Public - Private Partnership Model (PPP Model)
Public-Private Partnership Model Government has ruled out taking the support of private companies in reviving sick Central Public Sector Enterprises, predecessor that had floated the idea. PSUs to come to the aid of weaker ones, In Sep 2013 the UPA govt. explored options for revival of these PSUs through a tip-up with Private companies in the Public-Private Partnership Model.
The Proposal never took off due to the lack of synergy between the PSUs and the Private Companies.
One reason for ruling out equity participation from private companies relates to the surplus land with the PSUs. The government felt that there could be a conflict on ownership and utilization if joint ventures were to take place. The government has an alternate solution within the PSU sphere. There are expectations that potentially profitable CPSEs can register a turnaround within the next five years.
These could then bail out the weaker units by exploring greater synergy. As of 2014, there are 50 CPSEs, which are making losses over the past three consecutive years.
04 Nov 2014