DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE
Economic and Legal Analysis of Public Private Partnership

SUBJECT
Economics-II

NAME OF THE FACULTY

Abbishek

Ayush Pandey
2016017
SEMESTER III
 ACKNOWLEDGEMENT

I deem it great pleasure to express my immense gratitude to Mr Abhishek Sinha sir

for providing me with this opportunity and for his meticulous support in completion
of the project.

Date:

Place:
Aakash Sharma
2016001
 Content

Sr. no Topic Pg. no.

1. Background

2. Introduction to Public Private Partnerships

(PPP)

2.1 Introduction

2.2 Definition

2.3 Need and Relevance of Public Private

Partnership in India

3. Public Procurement and Concessions

3.1 Developing Statutory Framework for

Concession Agreements

3.2 Non Compete element in Concession

Agreements

4. Implications of the Right to Information Act in

Public Private Partnership

5. Relation between Public Procurement and Public

Private Partnerships

6. Economic Theory

6.1 Challenge and Barrier

7. Conclusion

8. Bibliography
1. Background
The concept of Public Private Partnerships (PPPs) has emerged as a viable option for
infrastructure development especially in the context of developing countries. PPPs are
emerging as an innovative policy tool for remedying the lack of enthusiasm in
traditional public service delivery. They represent a claim on public resources that
needs to be understood and assessed. They are often complex transactions, needing a
clear specification of the services to be provided and an understanding of the way
risks are allocated between the public and private sector.

In the context of developing countries, the recent increase in PPPs has been attributed
to several reasons such as the desire to improve the performance of the public sector
by employing innovative operation and maintenance methods; reducing and
stabilizing costs of providing services; reinforcing competition; and reducing
government budgetary constraints by accessing private capital for infrastructure
investments.

Private sector involvement in the delivery of public services is not a new concept;
PPPs have been used for over three decades, predating the contracting out initiatives
of 1970s in the USA. Initially focusing on economic infrastructure, PPPs have
evolved to include the procurement of social infrastructure assets and associated non-
core services. In Asia, countries like China, Malaysia and Thailand started some
projects with private participation in mid 1980s in one sector or so, but later on in the
1990s most of the countries in the region involved private sector in the provision of
one or more of the infrastructure facilities.

This chapter sheds light on the PPP concept and the rationale for increasing use of
PPP projects in developing countries. It also discusses the evolution of PPP at the
international level as well as in Asia and India. Finally, this chapter discusses the
current status of PPP projects in India at the central and state level as well as in
various sectors.
2. Introduction to Public Private Partnerships (PPP)

2.1Introduction:

Indian economy is growing at a very fast pace and it has a dynamic and robust
financial system. A stable policy environment is ensured by its democratic status and
its independent institutions guarantee the rule of law. This highly diversified economy
has shown rapid growth and remarkable resilience since 1991, when economic
reforms were initiated with the progressive opening of the economy to international
trade and investment.

The most significant criteria for a continued growth rate of an economy is the
provision of a quality infrastructure. According to the Planning Commission, an
approximation of 8 percent of the Gross Domestic Product needs to be invested.

This would help in acquiring a prospective economy as stated in the 11th Five Year
Plan. Fund investment of over US $ 494 billion has been conceived of according to
the 11th Five Year Plan with effective from 2007 to 2012. The investment sectors
under consideration are inclusive of telecommunications, electric power, transport,
road, rail, air, water supply as well as irrigation.

In order to meet such demands, various Public Private Partnerships or PPPs are being
promoted for implementation of infrastructure projects. PPP is often described as a
private business investment where two parties comprising government as well as a
private sector undertaking form a partnership. The deficit can be overcome by
ensuring much more private capital investment. Expert guidance is the only way out
for enabling efficiency through subsequent reduction in cost.

Governments embarking on PPP programs have often developed new policy, legal
and institutional frameworks to provide the required organizational and individual
capacities. These go beyond that needed to originate and financially close PPP deals,
as they must also ensure that these deals are affordable to users and the public sector
and provide ex-post evaluation of the success of PPPs in meeting their objectives.
This framework needs to be in place in India to ensure a robust and successful PPPs
program.

2.2 Definition:

According to the Department of Economic Affairs, Ministry of Finance, Government

of India, 2007, PPP is defined as A partnership between a public sector entity
(sponsoring authority) and a private sector entity (a legal entity in which 51% or more
of equity is with the private partner/s) for the creation and/or management of
infrastructure for public purpose for a specified period of time (concession period) on
commercial terms and in which the private partner has been procured through a
transparent and open procurement system.

Thus, in Indian context we can say Public Private Partnership (PPP) Project means a
project based on a contract or concession agreement, between a Government or
statutory entity on the one side and a private sector company on the other side, for
delivering an infrastructure service on payment of user charges.

PPPs do not mean reduced responsibility and accountability of the government. They
still remain public infrastructure projects committed to meeting the critical service
needs of citizens. The government remains accountable for service quality, price
certainty, and cost-effectiveness (value for money) of the partnership. Government
remains actively involved throughout the projects life cycle. Not all projects with
private sector participation are PPP projects. Essentially, PPPs are those ventures in
which the resources required by the project in totality, along with the accompanying
risks and rewards/returns, are shared on the basis of a predetermined, agreed formula,
which is formalized through a contract. PPPs are different from privatization. While
PPPs involve private management of public service through a long-term contract
between an operator and a public authority, privatization involves outright sale of a
public service or facility to the private sector. A typical PPP example would be a toll
expressway project financed and constructed by a private developer.

Typically, a PPP project involves a public sector agency and a private sector
consortium, which comprises contractors, maintenance companies, private investors,
and consulting firms. The consortium often forms a special company or a special
purpose vehicle (SPV). The SPV signs a contract with the government and with the
subcontractors to build the facility and then maintain it. This partnership could take
many contractual forms, which progressively vary with increasing risk, responsibility,
and financing for the private sector.

Thus, the PPP combines the development of private sector capital and sometimes,
public sector capital to improve public services or the management of public sector
assets (Michael, 2001). The PPP may encompass the whole spectrum of approaches
from private participation through the contracting out of services and revenue sharing
partnership arrangement to pure non-recourse project finance, while sometime it may
include only a narrow range of project type. The PPP has two important
characteristics. First, there is an emphasis on service provision as well as investment
by the private sector. Second, significant risk is transferred from the Government to
the private sector. The PPP model is very flexible and discernible in variety of forms.

The PPP is not a privatization. At the same time, it cannot be described as

partial privatization also. Privatization has generally been defined as a process of
shifting the ownership or management of a service or activity, in whole or part, from
the government to the private sector. The privatization may be of many forms, which
include outsourcing, management contracts, franchise, service shedding,
corporatization, disinvestment, asset sales, long-term lease, etc. The key difference
between the PPP and privatization is that the responsibility for delivery and funding a
particular service rests with the private sector in privatization. The PPP, on the other
hand, involves full retention of responsibility by the government for providing the
services. In case of ownership, while ownership rights under privatization are sold to
the private sector along with associated benefits and costs, the PPP may continue to
retain the legal ownership of assets by the public sector. The private provider
determines the nature and scope of the services under privatization, while it is
contractually determined between the parties in PPP. Under privatization, all the risks
inherent in the business rest with the private sector while, under the PPP, risks and
rewards are shared between the government and the private sector.

Under the PPP format, the government role gets redefined as one of facilitator and
enabler, while the private partner plays the role of financier, builder, and operator of
the service or facility. PPPs aim to combine the skills, expertise, and experience of
both the public and private sectors to deliver higher standard of services to customers
or citizens. The public sector contributes assurance in terms of stable governance,
citizens support, financing, and also assumes social, environmental, and political
risks. The private sector brings along operational efficiencies, innovative
technologies, managerial effectiveness, access to additional finances, and construction
and commercial risk sharing.

PPPs often involve complex planning and sustained facilitation. Infrastructure

projects such as roads and bridges, water supply, sewerage and drainage involve large
investment, long gestation period, poor cost recovery, and construction, social, and
environmental risks. When infrastructure is developed as PPPs the process is often
characterized by detailed risk and cost appraisal, complex and long bidding
procedures, difficult stakeholder management, and long-drawn negotiations to
financial closure. This means that PPPs are critically dependent on sustained and
explicit support of the sponsoring government. To deal with these procedural
complexities and potential pitfalls of PPPs, governments need to be clear, committed,

and technically capable to handle the legal, regulatory, policy, and governance issues.

2.3 Need and Relevance of Public Private Partnership in India

With time, the government is facing constraints as to mobilization of technological,
financial and executive resources. There is an increase in the demands of social
infrastructure and related services due to which most of the developing countries are
facing financial deficit. Public Private Partnership comes forward as innovative
method of sustainable financing in which the private sector is attracted through a
mutually beneficial arrangement. Public Private Partnership enables optimum
utilization of resources, availability of modern technology, better project design and
implementation. These factors combine to deliver effective gains not an immediate
outcome of public sector projects. Due to prolonged gestation period, and a practical
degree of commercial, social and economic risks involved in the development of
infrastructure there appears to be reluctance on the part of both the sectors to absorb
all risks and costs of building up such assets. India faces large discrepancies in the
demand and supply of socio-economically essential infrastructure and services despite
being one of the fastest growing economies of the world.
Over 40% of the population does not have access to electricity and all weather roads.
The shortage of infrastructure facilities in India has proved to be the leading obstacle
in sustaining and expanding the countrys competitiveness and economic growth.6
The most significant impact is reflected in the low levels of Foreign Direct
Investment. The government does recognize such difficulties and emphasizes on the
instrumental role played by infrastructure development in the growth of an economy.
The intention of the government can well be understood from the diverse programmes
employed viz. National Highway Development Program (NHDP), Bharat Nirman
Yojna, Jawaharlal Nehru National Urban Renewal Program (JNNURP), etc. But, the
unfortunately the fact is that the requirement exceed the limited resources
exorbitantly. It was estimated that India needs to increase its Infrastructure
Expenditure 8% of the GDP by 2010 in order to sustain an adequate growth rate7 yet
the current expenditure on Infrastructure remains to be 6% only. The combined deficit
of the State and Union government is round about 10% of the GDP. Moreover the
borrowing of the government is restricted by the Fiscal Responsibility and Budgetary
Management Act, 2009 which curtails the borrowing capacity of these organs. In the
contemporary context the contribution of private sector has become necessary for
infrastructure expansion and development.

3. Public Procurement and Concessions

Public Procurement is acquisition of works, supplies, goods and services by public

bodies ranging from routine supplies or services to formal tendering of contracts for
infrastructural projects. Each country follows certain core principles of procurement
policy- accountability, competitiveness, equality and transparency. The Indian Policy
aims at capacity building to manage, procure, maximize benefits, reduction of costs
and increasing efficiency trough efficient technology (e procurement). The main
aim for the procurement policy is to achieve value for money.11 Mere price is not the
only variable to be considered. This phrase is inclusive of various other non cost
factors like sufficient quality and use of the procured for purposes intended to. For the
purpose of value for money the entire transaction- acquiring, use, holding, and
disposal is taken into account. Value for Money is therefore, the combination of price
and / or non cost factors to meet the requirements and obligations towards the
potential users (community), to provide cost effective public services and optimum
utilization of resources. There are various procurement methods and the applicability
of a particular method often depends upon the value of the contract. For example, in
India the procurement for assets, services etc. exceeding INR 1.2 million ($ 54,000)
must be done trough open tendering only.

In traditional public works, concessions and general public procurement (public

contracts) were regarded as separate concepts. In public contracts the public authority
pays consideration to the private players whereas in concessions the private party
receives remuneration directly from the users in the form of fees, etc. The point of
argument between various scholars as been whether Public Procurement Law applies
to concession agreements? Some are of the point of view that both are distinct and
should have separate legal strictures. On the other hand, it is more logical to
encompass tem under a single umbrella since the only real point of distinction
remains the mode of remuneration. The European Union Procurement Directive
2004/1814 defines concessions as- the contract of the same type as public works
except for the fact that the consideration for the work to be carried consists either
solely in right to exploit the work or in the right together with payment

This directive does not expressly lay down that the government authority cannot pay
any remuneration to the private authority. In practice the government does subsidize
rates for the public indirectly paying to the private parties the net amount. Another
example is of the shadow toll in which the government pays the private parties the
price of one kilometre usage of the road per vehicle according to the agreed price
structure. Legally such methods of remuneration are sufficient to construe a valid
concession agreement.15 It is therefore not necessary for the remuneration to come
from a third party or user. In the context of Public Private Partnership (as opposed to
traditional context) the distinction between concession PPPs and public works PPPs is
blurred and difficult to ascertain. To the contrary distinction is ought to be made
between tradition public works and services contracts and PPP- type arrangement.

3.1 Developing Statutory Framework for Concession Agreements

There is a need in a developing country like India to have a legislative framework for
regulating concession - type agreements that would incorporate certain core
principles, which require our notice in order to assist the government bodies
especially in relation to, privately finance infrastructure projects.

1. Enumerating nature and purpose of projects for which concession may be granted
by either listing various categories of projects and defining the rights and obligations
of the parties thereto; or providing either of the parties the right to charge fees for the
use of the facilities by others and / or other remuneration as agreed upon.

2. Power of the Public Authorities.

3. Such a law should also contain general prepositions of a concession agreement

(duration, mode of payment, dispute resolution etc.)

4. Procedure regarding selection of the private party (concessionaire) should be

clearly laid down as to proposals, special qualification and evaluation criteria (in the
long term, as well), scope of negotiation, limiting the number of bidders etc. This
should also include the scope of the government to enter into negotiations with a
single party in cases of emergency, national security, exclusive know how and alike
and not otherwise.

5. It should also provide for what the concession may be awarded for-
# development of new infrastructure
# or maintenance, expansion and modernisation of existing infrastructure
# only for the delivery of public services.
3.2 Non Compete element in Concession Agreements

The non compete clause as proposed by the Central Government is provided to

safeguard the concessionaires. Anon-compete clause requires the public partner not to
construct competing facilities. Moreover the compensation-based proviso requires the
private partner to merely exhibit actual harm as a result of such competing
construction. Such a provision would lead to restricting the government to construct
additional infrastructure as a part of their welfare responsibility. This could also
possibly invoke section 3 of the Competition Act, 2002 which expressly prohibits any
agreement that would restrict the provision of services. The growth rate of
infrastructure would decelerate if the government would have to stop a planned
project to facilitate a PPP project. Therefore it is advisable for the government to
introduce non-compete clauses on case-by-case merit after critically analysis the long
term implications of such arrangement on demand and supply for infrastructural
conveniences.

4. Implications of the Right to Information Act in Public Private

Partnership
Public private partnership model has been implemented all over the globe
successfully. The reason being the involvement of the private sector provides
competitive effectiveness and the participation of the government guarantees
credibility, stability, transparency and accountability. But, do the PPP projects fall
under the RTI Act, 2005 is a debatable question.

From the perspective on an entrepreneur it would not be reasonable to put PPP

projects under the scrutiny of RTI Act, 2005. It would act to the detriment of the
purpose of such an arrangement of providing world-class facilities to the citizens of
and to be gazed upon and halted at every step. But it is often argued that acting in any
possible capacity the government, must be subjected the same checks and balances.
Mr Gajendra Haldea, advisor of the Planning Commission suggested the inclusion of
PPP under RTI. He contended that such an arrangement could be made possible by
inserting an express clause in the concession agreement whereby both the parties
would consent to the applicability of RTI Act, 2005. According to the said act it
requires only public authorities to provide information. The PPP is neither formed by
the Constitution or any statute. The test, which applies to PPP, is that of the non-
governmental organizations which fall under the broad definition of all bodies
owned or substantially financed. The only authoritative judicial pronouncement on
this question of law has been delivered by the Andhra Pradesh High Court in
Bangalore International Airport Limited (BIAL) case- PPP formed by the partnership
of KSSIDC, AAI and a consortium of private airport operators, is amenable to the
RTI Act. The justification provided by the High Court for its finding is this- were the
concessions provided to the concessionaire by the state government (including cost of
land acquired, uninterrupted supply of power and water etc.) translated into cash
flows, the figure arrived at would be a substantial amount. Bringing PPP under RTI
subject to no conditions would be harmful to the efficiency factor that the private
player brings in. Perhaps, keeping information as to the public assets and utilization
inclusive and excluding the commercial and other financial aspects would best serve
the purpose?

5. Relation between Public Procurement and Public Private

Partnerships

PPP means an arrangement between a government or statutory entity or government

owned entity on one side and a private sector entity on the other, for the provision of
public assets and/or related services for public benefit, through investments being
made by and/or management undertaken by the private sector entity for a specified
time period, where there is a substantial risk sharing with the private sector and the
private sector receives performance linked payments that conform (or are
benchmarked) to specified, pre-determined and measurable performance standards.

A key motivation for governments considering public private partnerships is the

possibility of bringing in new sources of financing for funding public infrastructure
and seeking operational efficiencies in the provision of public service needs.

One of the areas where public-private partnerships are often utilized is public
procurement. The very essence of public procurement is economic and ethical
relationships between the public and private sectors.
Public sector officials purchase goods, services and works necessary for society, from
private suppliers and use public funds to pay for it. Public officials, or contracting
authorities are obliged to make sure they purchase only those things that are really
needed with regard to their function and quality, and purchase it in the most
economical way possible.

A private enterprise as supplier of these goods, services or works needed in society, is

interested in the public contract to improve its position in the market and also, to
deliver the goods under the contract with the highest profit possible in the market.

A major role in this society-wide effort is played by public-private partnerships that

are manifested through public declarations of anti-corruption agreements,
enforcement of ethics codes or application of integrity pacts in major public
procurement cases.

6. Economic theory
In economic theory, publicprivate partnerships have been studied through the lens of
contract theory. The first theoretical study on PPPs has been conducted by Oliver
Hart 1 . From an economic theory perspective, what distinguishes a PPP from
traditional public procurement of infrastructure services is the fact that the building
and operating stages are bundled in the case of PPPs. Hence; the private firm has
strong incentives in the building stage to make investments with regard to the
operating stage. These investments can be desirable but may also be undesirable (e.g.,
when the investments not only reduce operating costs, but also reduce service
quality). Hence, there is a trade-off and it depends on the particular situation whether
a PPP or traditional procurement is to be preferred. Hart's model has been extended in
several directions. For instance, authors have studied various externalities between the
2 3
building and operating stages, insurance when firms are risk- averse, and

1 Hart, Oliver (2003). "Incomplete Contracts and Public Ownership: Remarks, and an Application to
PublicPrivate Partnerships*"

2 Bennett, John; Iossa, Elisabetta (2006). "Building and managing facilities for public services"

3
Iossa, Elisabetta; Martimort, David (2012). "Risk allocation and the costs and benefits of public
private partnerships"
implications of PPPs for incentives to innovate and gather information.4

6.1 Challenges and barriers

Publicprivate partnerships have seen a large increase over the years in part because
local and state governments rely heavily on the growing number of non-profits to
provide many public services that they cannot. 5 Entering into a publicprivate
partnership can be rewarding as well as destructive if not done with caution and
education. Partnerships need balance from both parties as well as continuous
maintenance. If entered into lightly, one can find its organization falling in various
areas proving to be one of many partnership failures.6

1. Flexibility between the two partners as the contract and staff involved throughout
the process: If one party feels they are losing some of the control they may
work on adopting more rules and regulations throughout the process instead of
working together to be flexible and mediate an issue.

2. Timeline: Non-profits are working on a long-term timeline. Many of their goals

can only be achieved with long-term commitment; this is where their focus
will lie. For-profit organizations are more short- term oriented because of
short-term goals focusing primarily on profitability. Finally, government
agencies' timeline depends a lot on election timelines and therefore can change

4
Hoppe, Eva I.; Schmitz, Patrick W. (2013). "Publicprivate partnerships versus traditional
procurement: Innovation incentives and information gathering"

5
Smith, S. (2008). "The Challenge of Strengthening Nonprofits and Civil Society". Public
Administration Review

6
Babiak, K. & Thibault, L. (2009). "Challenges in Multiple Cross-Sector Partnerships". Nonprofit and
Voluntary Sector Quarterly
 regularly.7

3. Focus of the project: Partners may not have the same focus when entering into a
partnership even though they think they might.

4. Funding priorities: When parties cannot agree on where funding should go this
can sometimes lead to losses in time, resources, and the overall funding for the
project. Funding priorities for government bodies looks typically at where the
public's funds were spent in relation to the contract made. This then typically
is looked at as in how many hours of participations, forms filled out, meals
served, etc. Neighborhood organizations or small and local non-profits saw a
broad source of funding during the early years but there has been a shift in
funding more recently reducing the overall funding and seeing more of it go to
larger agencies focusing on large grants.

5. Accountability: With the rise in publicprivate partnerships there is also a rise in

the responsibility that the non-profits tend to hold. With the government
relying on many more of these organizations to provide the public services
they cannot it is also proving difficult for the government to hold these non-
profits responsible. When responsibilities are not set to the letter this can cause
some in managerial positions to take the back seat, seeing their counterparts
taking the initiative to get tasks done. This leaves an unbalance of work and
sometimes those with the most skills are not doing the job. This can also be
brought on by under management causing more problems such as a lack of
focus for the projects, mismanaged funding, and miscommunication. Too
many projects and partnerships can also lead to a lack of accountability. When
there are too many tasks they seem to all fall short of the hoped perfection.
Some partners may be taking over roles of others because accountability has
not been well defined. This can also lead to some taking advantage of others
when they note the any weakness. This can cause a distrustful partnership.

7
Ferris, J.; Williams, N. (2013). "Offices of Strategic Partnerships: Helping Philanthropy and
Government Work Better Together". Foundation Review.
6. Communication or understanding: One of the largest issues that can be
discussed, communication can be a huge downfall and can contribute to many
of the other risks within partnerships. It can be said that when entering into a
cross-sector partnership it is difficult to understand and collaborate due to the
diversity and differing languages spoken amongst the sectors. Items like
performance measures, goal measurements, government regulations, and the
nature of funding can all be interpreted differently thus causing blurred lines
of communication.

7. Autonomy within the partnership: While working together is important it is still a

strength to be able to work on parts of the project alone, take initiative when
needed, and keep some individualism throughout the process. This is
beginning to happen more with the privatization of publicprivate partnerships
where the private organization may own the partnership itself and the
government then keeps full responsibility for it. This keeps parts of the
partnership separate for focus.

8. Conflicts: These can arise from any of the above topics but even outside issues or
forces may bring a partnership to a halt. Even though these partnerships are
entered into with the best of intentions even the most trivial issues can
snowball into greater conflict halting a partnership dead in its tracks. Having
no understanding and communication between parties can cause conflicts with
use of language, stereotyping, negative assumptions, and prejudice about the
other organization. These conflicts can be related to territorialism or
protectionism, and a lack of commitment to working within the partnership.

9. Possible solutions: Partnerships might not be natural for business and managers do
not want to depend on others but it is possible with careful solutions.

1. Creating an ongoing narrative about partnerships and how will these be

developed, maintained, terminated. This is especially prevalent to the local and state
governments who rely heavily on the non-profits for the public services. A business
partnership model would not be accurate or appropriate for a P3. Many partnerships
can be terminated early due to issues with trust and cooperation during the contract
implementation process. These issues can be avoided when the organization has
initial guidelines for dos and don'ts.

2. Creating a formal control mechanism for the partnership.

Ensure that there is a continuous commitment with negotiations in any time of

trouble and even an outline for termination procedures if necessary.
Conflict resolution, outreach and organizational development are items that
managers can work on and even assign specialists to each task. Creating a
timeline to be followed throughout the partnership assists in mutual
understanding and communication as well. Assigning specialists to work with
skills in communication, conflict resolution, negotiation and policy analysis
cross-sector partnerships have also been able to flourish.

7.Conclusion

In the modern era, it has become necessary for the nations to adopt the Public Private
Partnership model to sustain economic growth along with fulfilling social
responsibilities. Infrastructure facilities are no longer a luxury for the common man-
fly-overs, world class metro trains are just the beginning. Although this system is in
practice from Roman times its 21st century implications, institutions and allied
mechanisms are in a nascent stage. From the legal perspective a lot is yet to be done
in the area of concession laws, competition aspects and the recent dimension of Right
to Information. Law is an experienced entity and therefore this concept shall advance
in the future to the benefit of one and all.
 Bibliography

Broadbent, J. and R. Laughlin (2003), Public Private Partnerships: An Introduction,

Accounting, Auditing & Accountability Journal, 16(3), 332511.

Daniels, R. J. and M. J. Trebilcock (1996), Private Provision of Public Infrastructure:

An Organizational Analysis of the Next Privatization Frontier, University of Toronto
Law Journal, 46, 375425.

Scharle, P. (2002), Public private partnerships as a social game, Innovation, Vol. 15

No. 3, pp. 227-52.