Analyzing the Institutional Framework for Urban Public Private Partnerships in Indian States

Abstract

The quality of urban engineering services such as water supply and sanitation have gradually deteriorated across India in contrast to the increasing contribution of these areas to the country’s GDP. The service delivery departments of the urban local bodies (ULBs) are responsible for providing municipal services to urban residents. These departments have over the years developed and nurtured engineering competencies for the implementation of municipal projects. Now, given the deficit in urban infrastructure services, public private partnerships (PPP) are emerging as a promising model for improving municipal service delivery. From a ULBs perspective, the implementation of PPP projects differs substantially from conventional projects since executing PPP projects requires competencies in multiple disciplines such as finance, contract law, taxation policy & regulations. The lack of capacity in ULBs to execute these complex PPP projects has subsequently emerged as a key bottleneck to the timely delivery of urban infrastructure services. The state governments in India have created institutional frameworks for facilitating PPPs in the delivery of municipal services. The state of Tamil Nadu in India has formed a nodal institution – the Tamil Nadu Urban Development Fund (TNUDF) for facilitation of PPPs in the delivery of municipal services in Tamil Nadu. This paper analyzes several case studies of PPP projects in the urban engineering sector facilitated by TNUDF to determine the contribution made by TNUDF in effective implementation of PPP projects. Improvements in the existing institutional framework have been suggested based on lessons from the case studies and experiences of existing institutional models in other countries. Generic insights are also drawn that will help other urban