Government hires Deloitte to devise PPP framework
KATHMANDU, MAY 05 -
The government has hired Deloitte India to conduct a study for devising a framework on public private partnership.
It has been more than a decade since the concept was introduced, but so big projects have so far been implemented under the concept.
“The multinational consulting firm will recommend the appropriate framework for PPP in Nepal after studying existing practices,” said Baikuntha Aryal, joint secretary at the Finance Ministry.
“As the experience so far in executing PPP has not been encouraging, a study was necessary to identify the problems in implementing the PPP concept in the country.”
The study is being undertaken under the Capital Market and Infrastructure Cooperation Support Project funded by the Asian Development Bank and executed by the Ministry of Finance.
According to Aryal, Deloitte India has been assigned three tasks — recommending on how to develop effective bond market, on creating an enabling environment for public private partnership and suggesting five potential projects that can be executed under the PPP model, out of which one will be executed.
“The consulting firm recently started its work,” said Aryal, adding it has formed three teams to study the three areas. Deloitte has been asked to submit its report by 2014. A study team member Purna Kadariya said the component of bond market creation was included in the study as the necessary resources for infrastructure financing could be generated from this market.
Kadariya, who will study on creating an enabling environment for PPP, said they will study the existing policies, laws and organisation structures and make necessary recommendations.
Realising that government ’s own investment and involvement in the infrastructure sector will not be sufficient, the government has accepted PPP as an alternative source of procuring assets and services, including the private sector’s financial participation for meeting the increasing demand for infrastructure and services in the country.
However, the National Planning Commission, in its white paper on PPP, has said the decade-long experience in PPP shows limited success.
The Kathmandu Metropolitan City (KMC) pioneered private sector involvement in the municipal sector with the Private Sector Participation (PSP) programme in 1999-2000 for institutional strengthening of KMC.
Several projects were identified for implementation such as the Gongabu bus park, construction of foot-bridges, operation and management of Dharahara and its surroundings. The Ministry of Physical Infrastructure and Transport is undertaking four big projects — Kathmandu-Nijgadh Fast Track, Kathmandu-Hetuada Tunnel Road, Pokhara Cable Car and Phulchowki Cable Car.
Secretary at the ministry Tulasi Sitaula admitted these projects were facing delays due to problems such as issue of compensation for acquired land and legal issues.
Source: The Kathmandu Post
