PPP: Public Private Partnership in Rajasthan

According to the Economic Review of Rajasthan 2020-21, as on 31^st December 2020, 184 projects with an investment of ₹16,563.42 crore have been completed, 31 projects with an investment of ₹2,599.42 crore are currently under implementation and another 39 projects involving an investment of ₹17,110.27 crore are under planning stage through Public Private Partnership in Rajasthan.

What is Public Private Partnership (PPP) ?

Public Private Partnership (PPP) model involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project.

Read More: PPP in India

Public Private Partnership in Rajasthan

Rajasthan’s PPP model does not restrict private players to merely building roads and bridges, but allows them to take control of the services and social sectors. It pushes for privatization in even those government sectors hitherto forbidden to the private sector.

Rajasthan Government has broken the monopoly of the government sector in transportation, power distribution, public distribution schemes (PDS), health and education. Hence, in Rajasthan, PPP  is being used both for building infrastructure as well as for improving the provision of services.

A. Policy Initiatives for PPP in Rajasthan:

Road Development Policy, 2013

• Rajasthan was the first State to formulate a policy for Build-operate-transfer (BoT) projects in 1994 to facilitate the entry of private sector in the roads sector under the State Road Development Policy, 1994.
• Recognizing importance of private sector, PPP model of development is further given impetus to overcome the resource gap and to bring out improved all round efficiency.
• Consequently, the State has been in the forefront of successfully implementing a number of road sector projects in the recent past.

Rajasthan State Road Development Fund Act, 2004 (Act No.13 of 2004)

• The State Road Development Fund Act, 2004 was enacted. Under the Act, a non-lapsable State Road Development Fund (SRF) was created through levy of 1.00 cess on petrol/diesel.
• The levy is revised from time to time.
• The funds collected under the Act are being utilized for development and maintenance of State Roads.

Rajasthan State Highways Act, 2014 (Act No. 22 of 2015)

• Rajasthan State Legislature has enacted the comprehensive Act assent of the Governor of which was received on 29^th April 2015 and became Act on 1^st May 2015.
• The act facilitates the declaration, development, operation, safety and regulation of highways and the use of land appurtenant thereto, acquisition of land for highways and other roads, constitution of the Rajasthan State Highways Authority, and for matters connected therewith or incidental thereto.

Transaction Advisory Services

• State Administrative Departments are competent to procure transaction advisory services (Financial Consultants, Technical Consultants and Legal Advisers) through open advertising route as per the procedure laid down under the Rajasthan Transparency in Public Procurement (RTPP) Rules, 2013.

B. Institutional Arrangement

To provide an effective arrangement for successful development and execution of PPP projects in the State, the State Government has adopted, a three-tier institutional framework comprising the following:

1. Approval Committees

• Council for Infrastructure Development (CID):
  • State Government has set up a Council for Infrastructure Development (CID) under the chairmanship of the Chief Minister with a view to decide on the policy issues pertaining to infrastructural projects, specifically in relation to projects being developed on Public Private Partnership (PPP).
  • The CID decides on various policy issues and grants approval of PPP projects, if project cost is higher than 500 crore.
• Empowered Committee for Infrastructure Development (ECID):
  • To facilitate the functioning of the CID, the State Government has also constituted an Empowered Committee for Infrastructure Development (ECID) under the chairmanship of the Chief Secretary.
  • The ECID formulates, reviews and recommends policy papers and proposals for submission to the CID and it also monitors and follow-up on implementation of the decisions ta en by the CID.
  • Planning Department serves as the secretariat of the CID and ECID.
• Empowered Committee for Road Sector Projects –
  • In order to consider and approve the road sector projects forming part of the Rajasthan State Highways Development Programme (RSHDP), an Empowered Committee has been constituted separately under the chairmanship of Chief Secretary.
  • The Administrative Department of this Empowered Committee is the Public Works Department (PWD).
• State Level Empowered Committee (SLEC) for Swiss Challenge Proposals –
  • A State Level Empowered Committee (SLEC) has also been set up under the chairmanship of Chief Secretary for the projects under Swiss Challenge Method in accordance with the Rajasthan Transparency in Public Procurement (Amendment) Rules, 2015.
  • The SLEC considers, examines and accords approval of the project proposals (both PPP and Non-PPP) received under the Swiss Challenge Method.
  • The Administrative Department of this Empowered Committee is the Planning Department.

2. PPP Cell (Nodal Agency)

The PPP Cell created under the Planning Department in the year 2007-08, is the State Nodal agency to coordinate efforts of the State Government regarding projects entailing Public- Private Participation. It serves as the repository of all the information relating to PPP in the State including best practices, guidelines, schemes etc.

This Cell serves as the secretariat of the ECID and being strengthened to support departments in project development, appraisal and evaluation. This Cell provides all hand-holding support for development of these projects.

3. Respective Administrative Departments/ Agencies (Implementing Agency)

Administrative departments/agencies of the Government of Rajasthan are competent to identify, develop and execute projects under the PPP modality in all subject areas of their jurisdiction as laid down in the Rajasthan Rules of Business issued by the Government of Rajasthan.

C. Joint Ventures promoted by State Government

1. Project Development Company of Rajasthan (PDCOR) was incorporated as a Joint Venture company in December, 1997 to assist State Government’s departments and statutory authorities to develop bankable infrastructure projects in the PPP mode.
2. Road Development Company of Rajasthan (RIDCOR) was developed in 2004 to implement ‘Mega Highways Project’ in the State.
3. Saurya Urja Company of Rajasthan Ltd (SUCRL) was developed in 2014 for development of 1000 MW Solar Parks at Bhadla (Jodhpur) in phased manner.
4. Essel Saurya Urja Company of Rajasthan Ltd (ESUCRL) was developed in 2014 for development of 750 MW Solar Parks at Jodhpur and Jaisalmer in phased manner.
5. Adani Renewable Energy Park Rajasthan Ltd (AREPRL) was developed in 2015 for development of 2000 MW Solar Parks at Jaisalmer and Bhadla (Jodhpur) in phased manner.

D. Project Development Funds (PDFs)

A fund of ₹4.50 crore was created for an initial term of 5 years in 2003, subsequently extended by further one year for assisting development of infrastructure projects in the State with private sector participation.

A new fund titled “Rajasthan Infrastructure Project Development Fund” (RIPDF) was created in 2011 with an initial corpus of Rs. 25 crore for supporting the development of credible and bankable PPP projects. RIPDF stands dissolved with effect from 18th June, 2015.

VGF:

• State Government had issued a Social Sector Viability Gap Funding (VGF) Scheme in 2007 for promoting PPPs in the social sector for projects that are not financially viable.
• Viability Gap Support in the form of capital subsidy,  interest free or concessional loan, land free of cost or at concessional price etc.

IIPDF:

• Now the administrative departments concerned can meet the cost of project development requirements of different projects from either their specific/within budgetary provisions or seek central assistance under India Infrastructure Project Development Fund (IIPDF).
• The Government of India provides financial assistance for the Project under the IIPDF for Project Development entailing project structuring, financial modeling, bid documents preparation, bidding process assistance, etc.

E. Monitoring Mechanism

Progress of State’s PPP projects are regularly monitored both at project authority level on monthly basis and at departmental level on monthly/quarterly basis. 

The PPP Cell of Planning Department also reviews the status of State’s PPP projects on quarterly basis under three categories viz., completed projects, projects under implementation and projects under planning or in pipeline.

F. Capacity Building for PPP in Rajasthan

The National PPP Capacity Building Programme (NPCBP) launched by Department of Economic Affairs, Ministry of Finance, Government of India in the year 2010 with support of KfW (German Development Bank ) was rolled out successfully in the State of Rajasthan.

The aim was to enhance capacities of senior and middle level officers of Administrative Departments/ Implementing Agencies concerned at large to enable them in conceptualizing, structuring, awarding, implementing and monitoring of the PPP projects.

To mark the culmination of the NPCBP, the PPP Cell of Planning Department, Government of Rajasthan was awarded by Department of Economic Affairs, Ministry of Finance, Government of India in March, 2014 for commendable contribution in the implementation of the programme.

The PPP Cell of Planning Department has now been providing resource support on PPPs to all the national and state training institutes, available in the state.

Sector-wise Public Private Partnership in Rajasthan

Roads Sector:

• Rajasthan was the first State to formulate a policy for Build-OperateTransfer (BOT) projects in 1994. The Rajasthan Road Development Act, 2002, encourages private sector participation in the construction of financially viable bridges, bypasses, rail over-bridges, tunnels, etc.
• For Road Projects that are not financially viable, Rajasthan has introduced mechanism like BOT with Viability Gap Fund (VGF). Development of the State highways and major district roads have been taken up using this model.
• Under the State Road Development Fund Act, 2004, a non-lapsable State Road Fund (SRF) was created through levy of 1 Rupee Cess on petrol / diesel. SRF is being leveraged to take up large/mega State Highways projects

Urban Infrastructure:

• PPP projects in the Urban Infrastructure sector are being intensively pursued  include the Metro Rail Project in Jaipur, Exhibition-cum-Convention Centre in Sitapura, Jaipur and Ring Road Project in Jaipur.

Social Sector:

• Education: Government of Rajasthan intends to engage private sector participants to design, finance, establish, operate, manage and maintain 165 secondary schools (from 6th to 12th) for a period of 30 years.
• In the higher education segment, the State Government has initiated a project for establishment of a University for Physical Education and Sports in Jhunjhunu on PPP mode.
• State Government has also set up some ITIs, Polytechnics and Engineering Colleges on PPP mode in lagging areas.
• Indian Institute of Information Technology (IIIT) is proposed to be set up on PPP mode at Kota.
• Some projects to provide houses to the economically weaker sections of the society have also been developed on PPP mode under the State’s Affordable Housing Scheme.

Water Sector:

• Project development and structuring for a few water supply projects on PPP format have already been initiated.
• These include four projects, two of water supply in Ajmer and Udaipur  towns, and two pilot projects for water supply in Jaipur (Mansarovar)  and Kota with focus on reduction in non-revenue water.

Power Sector:

• PPP model has been extend to power distribution in Kota and Bharatpur. Kolkata-based CESC has been given the rights.
• Lignite based Power Plant in Bhadresh (Barmer) (Total 8 Units) is being implemented on Build, Own, Operate and Maintain (BOOM) basis with an investment of Rs. 5,000 crore

Tourism Sector:

• Projects under PPP include Jal Mahal Integrated Tourism Project, Restoration and Conservation of Tijara Fort, Alwar

IT Sector:

• To  modernize communication infrastructure Rajasthan Government is implementing RajSWAN project on BOOT basis.
• Common Service Centers Project. A total of 6,626 kiosks are being set up across the State under the project. These CSCs will be managed by Village Level Women Enterprises (VLWEs) through service center agencies.

Recent Initiatives on Public Private Partnership in Rajasthan

1. Rajasthan’s PPP model for Primary Health Centers (PHC’s)

In June 2015, Rajasthan Government decided to run PHC public-private partnership (PPP) mode. There were 2,082 PHCs operating in Rajasthan. In first phase, 90 out of these 2082 were handed over to be run in PPP mode.  Selection of private partners  was done through the open bidding system and private operators were asked provide doctors, paramedics and other staff, free OPD, and 24-hour emergency scheme among other things.

Why PPP for PHC:

• Shortage of staff: the identified PHC had shortage of medical officers and facilities were not available as per the standards.

Case Study: SCALE Rajasthan

Going forward on PPP model, Rajasthan government handed over control of 30 PHCs and 153 sub-centers (SCs) – chosen from among the worst-performing centres- across 12 districts in the state to Wadhwani Initiative for Sustainable Healthcare (WISH) foundation.

WISH  foundation took responsibility for day-to-day management, bringing in technical support and innovative technologies to upgrade services, in addition to carrying out government-mandated immunisation and vaccination programmes. In return, Rajasthan government reimbursed operating costs, improve the regulatory environment and scale up successful innovations across the public health system.

Positive Outcomes of Initiative:

• Cleanliness in PHC has been a major change. Along with cleanliness, there has been behavioural change in the doctors and the medical staff.

• The private PHC’s have now covered 4,00,000 population and outpatient departments at these centres saw an 80 per cent increase in patients in 6 months and institutional deliveries had increased by 35 per cent.

• Technology Innovation: The change in mode of operations has allowed infusion of new technology like smartphone-based test for haemoglobin levels and a mobile pathology lab at grass root level.

Concerns Remaining:

• The real challenge is to extend PPP to the entire health system. Unless private companies have a sense of public service, this could devolve into a mere money-making enterprise and could jeopardize the complete national health programme.

2. PPP model for Public Distribution System

Rajasthan Government introduced public private partnership (PPP) in Public Distribution System (PDS) through Annapurna Bhandar Yojna. The government signed MOU with the Future Group to sell multi-brand consumer goods through the ration shops. In the first phase, the scheme was implemented through 5,000 ration shops.

Positive Outcomes:

• Annapurana stores have been proclaimed has Rural Malls where benefits of modern retail have been extended to the people of the state through PDS shops. These fair price shops will now get branded consumer products from the Future Group’s portfolio, over and above the grains, vegetables, sugar, and so on, already available at the PDS outlets.

• The scheme has been an entrepreneurship drive with 5,000 FPS dealers turning into entrepreneurs with Annapurna Bhandar. It has increased dealers sales and allowed them to operate profitably.

3. Development of Dak Bungalows

In October 2016, Rajasthan Government decided to develop Dak Bungalows like three star hotels on public-private partnership (PPP) model. In the first phase of the project, Dak Bungalows in Ajmer, Bharatpur, Jaipur, Jodhpur, Bikaner, Alwar, Bhilwara, Jaisalmer, Mount Abu and Nathdwara will be taken up.

According to the policy, about 20 per cent of the rooms in the Dak Bungalows will be reserved for government officials and other employees and remaining 80 per cent will be open for all.

4. Other PPP initiatives in Rajasthan

• All nationalized routes in Rajasthan were nationalized, enabling private bus operators to ply buses on them.
• In addition, private players have also  been allowed to operate from government bus stands.