Public Private Partnership

(PPP)
Dr. Raghu Bista

Background
Poor infrastructure impedes a nations
economic growth and international
competitiveness. Insufficient
infrastructure also represents major
causes of loss of quality of life, illness
and death. In order to stimulate growth
and reduce poverty, it is essential to
improve the supply, quality, and
affordability of infrastructure services.
The unmet demands are huge, and
investments have not matched demand.

Background
Public-private partnerships (PPPs)
offer alternatives to attract new
sources of private financing and
management while maintaining a
public presence in ownership and
management while maintaining a
public and strategic policy setting.

Defining PPP
Public private partnerships are ongoing
arrangement between public and private
organisations in which the private
organisation participates in the decision
making and production of a public goods
and services that has traditionally been
provided by the public sector and in
which the private sectors shares the risks
of that production. John Former, James
Kee, Kathryn E. New Commer, Eric Boyer
(2010). Public Private Partnership and the
Public Accountability Question, Public
Administration Review, May/June, 70, 3

Public Private Partnership

Projects
Public Private Partnership is a way of creating
product/service and delivering service/product
through the resource of public sector and
private sector combinely.
PPP projects are the projects that is financed
and constructed under any form of PPP model.
There will be contractual agreement between
Government and private organisation. Usually,
private party designs, finance, consult, owns,
and operate infrastructure or service projects.

Relevancy of Public Private

Partnership in Development
Attracting private resources in areas where
traditionally public sectors take responsibility
Efficient production and distribution of public
services (saving in cost of project, saving in
operating cost, leakage prevention etc)
To quicken the development activities to
meet the growing demand of infrastructures
To provide investment opportunities to
private sectors
To attract foreign capital in infrastructure
development

Methods of Partnership
There are many methods of
partnership under the name of PPP
model. Bot (Build, operate and
transfer). Similarly there are other
methods like Management Contract,
Lease Contract, concession etc.

Introduction to PPP projects

through BOT Projects
BOT projects places the responsibility
for financing, constructing and
operating the project on the private
party (page 93). The host country grants
a concession to the private company to
build and operate the facility over a
period of time. The private company
then uses the revenue from the
operation of the facility (Sources: Jeffrey
Delmon (2009). Private Sector Investment in Infrastructure,
A co-publication of Kluwer Law International , Netherlands)

In Nepal, Boot (Build, own, operate and

transfer) is a more common name.

Why BOT?
BOT means build operate transfer , a
term said to have been coined by Turgat
Ozal, Prime minister of Turkey in the
1980s. A BOT projects involves a granter
providing a private company with
concession to build and operate a
project (often to support a public
service). The private company operates
the project for the term of concession
(the concession period).

Pre-requisites for a successful

PPP Projects
Political will and stability
Clear regulatory framework, policies,
guidelines from the government side
Profit opportunities for private
sectors
Transparent and Competitive
selection Process

Policies and Legal Aspects

related to PPP in Nepal
Privatization act 2050, Local self
govenance act 2055 and regulation
(for local level PPP projects), Public
private partnership policy 2060 (for
local level), Private Financing in Build
and Operation of Infrastructure Act
2063, Nepal PPP white paper 2011
etc.