Government of Pakistan recognizes the importance of improving and expanding its infrastructure services for sustaining economic and social development. Improved quality and service coverage in power and water supply, sewerage treatment, transport and logistics are vital for Pakistan’s economy and the livelihood of its people.
The construction industry in Pakistan consumes 80% of National Development Budget. Fiscal constraints require innovative approaches - away from the traditional mode of financing by the Government. Accordingly, the GoP has assigned top priority to developing low income housing under Private-Public partnership/Joint Venture. Public Private Partnership (PPP) are considered to be the way forward for development and delivery of infrastructure leveraging private sector financing and expertise. The construction industry had a total value of approx. USD 3.78 billion in 2012 and this value is expected to rise to around USD 10.4 billion by 2020.
To effectively govern, facilitate the development and efficiently administer the PPP projects in Pakistan, PPP policy has been developed at the Federal level. Federal PPP policy has been approved by the Economic Coordination Committee of the Cabinet. The policy covers, but is not limited to, the following infrastructure sectors:
- Transport and logistics
- Mass Urban Public Transport
- Local Government Services
- Energy Projects
- Tourism Projects
- Industrial Projects
- Irrigation Projects
- Social infrastructure
Investment Growth Potential
- It is estimated that Pakistan looses approximately 4% to 6% of its GDP due to infrastructural constraints.
- With the population of the country rising at a rate of four million per annum, there is a need of 650,000 housing units annually. However, only 350,000 units per year are being added, leaving a shortfall of 300,000 per annum, which represents a significant investment opportunity.
- Rising level of urbanization inclined to increase from 34.9% in 2005 to 50% by 2035, as estimated by United Nations, provides ample development opportunity in the sector.
- Securities & Exchange Commission of Pakistan has introduced two types of Real Investment Trust Schemes, namely rental and developmental providing opportunity to general public to pool funds for investment in real-estate sector.