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Huge investment under PPP required despite Rs635b ADP in Punjab


1/7/2018

LAHORE - In spite of record allocation of Rs 635 billion for the Annual Development Program (ADP) in 2017-18, huge investments are still required to meet the development demands in economic and social infrastructure, as almost 60 percent of the country’s population in Punjab puts heavy pressure on its development resources.

This was observed by Member (PPP), Planning & Development Board Agha Waqar Javed while talking to The Nation. Agha Waqar, who also heads the Public Private Partnership Cell, government of the Punjab, observed that Public Private Partnership (PPP) regime will be the catalyst in the economic growth of the province.
 
Under the Public Private Partnership as many as 27 projects worth Rs58 billion have been awarded during the last three years out of which four projects of Rs29 billion have been completed including Ring Road southern loop, Kahna flyover, vehicle inspection certification system and Pakpantan hospital management outsource.
 
Agha Waqar said that presently more than 35 projects of around Rs245 billion are in pipeline in 12 different sectors in Punjab under the PPP regime.  The head of PPP Cell stated that overall scope is enormous and Punjab not only requires financial investments but also the efficiencies associated with private enterprise.
 
To a question as to what is the vision for PPPs in Punjab, he said that our vision is sustainable economic development of Punjab by harvesting full potential of society with private sector taking the lead. The government is short of finances, to plug that gap PPPs play an important role through private sector investment .
 
“The Punjab Public Private Partnership initiative has achieved major milestones in recent years. A number of projects worth Rs58 billion have already been awarded many of which are already operational while others are under various stages of completion. We have also developed an attractive pipeline of projects worth about Rs 245 billion across 12 sectors.”
 
He said that Lahore Ring Road (Southern Loop) is one of our flagship projects which has attracted an investment of about Rs 20 billion. Kahna Flyover is another key project under PPP mode. Vehicle Inspection Certification System (VICS) in Punjab has been awarded to a Swedish company Opus International. Under this project, commercial vehicles are tested for fitness and certification.
 
“In the grain storage, we have already approved 19 projects to various private parties which will construct model Grain Silosto store food grain in Punjab on under the Build Own Operate (BOO) model.”
 
“Another interesting project is Afforestation in South Punjab on over 65,000 acres of land with the help of private sector. Dualisation of Shiekhupura-Gujranwala road has been awarded to Habib Construction. This project will not only be built with private investment but will also share revenue with the government. Other important pipeline projects include Waste Water and Surface Water Treatment Plants in Lahore and Faisalabad, Weaving City at FIDEMC, CETPs at Sundar and Quaid-e-Azam Industrial Estates Rawalpindi Ring Road, etc.”
 
To a question as to how these projects are initiated and what process the government follows, he said that each development initiative proposed by any government department is aligned with the overall sectoral development plan which in turn is aligned with the Punjab Growth Strategy. For the implementation of sectoral development priorities departments explore various options of financing, he added. The PPPs present a real financing option in this regard. Furthermore, Planning and Development department filters the requests made by the public departments on Annual Development Program by looking at the potential for revenue generation in these projects for implementation under PPP. Wherever a project could be self-sustainable and has the revenue generating potential, it is diverted out of the Annual Development Program towards the PPPs.
 
Replying to a question, he said that the initial model of Public Private Partnerships was developed under the ‘Private Finance Initiative’ in United Kingdom by the Government of John Major. Australia was also among those countries which pioneered this mode of development which later became an important tool with governments to improve and enhance their development agenda. In Pakistan, the initial forms of PPPs were developed in the power and telecom sectors in the 1990s however no exclusive legal PPP framework existed then. In Punjab, PPP policy came out in 2009 which laid the foundation of PPP framework in the province. The policy emphasized the importance of tapping private sector investment and managerial abilities to develop infrastructure and enhance efficiency of public service delivery. In 2010, Public Private Partnership for Infrastructure Act was approved which provided a complete institutional framework. This was subsequently amended as PPP Act 2014 which is presently operative.
 
Source: The Nation
 
https://nation.com.pk/07-Jan-2018/huge-investment-under-ppp-required-despite-rs635b-adp-in-punjab