ISLAMABAD, Sept 14: Privatization and Investment Minister Dr Abdul Hafeez Shaikh has said the government will soon launch a new initiative to promote public-private partnership for generating investment in infrastructure in the country.

The minister stated this while presiding over a meeting to review the Public Private Infrastructure Financing Facility proposed under the aegis of the Asian Development Bank here on Tuesday.

The minister said the public sector had been the main provider of basic infrastructure in Pakistan. "However, paucity of resources limits the government's capacity to meet growing infrastructure needs of the country, while the existing infrastructure is largely inadequate to satisfy the needs of economic development as well as the demand arising from population growth," he stated.

Dr Hafeez said that in order to augment limited public resources for infrastructure, the government would facilitate the private sector participation by creating an enabling environment for its participation, thereby increasing the provision of infrastructure to promote economic growth and reduce poverty. He directed the BoI secretary to develop tools -- BOT rules - of the game for the public-private sector to proceed further in this regard.

The meeting discussed modalities at the federal and provincial governments' level for establishing enabling environment and providing long-term financial debts. The minister highlighted electricity, gas, toll roads, irrigation, water sewerage systems, provincial highways and other areas for such facility.

Umar Ahmed Ghumman, Minister of State for Privatization and Investment, gave his views regarding the regulatory bodies and stressed upon the effective role to be played by the SME sector.

Daniyal Aziz, Chairman of the NRB, appreciated the efforts for building bridge between the public and the private sector and detailed the possible execution of the project through local government setup.

The ADB has indicated its willingness to provide a financing up to $500 million and also guarantees to mitigate risks in infrastructure projects. The ADB had earlier provided technical assistance for the assessment of options and design of appropriate mechanisms for facilitating the private sector participation in infrastructure projects in Pakistan.

This included design of project development facilities and capacity building at the provincial and local levels to facilitate the private sector participation in infrastructure projects.

The execution agency for the technical assistance is the Privatization Commission. The ADB has offered the financing facility for promoting private sector investment in infrastructure for the financial year 2005. The offer of the ADB is currently under review by the government. A decision on the modalities of its implementation is expected shortly.