It is good news for the people that the private sector and the government have not only realised the limiting effects of a broken, insufficient physical and social infrastructure but also seem keen to pool resources to mend and extend it collectively.

Experts, however, caution against haste, overcompensating private partners, absence of a clear fiscal and social risk management mechanism, corresponding legal framework, confusion over auditing arrangements, lack of technical capacity and the slow reform process in line ministries and departments.

By crowding in the private sector to better leverage capital and technical resources — in order to achieve cost and time efficiencies in delivery of public sector goods and services — infrastructure deficient developing countries are gravitating towards a public private partnership model.

Pakistan’s corporate sector that has long been a sceptic of the government now appears inclined to partner with it for social and infrastructure related projects under a public private partnership arrangement.

“The performance record of the government over the past few years, in delivering on its promises to its business partners and providing generous terms in the deal — where it is willing to extend full risk cover with ensured returns — is nudging Pakistani business groups and social enterprises towards partnership arrangements”, commented an expert.

There is a healthy competition between provinces, each ruled by a different political combination, on using the partnership arrangement to close governance gaps in the quantity and the quality of social and infrastructural service delivery in their respective province.

Stakeholders believe the change in the governments conduct is rooted in the acceptance of the reality: the government lacks the resources and capacity to provide essential basic services such as transport and logistics, roads and bridges, electricity and gas or even health and education, on its own.

There is healthy competition between provinces on using the partnership arrangement to close governance gaps in the quantity and quality of social and infrastructural service delivery

In an attempt to make up for the trust deficit in business circles and leverage managerial and technological expertise, the government realised early on, that the terms of engagement had to be attractive for its intended partners. It recognised the value of delivering on its pledge in initial projects to set the course for the future.

Shamsuddin Ahmed Shaikh, CEO, Sindh Engro Coal Mining Company, the biggest public private partnership (PPP) venture (about $2bn), was pleasantly surprised and satisfied with the Government of Sindh. He told Dawn that the GOS not just delivered on supporting development work necessary in the difficult location of the project but was professional and transparent in its dealing.

“The GOS has been a key enabler. The success of the partnership can be gauged from the fact that the project cost is expected to be $735m against the approved funding plan of $845m and with actual progress to date at 28.4pc against 26.3pc planned.

“God willing, it will be completed in 38 months against the projected 42 months”, Sheikh said highlighting the transformational nature and strategic importance of the project in neglected Thar that enjoys local support that transcends the political divide.

The input of private partners lends credence to claims of Ms Naheed Memon, Chairperson, Sindh Board of Investment, that Sindh leads other provinces in managing public private partnerships. Recently at a public forum she was contesting the negative perception about the quality of governance in Sindh.

Ali Sibtain, DG, Public Private Partnership Unit, Sindh, said over phone that the public private partnership eco system is still evolving in Pakistan. He vouched that the provincial set up is keen and committed in this regard.

“There is not an iota of doubt in my mind that hiring for this unit was done on merit and there is no interference in professional work of the unit from any quarter”, he stressed.

According to the Sindh government (online information) six projects have so far been executed under the PPP model including the Hyderabad-Mirpurkhas dual carriageway, Safety and security at NICH, Jhirk Mulla-Katiyar bridge, Karachi-Thatta dual carriageway, 5 contracts to manage health facilities and education management organisation. Five projects in transport and health have been identified as current and ten more are said to be in the pipeline.

Agha Waqar Javed, secretary, steering committee of the public private partnership cell in Punjab vociferously challenged the claim that Sindh is ahead of Punjab in terms of the number or value of partnership projects.

“I don’t agree with a notion which is not based on facts. In Punjab two PPP projects are already functional, two dozen are close to a financial close and 50 more are in the pipeline. We go about business in a strictly professional manner.

“The process of due diligence, risk assessment and concession agreement is long and involves transaction advisors, risk managers and legal advisors. It takes four to six months from the point of inception”, he said over phone.

Mr Javed said it would be unfair to count the SECMC as a PPP project as it was conceived and executed before promulgation of the Public Private Partnership Act in Sindh.

He talked down on the composition of the PPP unit in Sindh. “There the PPP unit is headed by the chief minister while in Punjab an independent steering committee with several independent members, drawn from the private sector and academia, oversee the operation”, he made a point.

Some progress on public private partnership projects have been reported in KP and Balochistan but online information is scarce and relevant officials were not readily available for comments.

Published in Dawn, Economic & Business, April 10th, 2017