ISLAMABAD: The government has introduced a bill in the National Assembly to establish a Privatization and Public-Private Partnership Commission by merging the existing Public-Private Partnership Authority and Privatization Commission, aiming to prevent duplication of institutional functions and processes.
The proposed law, which seeks amendments to the Privatization Commission Ordinance 2000 and the Public Private Partnership Authority Act 2017, also provides legal and investigation immunity to current and former chairmen, secretaries, board members, officials and consultants for any act of omission or commission done in good faith and in a personal capacity. It also commits public funds to contest any such cases.
The commission will be led by incumbent chairman Muhammad Ali and will comprise a majority of members from the private sector, including two women directors. It will collectively administer four public funds — the privatization fund, public contributory fund, viability gap fund and PPP project development funds — created through federal budget allocations, receipts from international lenders, investment income or any other source.
The government says the PC Ordinance dealt with privatization of state-owned enterprises under government policy while the P3A Act governed a separate body. Both frameworks were concerned with mobilising private sector capital and expertise in relation to public assets, infrastructure and services, and their administration through two separate institutions entailed duplication of institutional functions and processes.
The government's policy decision was needed to establish a single institutional framework and mechanism for carrying out privatization and public-private partnership transactions efficiently, according to the draft. It seeks to reconstitute the Privatization Commission as the Privatization and Public-Private Partnership Commission, repeal the Public Private Partnership Authority Act 2017 and dissolve the P3A.
The bill provides for reconstitution of the board with a majority of independent members, including members with public-private partnership experience and at least two women, fixed terms of office and clear grounds for disqualification and removal. It also empowers the proposed commission to advise on, appraise, structure, facilitate and monitor PPP projects and to establish the viability gap fund, the PPP project development facility and the public contribution fund.
The draft claims it provides a comprehensive legal framework for public-private partnerships, including the contractual framework for PPP agreements, a federal PPP pipeline, the approval process, the risk management unit and PPP transaction execution committees. It also empowers the commission to set up PPP nodes within government agencies, settle disputes and provide an alternative process for below-threshold projects.
The proposed law enables the commission to use the public contribution fund to meet government obligations on PPP projects, including land acquisition, site handover, right of way and other enabling actions. All these funds would be non-lapsable.
PPP agreements between public and private parties shall be public documents, and any interested person shall be entitled to obtain a copy subject to applicable laws. The government, the commission or the government agency shall not be held liable for any claim by a private party for a risk not specified in the PPP agreement. All existing contracts signed by P3A would stand transferred to the new commission without any disadvantage to the private parties.
The proposed law empowers the commission to require in writing from any government agency a complete list of its existing, proposed and planned projects, including projects under consideration or development, whether or not identified as PPP projects, within 15 days. Agencies shall be obligated to comply with full accuracy and completeness. Where an agency fails to comply, the PC chairman may refer the matter to the ministry or division concerned for compliance.
A committee will review potential PPP projects proposed for inclusion in the federal PPP pipeline and provide recommendations, which shall be placed before the board for consideration and decision.
All officers, consultants, advisers, auditors, employees and other staff of the P3A shall, upon dissolution of the P3A, be retained by the commission for six months or until the expiration of their respective contracts, whichever is earlier, on terms and conditions not less favorable than those applicable to them immediately before the dissolution.
