Multiple-choice questions (MCQs) with answers for Civil Services Examination on the topic “Public-Private Partnership in India: Successes and Failures.”

1. What is a Public-Private Partnership (PPP)?

A. A government-led project
B. A collaboration between the government and private sector for infrastructure development
C. A partnership between two government entities
D. A partnership between two private companies
Answer: B

2. Which of the following sectors has seen the most PPP projects in India?

A. Agriculture
B. Healthcare
C. Transport and Infrastructure
D. Tourism
Answer: C

3. What is the primary objective of PPP in India?

A. To reduce government expenditure
B. To involve the private sector in policy-making
C. To accelerate infrastructure development
D. To enhance FDI
Answer: C

4. The 2011 “KPMG Report on PPP” in India highlighted which challenge?

A. Excessive public sector involvement
B. Lack of private sector interest
C. Delays in project approvals and land acquisition
D. High cost of PPP projects
Answer: C

5. In which year was the PPP model formally introduced in India?

A. 1991
B. 2000
C. 2005
D. 2010
Answer: C

6. The “Hybrid Annuity Model” (HAM) used in road projects is a combination of which two models?

A. EPC and BOT
B. Annuity and BOT
C. EPC and Annuity
D. BOT and Lease
Answer: A

7. In a Build-Operate-Transfer (BOT) model, who assumes responsibility for the construction and operation of the project?

A. The government
B. The private sector
C. A joint venture of government and private sector
D. None of the above
Answer: B

8. Which of the following is NOT an example of a PPP project in India?

A. Delhi Airport
B. Bandra-Worli Sea Link
C. Delhi Metro
D. Kisan Vikas Patra
Answer: D

9. What is one of the primary reasons for PPP project delays in India?

A. Over-competition among private players
B. Clear policy guidelines
C. Land acquisition issues
D. Rapid financial closure
Answer: C

10. Which organization plays a crucial role in promoting PPP in infrastructure projects in India?

A. NITI Aayog
B. RBI
C. Ministry of External Affairs
D. Planning Commission
Answer: A

11. The viability gap funding (VGF) provided by the government for PPP projects is intended to:

A. Increase project costs
B. Support projects that are economically viable but not financially attractive
C. Completely finance the private sector’s share
D. Minimize public investment
Answer: B

12. Which of the following is a failure of the PPP model in India?

A. Delhi Metro Phase 1
B. Hyderabad Metro Rail
C. The GMR Male Airport project
D. Jawaharlal Nehru Port Container Terminal
Answer: C

13. Which legal framework governs PPPs in India?

A. Companies Act 2013
B. Indian Contract Act 1872
C. National Infrastructure Pipeline (NIP)
D. There is no single governing legal framework
Answer: D

14. What percentage of the cost does the government bear in a “Hybrid Annuity Model” (HAM)?

A. 20%
B. 40%
C. 60%
D. 80%
Answer: B

15. Which of the following is considered a successful PPP project in India?

A. Enron Dabhol Power Project
B. Cochin International Airport
C. Tata Nano Plant
D. SEZ in Gujarat
Answer: B

16. Which of the following is a key challenge for PPPs in the health sector in India?

A. Lack of private players
B. Over-regulation
C. Affordability and accessibility issues
D. Technology limitations
Answer: C

17. In PPP, who bears the financial risk in a “Build-Own-Operate” (BOO) model?

A. Private sector
B. Government
C. Shared equally
D. Local community
Answer: A

18. What was the main reason for the failure of the Delhi-Gurgaon Expressway PPP project?

A. Lack of toll revenues
B. High maintenance costs
C. Poor traffic management and toll collection
D. Delay in land acquisition
Answer: C

19. Which of the following best describes the “Swiss Challenge Method” used in PPP?

A. Government seeks competitive bids for an unsolicited proposal from the private sector
B. Private sector challenges the government on cost overruns
C. Private companies bid only on infrastructure projects
D. Government invites foreign private players for collaboration
Answer: A

20. Which authority oversees PPP projects in highways and roads in India?

A. NHAI (National Highways Authority of India)
B. SEBI
C. TRAI
D. Airports Authority of India
Answer: A

21. Which of the following is an advantage of PPP in infrastructure?

A. Low initial capital investment by private companies
B. Risk sharing between public and private sectors
C. Complete government control over pricing
D. No need for government regulation
Answer: B

22. Which key sector has struggled to implement successful PPP projects in India?

A. Power
B. Telecommunications
C. Education
D. Roads
Answer: C

23. Which type of PPP contract allows the private entity to own the infrastructure permanently?

A. Build-Operate-Transfer (BOT)
B. Build-Own-Operate (BOO)
C. Design-Build-Finance-Operate (DBFO)
D. Operate-Maintain-Transfer (OMT)
Answer: B

24. Which of the following mechanisms helps make economically unviable PPP projects financially viable?

A. Annuity payments
B. Debt waiver
C. Viability Gap Funding (VGF)
D. Equity dilution
Answer: C

25. Which Indian city saw the PPP model successfully implemented in its solid waste management system?

A. Bengaluru
B. Pune
C. Mumbai
D. Ahmedabad
Answer: B

26. What is the purpose of the PPP Cell in the Department of Economic Affairs (DEA)?

A. To monitor inflation
B. To provide guidelines and support for PPP projects
C. To approve all private-sector investments
D. To regulate financial markets
Answer: B

27. Which PPP model has been criticized for resulting in significant delays in highway projects due to financing issues?

A. EPC (Engineering, Procurement, and Construction)
B. BOT (Toll)
C. DBFO (Design-Build-Finance-Operate)
D. HAM (Hybrid Annuity Model)
Answer: B

28. Which body in India facilitates dispute resolution in PPP projects?

A. Competition Commission of India
B. NHAI Dispute Resolution Board
C. PPP Appellate Tribunal
D. NITI Aayog
Answer: B

29. What is a key success factor for PPP projects in India?

A. Involvement of multiple stakeholders
B. Clear risk allocation between public and private entities
C. High-interest rates on loans
D. Government control over private sector profits
Answer: B

30. The success of PPP in India’s metro rail projects, like Delhi Metro, is primarily attributed to:

A. Complete private sector ownership
B. Government’s initial financial support and clear policy framework
C. Lack of competition
D. High public sector involvement in construction
Answer: B

These questions provide a comprehensive understanding of the PPP model’s successes and challenges in India, making them relevant for the Civil Services Examination.