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Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,280
1124hr
Pakistan Cases
1,265,047
66324hr
1.66% positivity
Sindh
465,819
Punjab
437,974
Balochistan
33,128
Islamabad
106,469
KPK
176,886

TEXT: Public Private Partnership (PPP) mode of project development appears as the apt mode of infrastructure finance in the given circumstances of Pakistan, that may attract wide range of private investments from within and abroad across the board. This in turn will pave the way towards sustainable and futuristic development in the country amidst existing financial and operational constraints. The government has accordingly carried out a holistic review of the PPP ecosystem in Punjab and has implemented a new PPP framework through PPP Act, 2019.

Under this new legal dispensation, the Punjab PPP Authority has been established as one window solution for the smooth provision of public infrastructure and services. In contrast with the erstwhile regime, the Punjab PPP Authority carries the mandate for the identification as well as execution of PPP projects, facilitating debt markets and international financial institutions to encourage private sector participation in development activities. By doing so, numerous opportunities have been created in Punjab across various sectors including but not limited to roads, industries, urban development, health, water supply & sanitation and local government. The Government hopes that the establishment of Punjab PPP Authority with the recent reallocation of responsibilities and risks will substantially transform the development discourse in Punjab, exploring the new avenues for partnership between government and private sector counterparts. This is anticipated that the current pace of development in Punjab with respect to PPP policy framework will add new dimensions towards transforming the Punjab into an economically vibrant and socially sustainable Province.

In particular context of the provision of modes of engagement for the development of PPP projects, the PPP Act, 2019 offers two broad avenues i.e. 'Solicited' and 'Unsolicited', which creates wide margin for public and private sector stakeholders to propose conventional as well as innovative PPP project. Both the modes of engagement with respect to proposition of PPP projects are briefly explained below:

SOLICITED PROJECT PROPOSAL

The solicited project proposal is identified/conceptualized by Punjab PPP Authority/ concerning Government Agency by itself or through the hiring of Transaction Advisory Services (TAS). As per PPP Act, 2019, a solicited PPP project proposal shall broadly consist of an analysis of feasibility and sustainability of the project including detailed business case and financial model, risk analysis, environmental impact assessment, need for Government support, determination of PPP modality and bid documents including a draft PPP agreement. The project proposal should clearly describe technical features, design parameters, PPP suitability in relation to the public sector's general policies, main economic impact factors and socioeconomic benefits of the project. In addition, description of potential interest from private investors/promoters and potential appetite of the private sector (in case of solicited project) should also be done in preparing information memorandum. A window of Project Development Facility (PDF) funding can be utilized by Punjab PPP Authority/ Government Agency to hire TAS for the development of PPP project proposal.

UNSOLICITED PROJECT PROPOSAL

In comparison with the previously mentioned solicited mode of engagement, the unsolicited proposal should come from the private sector counterpart. The Unsolicited proposal can be submitted with either concerning government agency or Punjab PPP Authority. The proposal should accompany a written confirmation that it is economically and commercially viable and fulfills all the necessary requirements of the Unsolicited proposal. All such proposals are being processed on case-by-case basis ad should demonstrate a certain level of genuineness, substantive innovation and must be in line with the government policy and sectorial priorities. The unsolicited project proposal will be developed with same requisites as in the case of solicited project proposal with the exception that the bidding documents will be prepared by Punjab PPP Authority or the concerning Government Agency.

The unsolicited project proposal shall be considered from all aspects including but not limited to technical, environmental and financial sides. However, in the case of requirement of any additional information, the Punjab PPP Authority/Government Agency may request for submission of an amended or modified proposal from the private party. In contrast with the solicited mode in which project feasibility study is financed by government's PDF (Project Development Funding), the unsolicited proposal can be developed by the prospective private partner from its own resources. Once the Unsolicited proposal is approved by PPP Planning and Monitoring Board, the bidding process will be initiated by Punjab PPP Authority/ Government Agency and private party/person will have advantages like already prequalified (In case of prequalification), 5% additional weightage in technical scoring, first right to match or improve the best bid received and reimbursement of the cost of project development in case the bid fails to match. With these prime advantages and incentives, the Punjab PPP Authority is all set to receive a corresponding proactive response from the private sector to get engaged in terms of innovative projects which ensure the provision of quality infrastructure and service delivery through creating a win-win situation.

Government envisions that with the establishment of Punjab PPP Authority, a good level of projects in infrastructure and social sector will be structured and executed in PPP mode, hence providing appropriate cushion for leveraging public funds. With the current track of policy and institutional arrangements in place, Punjab PPP Authority is expected to open new avenues of development in variety of sectors and will create viable PPPs aligned with national priorities. The structuring of PPP project depends upon variety of factors, which includes fair and the most realistic assumptions, commercial viability, right deployment of concessions and incentives along with specific risk matrix which hand balance in terms of financial and operational exposure.

In the present situation Punjab PPP Authority is saddled with the tasks of not only conceptualizing the most viable and provides necessary help and consultation to all stakeholders but is also well equipped to execute the PPP projects with utmost transparency and fair-play.

AMJAD ALI AWAN

CEO,

Punjab PPP Authority

Copyright Business Recorder, 2021

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