, is essential. Lack of information: The PPP program lacks a comprehensive database regarding the projects/studies to be awarded under PPP. An online data base, consisting of all the project documents including feasibility reports, concession agreements and status of various clearances and land acquisitions will be helpful to all bidders.

Project development: The project development activities such as, detailed feasibility study, land acquisition, environmental/forest clearances etc., are not given adequate importance by the concessioning authorities. The absence of adequate project development by authorities leads to reduced interest by the private sector, mispricing and many times delays at the time of execution.
Lack of institutional capacity: The limited institutional capacity to undertake large and complex projects at various Central ministries and especially at state and local bodies level, hinder the translation of targets into projects. Financing availability: The private sector is dependent upon commercial banks to raise debt for the PPP projects. With commercial banks reaching the sectoral exposure limits, and large Indian Infrastructure companies being highly leveraged, funding the PPP projects is getting difficult.

Examples of failure of PPP projects

The Delhi-Gurgaon expressway The Delhi Airport Metro Express The Vadodara-Halol Toll project

Chennai airport

Suggestions
If India is to fulfill its infrastructure requirements, it is critical to create successful PPP models. It is not an easy task. PPPs present an inherent conflict between the government objective to minimize overall economic costs while ensuring high-quality service and the private sector aims to maximize returns. This needs to be carefully managed First, not every project is well suited for PPP Second, create an effective balance of risk between private and public sector. For example, the construction risk post all clearances is better managed by the private player while the risk from right of way/access delays is better managed by public sector Third, pre-obtain all clearances (environmental, regulator, land) before awarding the PPP contract. for example, the government plans to complete all land acquisition for a PPP project before a private sector partner is selected.

Conclusion
The problems perhaps dont lie with the dynamics of the model but more to do with the dynamics of Indias political and economic settings. For instance, in China, the consequent results of the PPP model are different and efficiently profitable for the parties involved due to the abovementioned political and economic settings being conducive to the same. Chinas efficient bureaucracy, fewer corruption cases, zero or minimal red tape and cheap resources make them a benchmark case study for understanding PPP projects. Resultingly, numerous SPVs (Special Purpose Vehicles; corporations set up to manage PPP projects) are efficiently bolstering the rapid growth and success of PPP projects in that country. In the current scenario, the State must singularly start building most of the projects (thus, dodging the public-private coordination delays that may create hurdles) as they do in China; and later, they should auction the same to private players for efficient management and effective service delivery, the way they do in the US.