Building Infrastructure: Private Participation in Emerging Economies

Abstract

The importance of physical and social infrastructure for sustenance of high growth rate hardly needs any mention. Infrastructure bottleneck has always been a serious concern and with high growth, the pressure on already deficient infrastructure has increased all the more. As the development of world class infrastructure in tune with the growing needs and also for strengthening and supplementing the existing infrastructure facilities is a herculean task for governments alone especially due to fiscal constraints and other monitory liabilities, Public Private Partnership (PPP) model has emerged and is likely to be encouraged as a preferred mode of funding infrastructure. Brazil, Russian Federation, India and China, popularly known as BRIC countries have embarked on a higher growth trajectory, creating an identity as emerging economies in the global scenario. The present paper studies experiences of private partnership in BRIC. It examines the trend in private investment in infrastructure and the structural shift in infrastructure financing since 1991. It is evident from the trend that the PPP model of financing infrastructure requirements in BRIC has gained momentum. An overview of private partnerships in different infrastructure sectors over the past two decades has been explored. In the global context, BRIC countries’ experience in private partnerships in infrastructure development has been talked about. It also investigates challenges in PPP projects in infrastructure sector. Private partnerships offer significant advantages in terms of enhancing efficiency through competition in the provision of services to users. However, success of this mode mainly rests on the environment which not only attracts private investment but also ensures interest of people.