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Social Infrastructure

'Build and operate' increasingly common in social infrastructure

Simile Karasavidis's picture


Photo:  Northern Beaches Hospital | New South Wales Ministry of Health

The way that social infrastructure is being built and paid for is changing. New healthcare facilities, prisons, and public housing have long been constructed under public-private partnerships (PPPs), but the PPP model is now stretching into the operation of the facilities.

Called “operator-led PPPs”, this approach puts the private sector in charge not just of the construction of infrastructure but of the operation of services afterwards for a defined period. For instance, in a hospital PPP the private company would provide clinical services such as x-rays as well as the building. This is also known as an outcomes-based PPP.

This approach transfers operational risks from the state body to the private partner, but the state still retains oversight of the quality of service through key performance indicators, service criteria, and performance standards. Financial penalties are put in place for failure to meet the required standards.

Growth Centred Approach Under PURA: The Way Forward for the World Bank India Country Partnership Strategy 2013-2017

Abhilaksh Likhi's picture

The broad objective of the World Bank’s India Country Partnership Strategy Report (CPS) for the period 2013-2017 is to support poverty reduction and shared prosperity in India. The Report states that between 2005 and 2010, India’s share of global GDP increased from 1.8 to 2.7% and 53 million people were lifted out of poverty. But it also states that with population growth, it has proved difficult to reduce the absolute number of poor at a rapid pace and 400 million Indians still live in poverty. Each of the seven low income states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan; Uttar Pradesh)  and seven special category states (Assam, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Uttrakhand) have poverty rates that are higher than that of the more advanced states. The low income states, where a large majority of the poorest 200 million Indians reside, are a priority for the World Bank Country Strategy funding during 2013-2017 (estimated to be $ 5 billion annually with 60 percent lending through direct financing of state projects of which half will go to low income and special category states).

India, both in the above mentioned and its advanced states (e.g. Punjab, Haryana, Kerala) is undergoing a massive rural- urban transformation- one of the largest in the 21st century. For the first time since independence, India has seen a greater absolute growth in urban population. The number of towns has increased from about 5000 in 2001 to 8,000 in 2011 and some 53 cities have a population exceeding one million. Today 30.1 percent of the population lives in urban areas and the share is expected to rise to 50% in the next 20 years (with urban India expected to generate 70% of its GDP by 2030). Though villages vastly outnumber towns in India (660,000 villages as per Census 2011), the construct of these villages is changing as the economy grows.