By Hamid Mahmood ISLAMABAD, Mar. 18 (INP-WealthPK): Pakistan has considerable support for public-private partnerships (PPPs) at the federal and provincial levels. However, both geographically and across industries, the country's regulatory system remains fragmented which needs to be strengthened. Provinces are responsible for local infrastructure development under the Constitution, and Punjab and Sindh provinces have expertise with legislation and PPP deals. In an interview with WealthPK, Adnan Khan, a socio-economic development specialist, said that CPEC Phase II is about the soft infrastructure that is seldom visible on the ground. “For instance, if we require research and mechanization in order to build a corporate forming with government-to-government (G2G) collaboration it would not be possible for high-level research. For research, we must enlist the help of the private business sector because it spends billions of dollars on research and development. Unfortunately, Pakistan's private sector is not as efficient as we require,” he said. Adnan Khan said the government organised a meeting between Pakistani and Chinese private businessmen before the prime minister’s travel to China to explore new investment avenues under special economic zones (SEZs). After discussing investment ideas, both sides of the investors signed memorandums of understanding (MoUs). In order to carry out the MoUs, Prime Minister Imran Khan promised that the government will assist investors when necessary. “We are now in a position to execute a 13 billion-dollar B2B investment after one and a half years,” said Adnan Khan. The PPPs are dynamic systems, yet no single PPP model is appropriate for all countries. The PPPs, in general, result in longer-term service contracts and the transfer of project risk from the government to the private sector. They do, however, enable public supervision to guarantee that social goals are given top priority throughout implementation. By coordinating projects with the government, the PPPs improve efficiency. Furthermore, the PPPs can be beneficial if both the public and the government think that public service delivery should stay in government hands. Pakistan 2025: One Nation, One Vision (also known as Pakistan Vision 2025) is a 10-year development plan proposed by the government in 2015 that provides a comprehensive policy framework to support the PPPs. According to the State Bank of Pakistan, infrastructure spending should account for 10% of the country's gross domestic product (GDP), but it only accounts for around one-third of that. Pakistan Vision 2025 sets the groundwork for the country's rapid development, with the ultimate objective of transforming Pakistan into one of the world's top ten economies by 2047, the country's centennial year. In 2019, Pakistan's government announced a three-year Public Sector Development Plus Program (PSDP+), which includes 53 mega projects worth more than $33.58 billion that would be implemented over three fiscal years from 2020 to 2023. There are 29 initiatives in 11 industries with no government funding at the outset, which are estimated to contribute $18.73 billion in direct investment into the economy. The government would also offer an enabling climate for the private sector to come in, promoting the PPPs and joint ventures to decrease the load on the PSDP, through public sector investment. The private sector's resources would be utilized with the support of the PPP Authority to supplement the PSDP, attracting local and international direct investments in economically viable projects. The PPPs will lower transaction costs, maintain proper regulatory oversight, and offer a legal and economic framework to support development efforts. According to WealthPK research, World Bank reported that the Private Participation in Infrastructure (PPI) included 118 infrastructure projects that drew private capital and were completed between 1990 and 2021. The majority of the projects were in the energy industry. The 118 PPP projects have received a total investment of $33.25 billion. The status of a variety of PPP initiatives across industries is depicted in the figure below. [caption id="attachment_64948" align="aligncenter" width="628"] Source: World Bank/WealthPK[/caption] The importance of both the private and public sectors in supporting infrastructure and industrial growth justifies the use of robust PPPs to organize funding. In terms of fostering entrepreneurship, assisting start-ups in their early stages, and bringing new information and skillsets, the Pakistani diaspora's role in sustaining economic corridor growth in the nation is equally crucial. As a result, the government must remove administrative barriers in order to maximize the benefits of the diaspora's people and capital contributions. Bilateral and multilateral assistance can help to bolster these contributions even further. Given the government's limited budgetary resources, the government should make use of private sector resources, particularly through PPPs. The government needs to strengthen the legal, regulatory, and institutional frameworks and capacities to bring bankable PPP projects to the market.