The Advisor to Infrastructure Project Development Facility (IPDF), Ghulam Murtaza Satti said on Sunday the IPDF would soon complete 12 projects worth Rs208 billion on the Public Private Partnership (PPP) mode besides planning to attract private or foreign investment in the Chashma IV nuclear power project.
In an exclusive talk with the APP, Satti said the IPDF's under completion projects included Shipyard at Port Qasim, Shipyard at Gwader Port, PTDC Corporate Complex, PTDC Tourist Village, Faisalabad Wasa Watering System, National Trade Corridor Cool Chain Project, Faisalabad Solid Waste Management, Charsada Solid Waste Management, IT Park in Islamabad, Karachi CNG Buses, Automation of FBR Project and the Karachi Circular Railways.
'Most of these projects are at advanced stage and a soft loan of $850 million has been received from Japan at around 0.5 percent. Moreover, a Karachi Urban Transport Corporation (KUTC) has been formed having 60 percent share from the federal government, while the Sindh government has 25 percent shares and the city government Karachi has 15 percent stakes in the KUTC,' he added.
'The key IPDF projects in the pipeline are 32 small and medium dams for water generation and some are for power production.' Besides, the IPDF is under discussion with the Pakistan Atomic Energy Commission for the Rs64 billion financing of Chashma IV nuclear power project. The Chinese investor would be the operator of the power plant and sell electricity to the national grid, he added.
The Karachi Circular Railways (KCR) would be operated by a private firm, he said adding, 'We do not want the new KCR to meet the same fate, as that of its previous set up.'
Satti claimed that the IPDF has devised a tool to develop transparency in its functioning for trust building of the foreign and local investors. 'However, collective efforts are needed in close co-ordination with all the concerned departments to facilitate the investors in Pakistan.'
The IPDF advisor however, criticised the bureaucratic hurdles in the foreign investment, saying the government departments were creating hurdles for the involvement of private sector in development projects.
'Up to 40 percent of the project funds are utilised in kickbacks and this might be one of the reasons that the departments are not willing to develop projects on the basis of Public Private Partnership (PPP),' he said, adding that the bureaucratic mentality is to keep hold of everything even if they fail at the end of the day. The country cannot afford to finance mega-projects and involving the private sector for the development sector is necessary, he opined.
Further, Satti said that Pakistan can invite genuine investors despite the terror threats by offering them higher returns and such assurances have already been made by many Pakistani and foreign investors based abroad.
Adil Anwar, Chief Executive Officer, IPDF, told APP that under the PPP mode, the investors would finance establishing a project and the government would permit the investor to collect toll and generate money through the commercialisation of property for up to 25-30 years.
Other projects in the pipeline include sections of highways, roads, bridges, medical colleges and technical educational institutes. Satti further said that President, Asif Ali Zardari had introduced the Public-Private Partnership (PPP) Concept in the country. Pakistan is ranked 67th in basic infrastructure category, out of 125 countries, as per World Economic Forum Survey (2006-07) and it needs heavy investment in physical infrastructure approximately to the tune of $110 billion over the next 5 years. ($22 billion a year) to improve the delivery of services and to enhance its internal and global competitiveness.
Last year's PSDP on Infrastructure was approximately $5 billion, falling far short of the required capital and thus making private sector investment critical for development of new and management of existing infrastructure.
The government support is essential in the development and the eventual success of their PPP programme. Considering the many advantages of PPPs, the governments consider them as an attractive off-budget mechanism for not only delivering infrastructure services but, also facilitating private sector participation and have therefore promoted PPPs as a part of their overall strategy.