New public-private unit to improve public services
The Sri Lanka government is to establish a Public Private Partnership Unit (PPPU) with World Bank funding for long-term contractual arrangements between the public and private sectors in the delivery of public services. In this scenario, PPPs involve three main features including transfer, long-term contracts and partnership agreement, National Policy and Economic Affairs Ministry sources revealed. It will be entrusted with the task of developing new infrastructure services despite short-term fiscal constraints and gain value for money through efficiencies in procurement, construction and operation. The aim is to improve service quality and innovation through use of private sector expertise and performance incentives. The PPP Unit will be established in the Ministry of Finance, Investments Division soon with World Bank assistance as part of an initiative to promote Public Private Partnerships for infrastructure development projects in Sri Lanka and restructuring of some of the SOEs.
The Cabinet Committee on Economic Management (CCEM) has approved the establishment of the PPP unit at the Finance Ministry and forwarded the proposal for Cabinet approval recently. In the meantime Prime Minister Ranil Wickremesinghe will be presenting the 5-Year economic development plan outlining a road map for State-Owned-Enterprise (SOE) reform and the disposal of non-strategic state assets, a senior official of the Ministry added. At present there are 245 SOEs of which 55 have been identified by the Treasury as strategically important under the clusters of Banking and Finance, Insurance, Energy, Ports, Water, Aviation, Commuter Transport, Construction, Livestock, Plantation, Non Renewable Resources, Lotteries, Marketing and Distribution, Health and Media. A Ministerial Committee will also be set up to oversee the PPP execution of infrastructure development projects and the restructuring of SOEs. The PPP Unit will provides secretariat services to the PPP Ministerial Committee and has responsibility for developing and disseminating PPP policy throughout the public and private sectors.
It will also regulate the PPP programme to ensure these projects are developed in accordance with policy, principles and processes while contributing to the development of PPP projects by screening projects submitted by Ministries and agencies for consideration by the Ministerial Committee. The private sector is always looking for profitable ventures and thus reluctant to invest in services which are not profitable, a senior official of the ministry told the Business Times. Private investors are to be encouraged to enter into management contracts with the state for planning, implementation, financing and maintenance of certain infrastructural assets owned by the state agencies. Under this process, a certain project or an asset will be assigned to a private party for a specific period of 25 or 30 years under a concessionary agreement and after the expiry of the given period, it is to be transferred to the government, he added. The Government will soon introduce sweeping reforms on private-public-partnerships to reduce debt and improve public revenue.