ISLAMABAD: Pakistan needs to significantly expand its public-private partnership (PPP) project pipeline to meet rapidly growing infrastructure requirements, Adviser to the Prime Minister on Privatisation and Chairman Privatisation Commission Muhammad Ali said on Friday.
Addressing the National Strategic Dialogue on Mobilising Private Capital through PPPs and Privatisation, organised by the Asian Development Bank (ADB), Muhammad Ali said the existing federal PPP pipeline of 38 projects worth around $6.5 billion was insufficient to meet the country’s future infrastructure needs.
He said the government could not finance the required infrastructure investment on its own, particularly as Pakistan’s savings rate remains around 14%.
The adviser noted that Pakistan’s population is projected to increase from approximately 230 million currently to around 390 million by 2050, with nearly 190 million people expected to live in urban areas.
“This increases the requirement in urban infrastructure by roughly 100%,” he said, stressing the need for massive investment in hospitals, schools, energy and water infrastructure, railways, airports, ports and other essential services.
Private capital vital for infrastructure
Muhammad Ali said PPPs and privatisation would be critical instruments for Pakistan’s future economic growth, as the private sector could provide not only capital but also management expertise, innovation, skilled human resources and modern technology.
Pakistan, he said, had already demonstrated its capacity to execute PPP transactions, with around 154 projects worth approximately $36 billion reaching financial close since the 1990s.
According to the Pakistan PPP Monitor, Pakistan’s PPP portfolio ranks among the top 14 in the developing world and among the top 10 when measured against the size of the economy.
The adviser said the country already had the necessary legal and regulatory framework. The Federal PPP Authority Act was enacted in 2017, while all four provinces have established their own PPP laws and institutions.
He said the Federal PPP Authority, branded as P3A, was being consolidated under the Privatisation Division to bring PPPs, asset monetisation and privatisation activities under one roof.
“This will simplify procedures, improve investor coordination and enhance efficiency,” he said.
Larger project pipeline needed
The existing federal PPP pipeline comprises 38 projects worth about $6.5 billion, covering roads, railways, hospitals, hospitality, aviation and industrial estates.
However, Muhammad Ali called for a much larger and more diversified pipeline to mobilise private capital on the scale required to support Pakistan’s economic and infrastructure development.
He also stressed the need to standardise legal and transaction documents across the country’s five PPP authorities to accelerate project preparation and improve the pace of project completion.
27 privatisation transactions underway
On the privatisation agenda, Muhammad Ali said the government was currently pursuing 27 transactions involving power distribution companies, airports, insurance companies and banks.
Referring to the privatisation of Pakistan International Airlines (PIA), he said the transaction demonstrated the government’s ability and commitment to undertake complex privatisation deals.
Around Rs600 billion in legacy debt had been transferred to the holding company, while approximately $450 million in proceeds had gone into the entity to support its revival.
The government is also working on the sale of nine power distribution assets, with the objective extending beyond ownership transfer to broader power-sector reforms, including the introduction of a competitive supply regime and development of the sector along modern lines.
“Companies established to earn should not continue consuming public money,” Muhammad Ali said, arguing that private-sector management could improve operational efficiency, reduce revenue leakages and enhance service delivery.
He called for stronger investor confidence and closer coordination among ministries and government institutions, saying all stakeholders must work towards the common objective of mobilising private capital for infrastructure development and sustainable economic growth.
Story by Tahir Amin
