PUBLIC-PRIVATE PARTNERSHIP IN AGRICULTURE
THE PROJECTS ARE STUCK IN THE STRUCTURING PHASE
TARIQ AHMED SAEEDI
Mar 1 - 7, 2010
It has been almost two years since first public-private partnership policy guidelines to facilitate private investments in infrastructure developments in different sectors of agriculture economy of Sindh came to surface. However, majority of the identified projects are still stuck in the structuring phase.
A usual timeline for a project to move ahead from the structuring stage is 6 to seven months, argues the architecture of policy guidelines, Khalid Shaikh. According to Sindh finance department, some sixteen projects including establishment of salvage farms and chilling tanks and development of livestock and dairy farming have been identified so far for public-private partnership. However, only one or two has seen the daylight. In the structuring phase, viability of a project in terms of its cost and other factors is assessed. In short, this stage evaluates what will make a project attractive for the private sector. 'We conduct due diligence of the project,' says director corporate services, public-private unit, Sindh finance department. It is obvious that private investor cannot collaborate with the government for developments until he is assured of investment security. Some of the projects are identified in food department. It is a challenging task to showcase these projects of food storages and dryers for private sector because of the runaway corruption and previous track records of funds' embezzlements in the department, a senior official on condition of anonymity tells this scribe.
Sindh Assembly has passed Sindh Public-Private Partnership Act 2010. The Act reads [it is] "to create an enabling environment for private sector participation in infrastructure development projects. The Act defines public-private partnership as a partnership that is carried out under a public-private partnership agreement between the public sector represented by an agency and a private party for the provision of an infrastructure facility, management functions, and/or service with a clear allocation of risks between the two parties." Public-private partnership unit has been established in the finance department therefore to execute structuring and due diligence of mega projects. It is a central point where all projects are gathered to be cross matched with the provincial need of developments.
The approval process is not seemingly cumbersome as agency or government department after identification of project forwards it to the consideration of public-private partnership unit, which prioritizes and reviews project under the light of provincial development objectives and then puts its for final corroboration before public-private partnership policy board.
However, a 10-step PPP project commencement sequence elongates the gestation period. Policy guidelines outline the steps a proposed project passes through before coming on ground starting from submission of project to PPP unit to negotiation and contract signing. To some slow realization of PPP project has reason in to this procedural overloads. Less time taking steps should replace time-consuming procedures in order to quicken implementation of public-private partnership projects, says an official.
Dilapidated roads, difficult farm to market accessibility, shortage of crop-warehouses, insufficient hatcheries and sheds, lack of research facilities, technological constraints in improvement of agriculture production, etc. are dampening growths of agriculture, livestock, and fisheries.
Some of the sectors in the province are in urgent need of investments that could enhance their productivity and shares in the economy. Fisheries sector has been facing apathy of successive governments despite its untapped potential vital both for the economy as well as for poverty alleviation. "Due to the high geophysical risk, unprecedented siltation problems requiring expensive dredging, declining fish catch volumes and continuing serious environmental degradation throughout coastal Badin and Thatta, the prospects for building and successfully operating any fish harbours large or small, anywhere in the delta, are very poor," says a competitiveness support fund fisheries infrastructure survey of Indus delta in Badin and Thatta districts of Sindh. According to the survey, investments in small-scale infrastructure such as shed and pontoon can change the shape of seafood industry in addition to socioeconomic conditions of angler-community.
Once realised, public-private partnership in developments would bring about a breakthrough for the decrepit infrastructure that is drain on resources of the province.
Sindh government departments proposed following projects for establishment, construction, and development under PPP: dairy village and processing zone for meat animals at district Thatta, dualisation of Hyderabad Mirpurkhas road, private schools in rural areas and slums, cadet college Naukot district Tharparkar, Sindh college of arts & design at Sukkur, institute of management sciences at districts Nawabshah and Dadu, engineering colleges at Larkana and Khairpur, recreational resort at Gorakh Hill station, Kheerthar national park, light rail train in Karachi, sewerage III in Karachi, and recreation resort at Keenjhar Lake, Thatta.
Dualisation of 67-km Hyderabad-Mirpurkhas road has neared to financial close and the project has been approved by the board with the completion of due diligence, informs Khalid Shaikh.
Since PPP is commercial in nature, private entity would come to realise profits from the project in which it risks money. If people have to pay high price in the name of efficiency and effectiveness the objectives behind PPP then the partnership will not serve the masses in the end. A critic fears private participation increases price of goods and services. Agriculture inputs such as pesticide and fertilizer used to be tagged low price until they would not come out of the control of government, he recalls. Government is to upgrade sick units before putting them for auction. No one is interested in sick seed corporation.
Private participation is imperative for capital intensive projects, as realised by the government since its onset. Information sharing culture in government departments is essential to strengthen interdepartmental coordination, which is extinct.