Public Private Partnerships in 2023 and reflections of the past

About 25 years after the concept was first discussed at a Residential Workshop at the Triton Ahungalle, sponsored by USAID for the public sector, at which I attended as a private sector nominee of the Ceylon Chamber of Commerce and more than two decades since the first PPP-SAGT was designed and implemented, we are yet stuck on the drawing board to make potentially readily doable, PPPs happen in Sri Lanka.

This article of February 2017, was published after a two-year wait for policy direction, from a Government whose key alliance partner was the one that “opened the economy.” Yes, that was in 1977, 40 years before 2017, one year before Sichuan, China, born Deng Xiaoping substantially embraced market economics, in 1978, and 14 years before Pakistan born, Oxford educated Economist, Manmohan Singh opened the Indian economy in 1991.

Despite Cabinet approval in January 2017, PPPs were not to be, throughout that Government’s administration until 2019, much to the disappointment of several of us who submitted proposals for a proactive dedicated unit. Now another almost four years later what are the PPPs that have been implemented?

Today as at October 2023, is there political will to demonstrate honest courage and nerve, I ask, or do we wait for a Diagnostic Assessment also by the World Bank and the Asian Development Bank – our “Development Partners” now that we have the Diagnostic Assessment of the IMF, telling us much of what we already knew and should have done.

Flashback 2017

Here are a few extracts of the article of 2017, published in the Daily FT.

“Do we have an apex institution for infrastructure design, development, financing and implementation? Do we have an apex institution, legally enabled, technically and financially adequately resourced, to implement PPPs in economic infrastructure? Perhaps we need one.”

Alignment of interest and Sri Lanka first

“My message to Government and the Opposition, policy planners and project participants, well-wishers and detractors, is that we must move beyond the academic discourse, and even the drawing board, to get on with PPPs. But private parties, both on and offshore, should be well advised not to “steal a deal” from the Government and the country but to necessarily have an alignment of interest and if I may adopt the words (rather than the deeds!) of Donald Trump – Let us think Sri Lanka first and not “grab” a deal as it were.”

The Cabinet decision (of January 2017) is refreshing

“It was refreshing to learn that finally, at least 24 months after January 2015, the Cabinet of Ministers approved proposals to formally embrace Public-Private Partnerships (PPPs) as a policy and strategy. The Ministry of Finance is expected to handle this subject through a PPP division, which together with PPP cells in relevant ministries, is intended to facilitate selection and implementation of the Government’s priority projects. The main aim of the PPP division is to provide oversight in execution, transparency, good governance, formulation of policies and recommendations to the Cabinet Committee on Economic Management.”

However PPP design must be a win-win for both partners

“It is an imperative that PPPs are conceptualised and designed well, if they are to be a credible, feasible, potent vehicle for rapid, but what I like to term “equally partnered” economic development. Governments will have to ensure that PPP Agreements are negotiated carefully, and a “win-win” achieved for both key partners, if it is to secure the “buy in” of genuine stakeholders as well as disruptive detractors. But we must walk the talk, so let us get on with it. My motivation to put pen to paper is driven by the fact that, there has been far too much talk of PPPs by successive Governments, over well more than two decades.”

A legal, regulatory, and institutional framework is a necessity

“We need to take off and take off rapidly, and the momentum of that PPP journey has to be maintained. Hence before the program gets stuck in the mud, falls in a rut, sometimes a self-inflicted one and that sadly is becoming a habit, it is important that the Government ensures that implementation of PPPs are facilitated by an appropriate legal, regulatory, institutional and financial framework. In essence we have to have a policy, a strategy, a structure, and a general and sector specific PPP program, rather than attempt PPPs based on unsolicited proposals alone or on an ad hoc basis.”

I am optimistic of the future. Let me close with the words of US President Bill Clinton when he said in his year 2000 State of the Union address: “As long as our dreams outweigh our memories, we will be forever young. That is our destiny. And this is our moment.”

*End of Extracts*

The last line was my optimism 6 plus years ago. Are we still dreaming? Now my memories are becoming longer than my dreams.

Here’s a link to the full article of 2017: (https://www.ft.lk/article/597519/Public-Private-Partnerships:-Let-us-get-on-with-it--Part-1)

(The writer is former Chairman, SEC Sri Lanka, and Past President CA Sri Lanka.)