"Government of Pakistan Initiate PPP"

Abstract

A general premise of economic freedom rests on the minimum role of the government in service provisioning. However there are services, or economic limitations of some recipients of these services, which make it difficult for the government to completely roll back from direct provisioning. This situation also arises where the private sector sees little economic incentives or experiences insurmountable regulatory restrictions. To counter these problems, a combination of public and private sector is used, commonly known as Public-Private Partnership (PPP). As such, an increase in the PPP based contracts or investments in PPP based contracts, reflects a greater level of economic freedom as these contracts increase the role of the private sector in traditionally public sector dominated areas. The Government of Pakistan issued a comprehensive policy document on PPP titled ˜Private Participation in Providing More and Better Public Services through Improved Infrastructure in 2007. It stipulates objectives, implementation structure, viability gap funding, and project life cycle with respect to PPP contracts. This document states that “many economically and socially worth projects lack the ability to raise the requisite revenues to ensure adequate returns for the investor risk.”