Punjab: Govt to promote public-private co-operation

Faisalabad: Punjab government is developing a new strategy to promote public-private co-operation with a clear road map for the role of public sector in fostering private sector-led growth.

According to Planning and Development Department (P&DD) sources, this strategy will be achieved under the direction of a private sector development (PSD) committee, which will co-ordinate policy initiatives and streamline government policy across the relevant departments.

P&DD sources mentioned that private sector reform initiatives under Punjab Resource Management Program (PRMP) were largely stand-alone interventions with a limited strategic view of how best to foster private sector-led growth.

Under the Efficiency Improvement Plan, P&DD sources stated that the development of a well-defined private sector development strategy would form a major building block for forthcoming development projects/programmes.

In parallel, P&DD sources pointed out that the provincial government would also take specific measures to promote private sector development (PSD). First, it has put in place an effective strategy for communicating to enterprises in the provinces the need to comply with core labour and international quality and environmental standards. It will also review the current norms in place in the Punjab and take measures to close the gap between provincial and international requirements. Second, the government will institute a regular survey on the cost of doing business in the Punjab, P&DD sources added.

P&DD sources explained that the survey would set benchmarks for performance, & allow tracking of costs and of progress made, and allow regular and continuous assessment of relevant issues. It will identify the key problem areas and allow the provincial government to address the legal and institutional reforms needed to bring down the cost of doing business. The government will also institutionalise a regulatory impact assessment mechanism in relevant departments.

For public-private partnership (PPP) arrangements to be effective, official sources admitted that there needs to be a comprehensive legal and regulatory framework and mechanisms. To initiate this process and to co-ordinate overall PPP implementation, the government has created a PPP cell in the P&DD with clear tasks, given the complexity, lack of understanding, and multiple actors involved.

The government will also prepare a risk management framework and establish funding mechanisms to provide resources that will reduce the viability gap in projects. The government is expected to identify a number of PPP opportunities and to implement the regulatory framework adopted throughout the Government's Efficiency Improvement Programme.

Meanwhile, in a project review report, Asian Development Bank's experts said that the private sector still operates mostly in the informal sector, as the high cost of doing business presents a significant barrier to entry. The Punjab government, on the other hand, recognises that it cannot meet on its own the significant investment requirements in infrastructure and other services.

The remaining challenges include the role of the government in private sector development must be better defined. It must be clarified that the government is expected to (i) formulate and implement laws, rules, and procedures to govern the functions of the private sector; (ii) make the regulatory framework more efficient and effective, (iii) provide infrastructure facilities; (iv) provide social sector services; and (v) resolve issues related to the provision and the treatment of public goods, as well as collective action issues that affect key sectors in the provincial economy.

Commenting over the 'Weak Prioritisation and Coordination of Policy for Private Sector Development', ADB experts report mentioned that the Private sector development initiatives and measures intended to give the private sector a greater role in service delivery are poorly