NPC seeks revision in PPP Policy to pave way for PPP Center

Published On: March 14, 2017 12:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 14: The Public Private Partnership (PPP) Policy, which was endorsed in October 2015, had envisaged setting up PPP Center at the National Planning Commission to facilitate project preparation and assist developers to expedite PPP projects.

The center is yet to see light of the day even though it has already been one and half years since the policy was endorsed. Now, officials of NPC have started discussion for revising the policy.

NPC wants to make some changes in the policy to make it workable. Among others, the apex policy making body of the government, wants an NPC member to chair the steering committee of the PPP Center instead of finance secretary. Similarly, it is for increasing the threshold for projects that require mandatory foreign investment from Rs 1 billion to encourage domestic companies.  

The PPP Policy was prepared by the Ministry of Finance with technical assistance of the Asian Development Bank. 

“We want the policy to be more workable and also set a strong foundation for PPP Act which is in the drafting phase,” Sunil Babu Shrestha, an NPC member, told Republica. “NPC members are capable enough of coordinating with all the secretaries. Also they are higher in government hierarchy compared to secretaries.”

NPC is organizing a discussion on the policy on Tuesday where independent experts are presenting papers on the policy.

Similarly, clarity in the jurisdiction of the to-be-formed PPP Center and Investment Board Nepal is needed as both the entities are doing similar jobs, according to NPC officials. 

NPC also wants to fix optimum percentage of the project cost on providing financial support through viability gap funding (VGF) in PPP projects. Existing policy has given such authority to the steering committee. 

VGF may cover 25 to 35 percent of the project cost as per the international practice.

“IBN also has to seek the center's support in providing VGF in any projects that it manages,” added Shrestha. 

The policy is also against Public Procurement Act which has set a threshold of Rs 6 billion for international bidders. International contractors should form a joint venture with local firms to participate in bids ranging from Rs 1 billion to 6 billion.

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