Advantages And Disadvantages Of Ppp Model

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upon introduction of PPP model, it can be said with certainty that ISRO might follow PPP model. The architecture of PPP model is given in fig 7. Public private partnership involves better procurement and public sector reform with better strategic planning. It is not just about free infrastructure and simply inclusive of finance. PPP model does not plainly involve upon building infrastructure but rather on building and maintaining good infrastructure. PPP model provides better services for the tax payer with sharing of risk between most appropriate parties. It is mainly about public and private sectors working together and not a method to make a bad project good. 3.3 Advantages of PPP model The financial crisis of 2008 onwards brought about…show more content…
A number of the PPP and implementation units around the world have developed methods for analyzing these costs and looking at Value for Money.  There is a cost attached to debt – While private sector can make it easier to get finance, finance will only be available where the operating cash flows of the project company are expected to provide a return on investment (i.e., the cost has to be borne either by the customers or the government through subsidies, etc.)  Some projects may be easier to finance than others (if there is proven technology involved and/ or the extent of the private sectors obligations and liability is clearly identifiable), some projects will generate revenue in local currency only (eg water projects) while others (eg ports and airports) will provide currency in dollar or other international currency and so constraints of local finance markets may have less…show more content…
Government will also need to retain sufficient expertise, whether the implementing agency and/ or via a regulatory body, to be able to understand the PPP arrangements, to carry out its own obligations under the PPP agreement and to monitor performance of the private sector and enforce its obligations  The private sector is likely to have more expertise and after a short time have an advantage in the data relating to the project. It is important to ensure that there are clear and detailed reporting requirements imposed on the private operator to reduce this potential imbalance  Due to long-term nature of these projects and the complexity associated, it is difficult to identify all possible contingencies during project development and events and issues may arise that were not anticipated in the documents or by the parties at the time of the contract. There may be a need to renegotiate the terms and agreements. It is possible some project may fail for reasons like changes in government policy or failure by one of he parties to complete their responsibilities. While some of these issues will be able to be addressed in the PPP agreement, it is likely that some of them will need to be managed during the course of the
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