PUBLIC-PRIVATE PARTNERSHIP (PPP)

INTRODUCTION TO PUBLIC-PRIVATE PARTNESHIP

Over the years, the term privatization has gone through many metamorphoses. In the public assembly
facility management industry, the term often referred to the practice of transferring, by contract, the
management of a facility to a private management company. Today, since there are so many public-
private partnerships—in all business environments—it is perhaps best to call these types of
arrangements “contract management.” It is indeed a public-private partnership, though.
Public-private partnerships are increasingly advocated to alleviate deficiencies in the public
health system as well as to reduce economic stress on those who seek services from an expensive,
burgeoning and unregulated private health sector.
Public Private Partnership (PPP) has become a common approach to health care problems
worldwide. Many PPP were created during the late1990s, but most of them were focused on specific
diseases such as HIV/AIDS, and malaria. Due to the well-documented deficiencies of public sector
health systems, the poor in INDIA are forced to seek services from private sector, under immense
economic duress1. Partnership with the private sector has emerged as a new avenue of reforms, in the
past resulting from resource constraints for the public sector by various Governments across the
world.

DEFINITION OF PUBLIC-PRIVATE PARTNESHIP

1. Public-Private Partnership  (PPP) is a government service or private business venture which is
funded and operated through a partnership of government and one or more private
sector companies. These schemes are sometimes referred to as private sector participation (PSP),
PPP, P3 or P3.
2. “Means to bring together a set of actors for the common goal of improving the health of the
population based on the mutually agreeable roles and principles, (WHO 1999)”.
3. PPP 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.
4. Government of India’s Definition-“Public Private Partnership (PPP) Project means a project
based on a contract or concession agreement, between a Government or statutory entity on the one
side and a private sector company on the other side, for delivering an infrastructure service on
payment of user charges”.
5. Broadly PPP refers to an agreement between government and the private sector regarding the
provision of public services or infrastructure.
6. Purportedly a means of bringing together social priorities with the managerial skills of the
private sector, relieving government of the burden of large capital expenditure, and transferring
the risk of cost overruns to the private sector. Rather than completely transferring public assets to
the private sector, as with privatization, government and business work together to provide
services.
In a PPP, each partner, usually through legally binding contract(s) or some other mechanism, agrees
to share responsibilities related to implementation and/or operation and management of a project. This
collaboration or partnership is built on the expertise of each partner that meets clearly defined public
needs through appropriate allocation of:
 Resources
 Risks
 Rewards
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 Responsibilities
The allocations of these elements and other aspects of PPP projects such as, details of implementation,
termination, obligations, dispute resolution and payment arrangements are negotiated between the
parties involved and are documented in written contract agreement(s) signed by them.
7. As per the Scheme for Financial Support to Public Private Partnerships in Infrastructure, of the
Government of India,
"The Public-Private Partnership (PPP) Project means a project based on contract or concession
agreement between a Government or statutory entity on the one side and a private sector company
on the other side, for delivering an infrastructure service on payment of user charges."

WAYS OF FINANCIAL SOURCES IN PPP

 In some PPP, the cost of using the service is borne exclusively by the users of the service and not
by the taxpayer.
 In others (notably the private finance initiative), capital investment is made by the private sector
on the strength of a contract with government to provide agreed services and the cost of providing
the service is borne wholly or in part by the government.
 Government contributions to a PPP may also be in kind (notably the transfer of existing assets).
a) In projects that are aimed at creating public goods like in the infrastructure sector, the government
may provide a capital subsidy in the form of a one-time grant, so as to make it more attractive to
the private investors.
b) In some other cases, the government may support the project by providing revenue subsidies,
including tax breaks or by providing guaranteed annual revenues for a fixed period.
Typically, a private sector consortium forms a special company called a "special purpose vehicle"
(SPV) to develop, build, maintain and operate the asset for the contracted period. In cases where the
government has invested in the project, it is typically (but not always) allotted an equity share in the
SPV.
The consortium is usually made up of a building contractor, a maintenance company and bank
lender(s). It is the SPV that signs the contract with the government and with subcontractors to build
the facility and then maintain it. For instance, a hospital building financed and constructed by a
private developer and then leased to the hospital authority. The private developer then acts as
landlord, providing housekeeping and other non medical services while the hospital itself provides
medical services.

ORIGIN OF PPP
Pressure to change the standard model of Public Procurement arose initially from concerns about the
level of public debt, which grew rapidly during the macroeconomic dislocation of the 1970s and
1980s. Governments sought to encourage private investment in infrastructure, initially on the basis
of accounting fallacies arising from the fact that public accounts did not distinguish between recurrent
and capital expenditure.
The idea that private provision of infrastructure represented a way of providing infrastructure
at no cost to the public has now been generally abandoned, interest in alternatives to the standard
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model of public procurement persisted. In particular, it has been argued that models involving an
enhanced role for the private sector, with a single private sector organization taking responsibility for
most aspects of service provisions for a given project, could yield an improved allocation of risk,
while maintaining public accountability for essential aspects of service provision.
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Initially, most public-private partnerships were negotiated individually, as one-off deals. In

1992, however, the Conservative government of John Major in the United Kingdom introduced the
private finance initiative (PFI), the first systematic program aimed at encouraging public-private
partnerships.

HISTORY OF HEALTH RELATED PPP

PPP's at an individual project level are not new. Merck's 1987 donation of “Mectizan” backed up by
public and Philanthropic sector provision of the necessary infrastructure to utilize this drug effectively
for onchoceriasis control is a shining example of what can be achieved through PPP. During the
1980s, political and economic disruptions in many areas of the world led to a reassessment of the
basis of the reliance on the public sector for health care. Both national Governments and Global
Economic organizations began to shift to an increasing reliance on the private sector for improvement
in health and welfare systems.
NEED FOR PARTNERSHIP
 Why the shift towards PPP's?-It is the result of increased global integration due to 5:
 Globalization, Epidemiological and Demographic Transition.
 WTO, Patents, TRIPS and other related developments.
 To harness the potentiality of I.T in future management of health care
 To address the digital divide
 Reaching out to the unreached.
 Global epidemic management in view of the current incidence of SARS & Dengue.
 Prioritization areas of potential donor support in health care.
 What do PPP's actually contribute?-PPP's bring outside resources to bear on areas of local need.
PPP contribute by-
 Ensuring sustainability of programs by enhancing the skills and capacities of local organizations,
and by increasing the public's access to unique expertise and core competencies of the private
sector.
 Facilitating scale up proven, cost-effective interventions through private sector networks and
associations.
 Expanding the reach of interventions by accessing target populations in their milieu (through
workplace programs) and
 Sharing program costs and promoting synergy in programs. Additional partners contribute in kind
–contributions that otherwise would be beyond the reach of implementers.

TYPE OF PPP'S
Several classifications have been proposed to conceptualize and categorize PPP, which may be based
on the terms of the constituent membership or nature of the constituent membership or nature of
activity.
 Transnational partnerships involve a visible role of the for-profit sector. These usually involve
larger partnerships and a complex grouping; depending upon their structure, they may bring
together several Government, local and international NGOs, research institutions and UN
agencies in transnational programs, often involving the non-profit sector.
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 Individual Government forming partnerships with the for profit private sector. There are also
examples of situations when a Govt. partner with an NGO with a particular technical strength,
technical or outreach related.
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In certain cases, the NGOs seek support from corporate partners at National and International level.
The World Heart Federation has entered into collaboration with the corporate sector for supporting
global programs.
Partnerships in the health sector can be for various purposes. Many of such partnerships have
positively contributed to health outcomes in the past; developing technologies for tropical diseases,
surveillance and screening strategies, etc.
ROLES AND RESPONSIBILITIES OF PPP
PPPs do not mean reduced responsibility and accountability of the government. They still remain
public infrastructure projects committed to meeting the critical service needs of citizens. The
government remains accountable for service quality, price certainty, and cost-effectiveness (value for
money) of the partnership. Government remains actively involved throughout the project’s life cycle.
Under the PPP format, the government role gets redefined as one of facilitator and enabler, while the
private partner plays the role of financier, builder, and operator of the service or facility. PPPs aim to
combine the skills,
expertise, and experience of both the public and private sectors to deliver higher.
SALIENT FEATURES OF A PPP
 Not all projects with private sector participation are PPP projects. Essentially, PPPs are those
ventures in which the resources required by the project in totality, along with the accompanying
risks and rewards/returns, are shared on the basis of a predetermined, agreed formula, which is
formalized through a contract. PPPs are different from privatization.
 While PPPs involve private management of public service through a long-term contract between
an operator and a public authority, privatization involves outright sale of a public service or
facility to the private sector.
 A PPP project is essentially based on a significant opportunity for the private sector to innovate in
design, construction, service delivery, or use of an asset.
 To be viable, PPPs need to have clearly defined outputs, avenues for generating nongovernmental
revenue, and sufficient capacity in the private sector to successfully deliver project objectives.
VARIOUS PPP FORMS AND FORMATS
In a PPP, the ‘private’ partner could be a private company, a consortium, or a nongovernmental
organization (NGO). Typically, a PPP project involves a public sector agency and a private.
FUNDAMENTAL QUALITIES OF A PPP PROJECT
• High priority, government-planned project. The project must have emerged from a government-led
planning and prioritization process. The project must be such that, regardless of the source of public
or private capital, the government would still want the project to be implemented quickly.
• Genuine risk allocation. Shared risk allocation is a principal feature of a PPP project. The private
sector must genuinely assume some risk.
• Mutually valuable. Value should be for both sides, which means government should also genuinely
accept some risks and not transfer the entire risk to the private sector, and vice versa.
— VGF Scheme:-sector consortium which comprises contractors, maintenance companies, private
investors, and consulting firms. The consortium often forms a special company or a ‘special purpose
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vehicle’ (SPV). The SPV signs a contract with the government and with the subcontractors to build
the facility and then maintain it.
The most common partnership options are (i) Service Contract; (ii) Management Contract/Lease; (iii)
Build Operate Transfer (BOT); (iv) Concession; (v) Joint Venture; and (vi) Community-based
Provision. Most contracts take the form of ‘Concession’ and ‘Design, Build, Finance, and Operate’
PUBLIC PRIVATE PARTNERSHIP

contracts, to cover the finance, design, management, and maintenance obligations. These contracts
are usually financed by user fees or tariffs or government subsidies.
KEY CONSIDERATIONS IN PPPS
PPPs often involve complex planning and sustained facilitation. Infrastructure projects such as roads
and bridges, water supply, sewerage and drainage involve large investment, long gestation period,
poor cost recovery, and construction, social, and environmental risks. When infrastructure is
developed as PPPs, the process is often characterized by detailed risk and cost appraisal, complex and
long bidding procedures, difficult stakeholder management, and long-drawn negotiations to financial
closure. This means that PPPs are critically dependent on sustained and explicit support of the
sponsoring Government.
To deal with these procedural complexities and potential pitfalls of PPPs, governments need
to be clear, committed, and technically capable to handle the legal, regulatory, policy, and governance
issues.

KEY CONCERNS/ISSUES TO BE ADDRESSED FOR VENTURING INTO PPP

Pre-requisites for evolving effective PPP's-Following issues are needed to be addressed for
organization for venturing with PPPs.
 Representation/legitimacy: There is a questionable involvement of those who actually need such
an endeavor.
 Accountability for the outcomes of such partnerships should be clear.
 Sector wide policy framework- there is a need to have “public policy towards private sector”.
 There a need to have explicit, transparent and adequate mechanisms which ensure:

PROBLEMS/DRAWBACKS OF PPP'S
Some of the issues which are yet to be explored are listed below:
1. Little is known about the effectiveness of partnerships, Lack of transparency in how they operate
and what they achieve, Situations which need to be the sole responsibility of government or
public sector might be overlooked, Problems associated with private sector for profit type of
partnerships i.e. Use of illegitimate or unethical means to maximize profit -High costs
2. Lack of interest in sharing clinical information
3. Creating brain drain among public sector health staff
4. Lack of regulating control over their practices
5. Clustered in cities
Problems associated with Informal / NGO's type of partnerships such as:
 Poor quality care
 Poorly educated / trained
 Small coverage
 Adhoc intervention

PUBLIC-PRIVATE PRODUCT DEVELOPMENT PARTNERSHIP (PDP)

Product Development Partnerships (PDPs) are a class of Public-Private Partnerships that focus on
pharmaceutical product development for diseases of the developing world. These include preventive
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medicines such as vaccines and microbicides, as well as treatments for otherwise neglected diseases.
PDPs were first created in the 1990s to unite the public sector's commitment to international
public goods for health with industry's intellectual property, expertise in product development and
marketing.
PURPOSES OF PDP
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1. International PDPs work to accelerate research and development of pharmaceutical products for
underserved populations that are not profitable for private companies.
2. They may also be involved in helping plan for access and availability of the products they develop
to those in need in their target populations.
3. Publicly-financed, with intellectual property rights granted by pharmaceutical industry partners
for specific markets, PDPs are able to focus on their missions rather than concerns about
recouping development costs through the profitability of the products being developed.
These not-for-profit organizations bridge public- and private-sector interests, with a view toward
resolving the specific incentive and financial barriers to increased industry involvement in the
development of safe and effective pharmaceutical products.
Examples of International Public-Private Partnerships and PDPs
International product development partnerships and public-private partnerships include:
 DNDi, the Drugs for Neglected Diseases Initiative was founded in 2003 as a not-for-profit drug
development organization focused on developing novel treatments for patients suffering from
neglected diseases.
 Areas Global TB Vaccine Foundation is a PDP dedicated to the development of
effective Tuberculosis vaccine regimens that will prevent TB in all age groups and will be
affordable, available and adopted worldwide.

PSPP VARIANT
Some social enterprises have proposed, or are operating, partnerships with the state and commercial
partners which they call Public Social Private Partnerships (PSPP) .

INFLUENCES THAT HELP DECIDE WHETHER A FACILITY IS PUBLICLY OR

PRIVATELY MANAGED
One has to do with how the ownership is structured. For instance, if the facility is part of the city as
opposed to being under the direction of a board (or authority), there could be political influences to
the management of that facility. Another reason would be the need to eliminate political cronyism.
Oftentimes a building is staffed with political appointees and there is a need to make a change
to make it more efficient. At the collegiate level, there is sometimes a need to separate the
requirements of the athletic department from the needs of the university. It helps to facilitate clients
with NCAA rules and regulations.
PDDP-PUBLIC PRIVATE PARTNERSHIP
PDDP promotes public-private partnership on an experimental basis among private organizations,
business community, NGOs and community-based organizations to coordinate and link the resources
available in the private and public sectors and to strengthen the community level institutions by
harnessing the potentials existing in the districts. These partnerships focus on promoting rural
investment and economic opportunities by tapping into the production capabilities of the rural
communities, linking them to existing capital resources of the private sector and by exploiting
existing market potentials.
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PARTNERSHIP-BUILDING 
PPP works at initiating partnership building with private sector leadership. The local Chambers of
Commerce & Industry represents the private sector as Support Organizations. Public -Private
Partnership Committees (PPPC) with representation from both public and private sectors facilitates
coordination amongst various district-level development agencies and create an enabling environment
for the partnership.
FEASIBILITY OF PARTNERSHIP PROJECTS  
The PPPC select partnership projects after assessing the district’s production and market potential,
availability of resources, the investment required, possibility of establishing cooperative
organizations, as well as the economic impact on the rural community and the involvement of women.
PARTNERSHIP PROJECT IMPLEMENTATION   
The Support Organization mobilizes the business and rural communities to form institutions and
cooperative organizations for the formation of social capital and partnership as per the project plan. It
also assists the partnership with the management of necessary technical support and credit; enhance
coordination among partners as well as establishing business linkage with various market forces.
ISSUES IN  PUBLIC  PRIVATE  PARTNERSHIP
 Choice of model for shared investments and operating expenses and time frame for contract.
 Defining a formula for shared revenues for a fair contract. Estimating volume growth is tricky.
Many sources of revenue
1. Charge to the client (utility, service provider)
2. Charge citizens
3. Generate from advertisements-building, transaction slips
 Legal and policy framework that encourages PPP
 Authentication/security of Private Partner transactions
 Design of Service Level Contract (obligations on all partners) and ability to enforce
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 PPP model can create another type of monopoly.

PUBLIC PRIVATE PARTNERSHIP APPROVAL COMMITTEE (PPPAC)

PUBLIC PRIVATE PARTNERSHIP

The Cabinet Committee on Economic Affairs (CCEA) in its meeting of 27th October, 2005 approved
the procedure for approval of public private partnership (PPP) projects. Pursuant to this decision,
a Public Private Partnership Approval Committee (PPPAC) has been set up comprising of the
following:
a. Secretary, Department  of Economic Affairs (in the Chair)
b. Secretary, Planning Commission
c. Secretary, Department of Expenditure;
d. Secretary, Department of Legal Affairs; and
e. Secretary of the Department sponsoring a project
The committee would be serviced by the Department of Economic Affairs, who will set up a special
cell for servicing such proposals. The Committee may co-opt experts as necessary.

COMMITTEES CONSTITUTED PURSUANT TO CCEA'S DECISION DATED 22.03.07

REGARDING MODIFICATION OF  APPRAISAL PROCEDURE FOR PPPS
The Cabinet Committee on Economic Affairs (CCEA) in its meeting of 22nd March, 2007 approved
modification in approval procedure for Public Private Partnership (PPP) projects. The approval
procedure had originally been approved by CCEA in its meeting of 27th October, 2005.
Pursuant to the decision of the CCEA, a Committee for appraisal of PPP projects of all
sectors of cost greater than Rs.100 crore but less than Rs.250 crore is being set up comprising of the
following:
a. Secretary, Department of Economic Affairs
b. Secretary of the Ministry/Department sponsoring the project.
For appraisal of individual projects under NHDP which are of Rs.250 crore or more but less than
Rs.500 crore and which fulfill certain specified conditions, a Committee comprising of the following
is being set up:
a. Secretary, Department of Economic Affairs
b. Secretary, Department of road Transport and Highways

VIABILITY GAP FUNDING (VGF)

Cabinet Committee on Economic Affairs in its meeting of 25th July, 2005 approved the Scheme for
support to Public Private Partnerships in Infrastructure. In pursuance of the decision of the Cabinet,
it has been decided to constitute an Empowered Committee and Empowered Institution for approving
financial assistance to such projects which satisfies all the eligibility criteria indicated in the Scheme.
The composition of Empowered Committee will be as follows:
i. Secretary {Economic Affairs)
ii. Secretary (Planning Commission)
iii. Secretary (Expenditure)
iv. Secretary of the line Ministry dealing with the subject
The Empowered Committee will:
a. Sanction Viability Gap Funding up to Rs. 200 crore (Rs. Two hundred crore) for each project
subject to the budgetary ceilings indicated by the Finance Ministry. Amounts exceeding Rs.
200 crore may be sanctioned by the Empowered Committee with the approval of Finance
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Minister;
b. Determine the appropriate formula that balances needs across sectors in a manner that broad
bases the sectoral coverage and avoids pre empting, Of funds by a few large projects;
c. Determine the inter-se allocation between any on-going Plan Scheme providing viability gap
funding and this Scheme; and,
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d. Provide clarifications or instructions relating to eligibility of a project for such support as and
when requested by Empowered Institution.
The Composition of the Empowered Institution is as follows:
i. Additional Secretary (Economic Affairs)
ii. Additional Secretary (Expenditure)
iii. Representative of Planning Commission not below the rank of Joint Secretary
iv. Joint Secretary in the line Ministry dealing with the subject (v) Joint Secretary (FT), DEA --
Member Secretary
The Empowered Institution will sanction projects for Viability Gap Funding
upto Rs. 100 crore (Rs. One hundred crore) for each eligible project subject to
the budgetary ceiling indicated by the Finance Ministry. Empowered
Institution will also consider other proposals and place them before the
Empowered Committee.
Eligible Sector: The sectors eligible for Viability Gap Funding under this Scheme are:
i. Roads and bridges, railways, seaports, airports, inland waterways;
ii. Power;
iii. Urban transport, water supply, sewerage, solid waste management and other physical
infrastructure in urban areas;
iv. Infrastructure projects in Special Economic Zones; and
v. International convention centers and other tourism infrastructure projects.

PRIVATE-PUBLIC PARTNERSHIP BENEFITS WOMEN AND NEWBORNS IN INDIA

In India, more than 100 000 women die from pregnancy-related causes every year, more than
anywhere else in the world. If the current trend persists, India will not be able to achieve the
Millennium Development Goal 5 of reducing maternal mortality by three quarters by 2015. But some
Indian states have made progress in recent years.
The government of the western Indian state of Gujarat, with a population of 50 million, has
brought on board private hospitals and doctors to provide free obstetric care to poor women. This
private-public partnership, called Chiranjeevi Yojana, or 'plan for a long life', was launched in 2005
in five districts. The government pays for the services provided by the private practitioners. The
programme now covers all 25 districts of Gujarat.

ASSESSMENT OF PPP
Certain model has been used to assess the effectiveness of PPP. This is based n certain criteria, which
is described by
 RCH/ Service Delivery Problems: health and service delivery problems this model addresses (e.g.
contraceptive prevalence, immunization, child nutrition).
 Public Entity/ purchase/ donor
 Private Entity/contractor like missionary hospital, private nursing homes, etc
 Target Group(s): main target population like poor women between 15-45, infants, etc
 Transaction/service/function: services the private entity provides (e.g. family planning services,
primary health care services) and services the public sector provides (e.g. training, funding,
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monitoring)
 Implementation Procedures- key components or activities to be undertaken
 Coverage/impact: improvement that has to be achieved in terms of health outcomes or impacts.
 Type of Partnership i.e. true or contracting.
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 Strength, weakness, cost, equity and quality elements, sustainability, scalability, coverage, health
outcomes, constraints and issues and recommendations.

NEED FOR A NEW PARADIGM OF PPP

Health care in India has a long tradition of voluntarism. For centuries, traditional healers have taken
care of the health needs of their own community as a part of their social responsibility. They have
used knowledge that has passed down the generations, regarding the medicinal value of locally
available herbs and plants. This tradition still continues, particularly in the tribal pockets of the
country. Unfortunately, the institutionalized voluntarism that evolved during the colonial era was
completely dominated by the thinking of the colonizers. They completely ignored the rich traditional
systems of health care in India. This was partly due to the fact that much of this effort grew out of the
activities of Christian missionaries, most of who came from the West. The Indian elite, who had been
partially involved in the voluntary effort during that phase, also firmly believed in the supremacy of
everything Western. Consequently, there was little possibility of evolving a health system that
assimilated the best of both schools. Perhaps, the major exception was Mahatma Gandhi’s continuous
effort to popularize naturopathy, yoga and vegetarianism through the ashrams that he had set up in
various parts of the country.
After Independence, until the mid-sixties, voluntary effort in health care was again limited to hospital-
based health care by rich family charities or religious institutions. In the mid-sixties, the effectiveness
of the Western curative model of health care in the less developed countries came under serious attack
by
development planners. The Chinese experience of decentralized health care through effective use of
motivated health cadres at the grassroots level also received widespread attention. Out of this
rethinking, grew various models of community health programs that emphasized decentralized
curative services. In these, trained village-level workers played a key role. Much more importance
was given to preventive aspects, where the community plays a more effective part in their ‘own’
health care. Unfortunately, this refreshing trend too ignored the important role of traditional healers
and dais in health care and very little attention was paid to the Indian systems of medicine.
The voluntary health effort as it exists today can be broadly classified as follows:
• Specialized Community Health Programs: Many of them go a little beyond health, by running
income-generation schemes for the poorer communities so that they can meet their basic nutritional
needs.
• Integrated Development Programs: In these programs, health is a part of integrated development
activities. Consequently, their emphasis on health care may not be as systematic or as effective as that
of the previous group. However, the long-term impact of their work on health and the development of
the community is significant.
• Health Care for Special Groups of People: This includes education, rehabilitation and care of the
handicapped. These specialized agencies are playing an important role, keeping in view the fact that
hardly any government infrastructure exists in this sector of health care.
• Government Voluntary Organization: These are voluntary organizations which play the role of
implementing government programs like Family Planning and Integrated Child Development
Services. These bodies are marginally more efficient than the government system but their overall
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approach is the same.

• Health Work Sponsored by Rotary Clubs, Lions Clubs and Chambers of Commerce: They usually
concentrate on eye camps – conducting cataract operations in the rural areas on a large scale with the
help of various specialists, etc.
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• Health Researchers and Activists: The efforts of these groups are usually directed towards writing
occasional papers, organizing meetings on conceptual aspects of health care and critiquing
government policy through their journals (which usually have limited circulation).
• Campaign Groups: These groups are working on specific health issues, such as a rational drug
policy and amniocentesis, among others.
VOLUNTARY HEALTH ASSOCIATION OF INDIA
Voluntary Health Association of India (VHAI) is a Delhi-based national network of more than 4000
non-governmental organizations spread across the country. It is one of the world’s largest associations
of voluntary agencies working in the areas of health and development. VHAI was founded in 1970
with the goal of “making health a reality for all the people of India.” To achieve this goal, VHAI
promotes social justice and human rights in the provision and distribution of health care, with an
emphasis on the disadvantaged millions. VHAI believes that such an equitable health care system
should be culturally acceptable, universally accessible and affordable. VHAI envisions a sustainable,
rational and dynamic health planning and management system in the country with the active
participation of the people.
VHAI’s Partnership with the Government
Given VHAI’s presence in almost every corner of India and its technical and professional
competence, we have been able to develop a relationship of mutual trust and confidence with the
government. This has resulted in a situation where in many areas of common concerns, like
reproductive and child health, HIV/
AIDS, people-centered community health care as well as health promotion, VHAI is working closely
with the Government of India, very often supported by the government financially and otherwise.
This relationship has not been without its frustrations but given the size and complexity of the
government machinery and its old bureaucratic tradition, the relation has not been too unfulfilling.
Towards a More Fruitful Partnership between the Governmentand Voluntary Sector
A National Co-ordination Committee, consisting of the Director General Health Services, Secretary
(Health), three representatives from voluntary organizations and one representative from the state
government, should work as an active listening post for the voluntary agencies working in the field of
health. This committee should meet periodically to monitor the implementation of the committee’s
recommendations, and provide inputs on the planning and implementation of health services in the
country. Its functions should include:
• Promoting collaboration and co-operation between the government and voluntary organizations in
primary health care.
• Identifying people’s health needs and bringing them to the notice of planners.
• Assisting in developing comprehensive national health policies and action plans at all levels.
• Working out the modalities of administrative relationships between the government and voluntary
organizations for health care delivery to the people.
• Identifying voluntary organizations at the state, district and block level which are capable of taking
up, in collaboration with government agencies, health education, and primary health care services and
operational research.
• Monitoring and providing feedback to the government on various National Health Programs.
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• Providing guidance and support to voluntary organizations in the health field.

• Calling an annual convention of all voluntary organizations in health, to provide healthy interaction
between the health functionaries responsible for policy-making and planning at the national level and
various representative voluntary organizations.
• Updating the national directory of voluntary organizations.
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• Organizing periodic quarterly meetings of the National Co-ordination Committee.

• Sanctioning innovative projects in the voluntary sector to conduct research, health service delivery
and the production of educational materials.
• Screening, monitoring, and evaluating, as well as providing support to all the sanctioned projects.
The National Co-ordination Committee should evolve a working mechanism with a state-level
counterpart. Its activities should be aimed at:
• Preparing and updating a state-level directory of voluntary organizations in the health sector.
• Convening a people’s health assembly annually, comprised of information leaders, religious leaders,
trade unions, media representatives, policy-makers, planners and voluntary organizations.
• Identifying voluntary organizations that have the training and resource potential to undertake
orientation programs for the government and other voluntary organizations.
• Responding quickly to epidemics.
• Meeting quarterly for effective co-ordination and cooperation.
• State health secretaries should act as conveners to the state co-ordination committees.
• To search for means to join together in a broader struggle for social justice with other progressive
forces.
• To systematically and effectively take up issues of socio-economic justice in the areas where they
are operating.
• To work systematically towards a viable alternative health strategy.
• To build up general awareness on rational and holistic health among the public at large, so that a
conducive atmosphere is created for a shift in policy.
• To build up an atmosphere for greater public accountability of existing government health
infrastructure.
• To build up a consumer movement to ensure quality health care at a reasonable cost from the private
sector.

PARTNERSHIP TO MEET THE FUTURE CHALLENGES

Analysis of available data shows there is uneven health and development progress in various parts of
the country. Often this difference is so dramatic that one can hardly believe that they are part of the
same nation and have followed the same development path for the last five decades.
Even within the states that are doing reasonably well, there remain regions of darkness where little has
changed since Independence. Obviously, these parts of the country should be of major concern in the
coming decades.
We are also living under two shadows in India: the familiar one of infectious diseases like malaria,
tuberculosis, etc., and the new and growing cases of non-infectious chronic diseases like cancer and
coronary diseases.
Instead of moving forward to meet newer health challenges, it is sliding backward. Over-centralized
and lopsided planning, inadequate and unbalanced financial outlays, lack of accountability to
communities, low moral values and, very often, dereliction of duty by medical and nursing
professionals plague the system.
The voluntary sector, though their overall presence is limited, is playing a significant role in providing
innovative and quality health services to the needy in remote areas. There is a need to create an
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enabling climate for them to grow further, especially in those pockets of the country where the overall
health and
development situation remains grim.
Recently launched long-term programs to meet some of the above challengesare mostly
selective, large vertical programs on AIDS, Malaria, Tuberculosis and Immunization, principally
PUBLIC PRIVATE PARTNERSHIP

supported by international organizations. Convergence of these programs with existing primary health
care priorities would have had the possibility of revitalizing the primary health care infrastructure. It
is very important to review and recast these selective programs. Often, these new programs do not
even follow the basic framework and priorities of the Five-Year Plan document.
In spite of numerous well-meaning but centralized, unimaginative economic development schemes of
the government, the grim tale of poverty and underdevelopment of millions of our citizens remain
overwhelmingly distressing.
The time has come for us to stand up and recognize this growing menace and change the
direction of our poverty eradication programs to a decentralized, imaginative and participatory model,
as has been exemplified by many voluntary organizations.
The economic development of one-third of our total population needs to be undertaken with
appropriate inputs for their social development.

BENEFITS OF PUBLIC-PRIVATE PARTNERSHIPS

 The emergence of PPPs is seen as a sustainable financing and institutional mechanism with the
potential of bridging the infrastructure gap.
 PPPs primarily represent value for money in public procurement and efficient operation.
 Apart from enabling private investment flows, PPPs also deliver efficiency gains and enhanced
impact of the investments.
 The efficient use of resources, availability of modern technology, better project design and
implementation, and improved operations combine to deliver efficiency and effectiveness gains
which are not readily produced in a public sector project.
 PPP projects also lead to faster implementation, reduced lifecycle costs, and optimal risk
allocation.
 Private management also increases accountability and incentivizes performance and maintenance
of required service standards.
 PPPs result in improved delivery of public services and promote public sector reforms.
 PPPs represent enormous, long-term business opportunity,
PPP STRENGTHS AND EFFECTIVENESS
• Robust and dynamic structure;
• Government in an enabler role;
• Government ownership is high;
• Governance structure ensures consumer and public interests are safeguarded;
• Commercial interest protected;
• Domicile risks to parties that are well equipped to deal with them;
• Transparent and well-conceived contracts;
• Documentation recognizes rights and responsibilities of all project-related parties;
• Concerns of all stakeholders addressed;
• Involves participation of a large number of institutions: government, politicians, banks, financial
institutions, investors, contractors, consumers, NGOs, etc.
WHAT GOVERNMENTS SHOULD NOT DO IN A PPP PROJECT
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• Offer a project without detailed project development;Nmake commitments that cannot be kept;
• Change goalposts after award of concession and revisit project design; not recognize that each
project is a business and not a mere asset;
• Regret that the business is profitable within the framework agreement;
• Superimpose public processes on private initiatives; and
• Not fully exploit the capacity of the business to grow in the state
PUBLIC PRIVATE PARTNERSHIP

... And What They Should Do

• Protect officers who take the initiative on PPP;
• Align the economic interest of all stakeholders;
• Define PPP projects on a holistic basis;
• Induct the private sector as partners;
• Establish frameworks that permit failures; and
• Encourage plurality of approaches.
POLICY REVIEW FOR PUBLIC-PRIVATE PARTNERSHIP IN HEALTH
An intensive review and inventory of the current private and public resources – which areas are
adequately covered by private sector, which by public facilities and which still underserved –should
be undertaken before implementation. This applies to both geographic coverage and technical health
activities.
For geographical coverage, a Global Information System study could map out where the
underserved areas are located. It could also show urban areas that are adequately covered by private
clinics and hospitals where the only need may be ensure that the poor are also given place in these
facilities. For remote areas, a geographic area could be mapped out which could be contracted out to a
competent NGO or other medical group for all essential even curative services.
For technical and functional areas, a health system review could highlights those areas
where the private sector role is integral to improved health.
State level policy changes may be required to harness the power of private providers.
These may include--
 Accreditation programs for MBBS and alterative system doctors and may also require
consideration of training and/or regularization of unregistered rural medical practitioners.
 Consideration may also be given to formalizing the private practices of government doctors, so
that there is synergy rather than competition.
 A Government health department needs to monitor and control carefully to ensure quality services
are available at affordable prices.

REFERENCES
1. http://www.idpad.org/pdf/3.6.pdf
2. http://www.idpad.org/pdf/DR.%20A.%20VENKAT%20AND%20Bjorkman-%2004.pdf
3. http://www.en.wikipedia.org/wiki/Public_private_partnership
4. http://www.pepfar.gov/pepfar/press/79673.htm
5. http://www.south.du.ac.in/fms/idpad/Project_proposal.htm
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