i) government departments or agencies and bodies and entities under them on the one part and selected private sector parties on the other will enter into valid and legal contracts;

ii) partnership between the two will be to provide long term public services (and/or goods) of required quality;

iii) the public sector will, while transferring the responsibility to design, construct and/or operate the project to the private sector, retain the overall responsibility to provide the public service;

iv) the private sector will bring in the required finance either fully or substantially to complete the project and to operate it, with the public sector providing right to revenue likely guarantees to financiers or viability gap funding / annuity in appropriate cases;

v) the public sector will assign the right to collect revenues arising from the project to the private sector for a defined period based on demand projections, or pay grants or annuity and/ or agree to share any surplus, subject to a balanced sharing of the risks and gains;

vi) value for money will be the basic criterion for the public sector to enter into the arrangement." [emphasis supplied]

PPPs are not private entities

The C&AG is very clear that PPPs are not the outcomes of any policy of privatisation. At para 1.5.1 of its auditing guidelines it says as foloows:

"1.5.1 The main difference between PPP and privatization is that in the former there is no permanent transfer of ownership of the assets to the private partner and moreover, the public sector agency remains accountable for providing services of the required quality. Thus, the responsibility and accountability to deliver the goods and services efficiently remains with the public sector, which is not diluted because of the PPP arrangement. On the other hand, in privatization, not only the ownership is transferred to the private sector, but the accountability is also shifted totally to the purchaser, though the government may set standards and retain price / quality control by establishing appropriate regulatory mechanism, as per the relevant legislation." [emphasis supplied]

"...Public auditors while auditing the PPP Joint Ventures of the State Governments should treat these guidelines as the best practice where the State Governments have not brought out such guidelines...

1.9.4 In some States, the management and running of schools have been transferred to  private management, by leasing the school buildings and other infrastructure facilities, subject to conditions. The private management may receive annuity payments for the management of the schools. Such public private partnerships are subject to public audit; and the guidelines included in this document could be usefully adopted to test their efficiency and effectiveness." [emphasis supplied]

If they have not done so already, readers may start filing RTI applications seeking copies of audit reports of PPP projects underway in their areas. Let us start making PPPs transparent bit by bit while demanding that they be officially recognised as public authorities under the RTI Act.