Leveraging Public-Private Partnership (PPP) in Development Sector

by | Jun 1, 2022

A Public Private Partnership (PPP) is essentially a contractual relationship between a public sector authority and one or more private parties.

In the development sector, the concept shifts the role of the government bodies from delivering services directly, to service management and coordination. It is not a new development in India though, welfare schemes across the board usually run through public funds where private party provides service delivery or management.

Public-Private-Partnerships(PPP) have recently been discussed due to the ambitious Railway and Highway projects steered by the Centre. What is often an under-rated topic is the burgeoning opportunity in the social sector.

Since the beginning of our Five Year Plans, huge sums have been allocated to social services but years later they still fall short on the actual requirement. Taking healthcare as an example, India has allocated around 1% of its GDP on health for more than 15 years in contrast to countries like Japan with 9% or even similar economic nations like Brazil which spends 3-4% of its GDP. This is why we still have only 0.7 hospital beds per 1,000 people and 0.857 doctors per 1,000 people.

The public sector and private entities might have different initial motivations to begin a project but share similar short term goals that can be leveraged to foster relationships. Some enablers for both are stated below: 

For the State, the benefits are galore. PPPs are comparatively cost-efficient as performance-based funding enhances productivity. Further, the shift from service inputs to outputs would lead to wider and percolated innovations.

The PPP models in large-scale infrastructure have many notable examples, from rebuilding infrastructure in Gujarat post earthquake, multi-million electricity generation projects, etc though also colossal failure stories of Metro projects but a key difference in the social sector is that the overall idea for NGOs/trust/social organisations is not profit-making but social development. This alone makes a huge difference to the viability and sustainability of projects in this sector.

Advantages to have NGO partners in PPP

As stated by NITI Aayog,

  • Voluntary organizations (VOs) are closer to the disadvantaged sections of the society;
  • Staff of VOs are normally more motivated;
  • VOs are more successful in ensuring people’s participation;
  • VOs are more flexible and quick in decision making

Role of NGO’s in PPP

Charitable institutions, societies, trusts or voluntary organizations can play a unique role as

  • Facilitators to coordinate and influence public policy;
  • Mediators often times between the government entities and private companies. The nature of collaboration herein are usually projects funded by the government;
  • Participants with a direct relationship in this trilateral arrangement. Here usually the government takes the role of a coordinator.

With the involvement of the Government, the selection of the private institutions (including social organizations) requires a greater level of transparency. In an open procedure through competitive bidding there are no restrictions to entry due to a well-designed bid process. Sometimes the invitation to bid might be given to a closed (or specific) set of bidders only. This may be a single bid or involving multiple steps of discussions and negotiations not only with the public authority but also amongst themselves.

In what is called the Swiss Challenge Approach, proposals are sent to the government suo-moto. If it is a project in line with the concerned authority’s priorities it may then also invite counter proposals from others for similar projects.

Similarly, the monitoring and evaluation also requires a detailed and unbiased eye. Ideally involving a mutually decided independent third-party for monitoring would lead to best results but often it is done by the authorities/departments authorised by the government creating a natural tilt in the process.

Learning from success stories

Multiple successful attempts of PPP across the world effectively demonstrate its capabilities for transformation. Sanitation as a theme has seen many such examples – Singapore’s waste-water treatment plan started in early 2000 has developed into a touted example of efficacy and sustained change.

In India too, Population Services International ran a pilot faecal sludge management programme in Patna, Bihar funded by Bill and Melinda Gates Foundation and Grand Challenges Canada. In close to 2 years, there was 25% less faecal sludge contaminating open areas and 5 million liters disposed in treatment plants. This partnership with the Municipal Corporation opened up avenues for private players in the sector. This could also go a long way in mechanising solid waste management and eliminating the dreadful practice of manual scavenging.

It will now be scaled to more Tier-2 cities in collaboration with the Forum of Young Global Leaders and Maverick Collective.

I had an opportunity to look up close to another example of an innovative PPP at my host organisation – Centre for Migration and Inclusive Development, Kerala.

The Bandhu Clinic is India’s first mobile clinic and vaccination unit dedicated for migrant workers, currently servicing in Ernakulam. The clinics, funded by Mangalore Refinery and Petrochemicals Limited, Wipro and currently by Bharat Petrochemicals Limited, is a PPP with the National Health Mission(NHM), Kerala. It is active at hours convenient to workers near their accommodation areas with medical staff conversant in their languages.

Bandhu Clinic, the mobile Covid screening clinic exclusively for migrant labourers. Picture credits: Anu Kuruvilla, Express News Service

The initial cost of plying a mobile clinic is a sizeable expenditure where the private players come into play. The pharmaceutical consumables are provided through the NHM, which also facilitates linkages with public local health institutions for referrals or follow-ups.


As stated in PPP in Infrastructure by KV Pratap and Professor Rajesh there is no single universally accepted definition of a PPP and impact of this lacunae can be more than academic.

The criticisms sufficiently document the failures of PPP. But while such models increase the bargaining arrangements and foster newer associations, it also leads to restriction of any political role of non-profits by the state. The obvious power imbalance likely affects the organisations even in activities beyond the project.

Ideally, striking the balance between all players is a challenge but not unworkable. With Bandhu we saw the example of a collaboration providing for a simple solution to pertinent healthcare concerns of migrant workers in the district.

With ambitious plans in the pipeline such as Housing for All, 100 smart cities it is pertinent to analyse and foster PPP models of social innovations instead of discarding them altogether.

Take a look inside Bandhu Clinic here!

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