Misconception about Public Private Partnerships highlighted

Ramani KANGARAARACHCHI

There is a misconception about Public-Private Partnerships (PPPs) in some people’s minds. They mix this up with privatization or privatization of infrastructure by stealth.

The Government cannot absolve its responsibility of delivery of such services through the private sector, said Minister of Enterprise Development and Investment Promotion Anura Priyadarshana Yapa.

He was speaking at the inauguration of the Public Private Partnership Awareness Program at the Mount Lavinia Hotel yesterday. It was organised by the BOI in collaboration with the Commonwealth Secretariat.

He said that the PPP contract provides a stronger mechanism to ensure that the desired service outcomes are delivered throughout the life of the asset.

Minister Yapa said that there is an infrastructure gap in the country and over the years the percentage of infrastructure investment has remained around four to five percent of the GDP. The economic growth for 2008 was 6.0 percent in terms of GDP.

Foreign Direct Investment in 2008 amounted US $ 889 million and the Government hopes to reach US $ 1 Billion in FDI this year. The forecasted economic growth according to the ten-year development framework of the Government is 8 percent to 10 percent, he said.

Traditionally the country has funded infrastructure projects either from Treasury funds or Donor Funds. There are advantages and disadvantages of both these systems.

One has to reach out to the private sector, private savings and other mechanisms available in the market today to raise funds to fund such ambitious infrastructure projects, he said.

Minister Yapa said that some sectors have shown a dramatic growth as a result of Public-Private Partnerships and some others have not attracted such investments. The Telecom and power generation sectors have attracted private investments. Several hydro and thermal projects have also been established with private sector investment.

He said that Public Private Partnerships are possible not only in major infrastructure sectors but also in the delivery of other services which have been traditionally provided by the Government.

Building of schools, hospitals and even prisons has been done on a Public-Private Partnership basis in countries such as UK and Australia.