National Planning Commission organized a workshop on Public Private Partnership (PPP) primarily to disseminate PPP Policy – 2072 among the different stakeholders of the society. It aimed at identifying strengths and gaps in the policy as well as areas of improvement. The workshop was held on March 17, 2017 at Hotel Annapurna, Kathmandu and the participants came from government, priviate sector, academia, professional organizations and media houses.
Delivering inaugural speech Dr. Min Bahadur Shrestha, Honorable Vice-Chairman of NPC highlighted the importance of PPP for economic growth and development in Nepal through joint participation of public and private sectors. A growth rate of 7 percent projected for the ongoing 14th Plan could only be achieved if the private sector meets the target of 55 percent of total national investment in the Plan period (FY 2016/17 – 2018/19).
Referring the example of Myanmar and Mongolia, where the foreign direct investment (FDI) ratio to GDP is in two digits, the Vice Chairman stressed that this ratio for Nepal should be increased from a mere share of 0.2 percent to at least 5 percent of GDP within a short-term period. As the role of private sector is immense in attracting FDI, he said that the PPP policy will be able to create enabling environment in the country and to enhance both financial as well as economic rate of return of investment. In all these fronts NPC is working for strengthening policy matters along with legal and institutional arrangements.
Chairing the one day workshop, Dr, Sunil Babu Shrestha Honorable Member of NPC highlighted the need of disseminating the PPP policy to the provincial level for generating capital, and enhancing innovative skills and managerial capacity of the private sector at the different spatial levels. He stressed that the NPC is giving focus on the basic five pillars of PPP such as capacity building, enabling environment, project preparatory facility, project financing, and implementation.
Welcoming the participants of the workshop, Mr. Sanjaya Khanal, Joint Secretary, NPC Secretariat highlighted the needs of PPP approach in Nepal and the efforts made by the NPC. Mr. Laxman Aryal, Joint Secretary, Ministry of Finance reiterated the need of incorporating cooperative sector in the PPP model of development along with public and private sectors so that the three-pillar system will lead development even in the remote and rural areas of the country.
Presenting paper on “a Critical Analysis of PPP policy – 2072” Dr. Binod Atreya acknowledged the comprehensiveness of the policy and suggested to revise few concerns for its effective implementation. These are mostly related to the processes of project cycle such as need of prefeasibility, need of fund and financing mechanism, project appraisal, and the role of private sector in decision making process.
Commenting on the PPP policy, Dr. Madhukar Sumsher Rana, former Finance Minister said that in the federal system the provincial as well as local governments will also be able to adopt and initiate PPP approach to expedite development at local levels. Mr. Purna Kadariya, former Secretary of the GON clarified that the role of Investment Board of Nepal is mainly to attract foreign investment even without involving government fund for investment. IBN requires enabling environment where as PPP requires government and private sector partnership for investment, cost sharing, and management.
In his closing remarks, Dr S. B. Shrestha emphasized that the establishment of PPP Center under NPC would expedite the implementation and help build enabling environment for investment. NPC will incorporate the suggestions of the workshop in finalizing the draft of PPP Act.
(Note: The workshop was first in a series of four workshops. Other workshops will be organized in Biratnagar, Surkhet, and Gorkha).