Draft PPP Policy provisions three funds


Feb 7, 2015-

The government has prepared a draft Public-Private Partnership (PPP) Policy which provisions the formation of three types of funds to implement PPP projects.

They are project preparation fund, viability gap funding and revolving type of land acquisition fund.

This is the first time the government has introduced the concept of the viability gap funding, assuring the private sector of compensating if a project fails to recover costs.

Although there is no policy as such on viability gap funding currently, the government has assured compensation to the developer of the Kathmandu-Terai Fast Track Project.

“Given land acquisition emerging as one of the biggest problems for infrastructure projects, the revolving fund was introduced,” said Puspa Lal Shakya, join secretary at National Planning Commission.

Besides the three funds, the government will allocate budget for administrative cost, capacity development, preparation of guidelines, and hiring of experts for the proposed “PPP Centre” to be stationed at NPC. The private sector will have to bear all the PPP project management cost, according to the draft policy, currently under government-level discussions.

The draft has proposed six areas for PPP—physical infrastructure and transport, electricity, information and communication, urban and

rural environment management, waste management, infrastructure related to education and health, tourism (except hotel and housing) and urban infrastructure (deliver services).

For local-level PPP projects, there won’t be certain priority areas, according to the draft.

The draft has stated if new technology and methods should be used, such projects should be given special priority. It has proposed the government should go for international bidding for projects worth more than Rs 1 billion.

The draft policy has proposed three types of institutional set ups—PPP Approval Committee, PPP Centre and Project Implementation Unit (PIU) at the PPP implementing agency.

The PPP Centre will identity priority areas for PPP and select projects based on priority and invite interested private sector firms for project design. The executing agency will fix the PIU for every project.

The executing agency will have to provide details about PPP projects to NPC, and after NPC’s approval, the PIU should make necessary preparation for the project development.

If the private sector wants to be involved in project preparation, the PPP Centre will have to facilitate the private sector for the purpose, according to the draft.


Published: 08-02-2015 09:22

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