Though government officials and private sector representatives have been advocating PPP for the development of infrastructures, the model hasn´t been much successful in this regard.[break]
Issuing a public notice recently, the Department of Roads (DoR) had called for Non-government Organizations (NGOs), private companies, experts, consultants and construction entrepreneurs to come up with the proposals for viable projects to be run under the PPP model. DoR has recently set-up a PPP cell as a nodal office to coordinate selection of project proposals submitted by various sectors.
“We have specifically demanded proposals to build transport infrastructures such as roads, bridges and tunnel which require huge investments,” said Ananta Acharya, chief of the PPP cell at DoR.
He, however, said achieving much success in developing transport infrastructure under the PPP model is difficult in Nepal where return of investment is low as the transport sector is not vibrant due to low number of paying toll tax.
“In a month after the announcement, only a consultant company has approached us with a project proposal. This also shows the low level of interest among private investors to invest in transport infrastructure under the PPP model,” he said.
The government is preparing to build a multi-billion dollar Kathmandu-Tarai fast track under the PPP model. However, the private sector is reluctant to invest due to political uncertainty, unclear federal structure of the country and frequent obstructions that pose a threat to projects run under the PPP model.
“Implementation of PPP model in our country is still difficult as long as the government cannot create a climate for new investments by guaranteeing security,” Pradeep Jung Pandey, Vice President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) told Republica on Thursday.
Pandey also demanded that the government first come up with the clear vision and laws before calling private sector to make investments under the PPP model.
“Though the government initiative to encourage private investors is encouraging, injecting huge sums of money in infrastructure is risky, especially in the backdrop of frequent bandas, labor unrest, low prospect of returns, lack of government vision and stable government to implement the industrial policy in the country,” Pandey added.
Though the government has adopted the policy to encourage PPP, only the hydropower sector has seen investments from the private sector under the model.
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