Govt gears up to implement model PPP project

Govt gears up to implement model PPP project

4 June 2015 | The Himalayan Times

KATHMANDU, JUN 3: The government has initiated the process of implementing a ‘model project’ under Public Private Partnership (PPP) as it gears up to rope in the private sector in the nation-building process. The government currently has five projects in hand which could be implemented under the PPP model. They are: expansion of tourism training centre in Pokhara, development of an exhibition centre and related facilities in Butwal, construction of multi-layer car parking facility in Kathmandu, development of mass transit service in Ring Road of Kathmandu and construction of cable car at Swargadwari, Pyuthan.International consulting agency, Deloitte Touche Tohmatsu India, has already submitted pre-feasibility study reports on these projects. “The PPP steering committee led by the finance secretary will now choose one project among the five and implement it under PPP model,” Surya Prasad Acharya, chief of the Economic Policy Analysis Division at Ministry of Finance, told The Himalayan Times. “Once the project is shortlisted, we will conduct detailed feasibility study on it.”

The government has decided to implement the model project to identify legal, regulatory and institutional gaps so that infrastructure projects to be built under PPP model in the future do not face hurdles. Of the projects that have been identified, one is on mass transit service, which has proposed introducing Bus Rapid Transit (BRT) service in Ring Road of Kathmandu.“BRT system offers lower initial capital deployment, speedy implementation, flexibility in capacity management and operations. Financially, it is the most attractive option to engage the private sector,” says the pre-feasibility study report, which has recommended concessional period of 30 years, and fares of Rs 20 and Rs 30. Another project identified by the government is operation of cable car from the village of Bhingri to Swargadwari Temple in Pyuthan.The pre-feasibility study report has proposed using Monocable Fixed Grip Circulating system, with capacity of ferrying 140 passengers per hour along the 3.3-km route.“The cable car system will comprise two terminals, 15 towers or trestles supporting 66 passenger carriers,” says the report.

Also, the government has the option to build multi-layer car parking facility at Lainchaur Ground, opposite Malla Hotel or develop an exhibition centre in Butwal on 11.25 hectares of land, which will include exhibition facility, hospitality facility, amusement park and general facilities.If none of the projects suits the need of the government, it can expand Tourism Training Centre in Pokhara. The training centre, established in 1996, currently has limited capacity in academic bloc and lacks residential facility. To make it competitive and ensure production of finer products, the report has proposed development of hostel complex with mess service, hotel with restaurant, adventure sports training centre and a new academic bloc with advanced training labs. The government has long been trying to introduce the PPP Policy to engage the private sector in the nation building process. This way, the government does not need to necessarily mobilise its own financial resources and expertise to meet every infrastructure need of the country.This concept is also popular in many developed and developing countries, where the government only plays the role of a facilitator, while private sector raises funds to build projects like roads, bridges, hydropower plants and transmission lines. Once completed, these projects are used by the developers for certain years, during which they recoup investment and generate some profit. The projects are then handed over to the government free of cost and in a good working condition.