How public private partnerships must evolve to create social impact.

Byline: Chirag Jain

Every human being has the right to water, sanitation, economic growth, education and health. These are some of the goals that the United Nations has envisaged in the form of the 17 Sustainable Development Goals, which it wants nations and governments to achieve by 2030.

Our right to sanitation and water, for example is a human right, as recognised by the United Nations, and is SDG No 6. However, 2.2 billion of the population still don't have access to safe drinking water services, according to the UN Children Joint Monitoring Programme and World Health Organization (WHO). Meanwhile, 4.2 billion people more than half the world's population still have no access to safely managed sanitation services. UNICEF's Water Sanitation and Hygiene (WASH) assessment shows that 946 million people still defecate in the open.

As a Brookings Institution report estimates, it may take anywhere between $5- and $7 trillion annually for developing countries to achieve the SDGs by 2030. For India, the financing gap is $565 billion.

How PPPs can help

So, the chasm between how far we have come and how far we need to go is still a wide one. Government resources alone are typically not sufficient to close the gap. An effective way to do so is through public private partnerships (PPPs).

There is no one definition for a PPP, but it is broadly acknowledged that a PPP is a contract between a government body and a private one to deliver a public service or provide an asset for the public. The contract is a long-term one, and the risk is borne by the private party. Returns are linked to how well the private firm performs.

A win-win situation for all stakeholders

PPPs can be a win-win for all stakeholders concerned. The government body or state benefits by achieving its goals; the private firm has a positive social impact and boosts its revenues; while the customer, or end-user, benefits from the service.

There are different types of PPPs, including but not limited to Build-Operate-Transfer, Design-Build-Operate, concessions, joint ventures, service contracts, affermages in which the private company operates and maintains the asset but does not finance it and leases. The choice depends on the government and the private investor, and also the nature of the project.

Singapore's new sustainable water supply and sanitation system is a good example of a PPP model for sanitation-related projects. The model, first introduced in the early 2000s, has been very...