The government’s expansive and detailed draft Public Private Partnership (PPP) policy is unique in that it offers a lot of opportunities for the private sector.
However, the first priority of the policy, and rightly so is to provide better social infrastructure and services to the public in the face of limited resources.
PPP essentially is the private sector partnering with the government to deliver infrastructure or services.
An interesting aspect of the policy is the recommendation that the government approach foreign multilateral agencies for a credit line which is then passed on to a local bank so that it in turn can lend to the private sector for the PPP projects.
This is a positive proposal as the biggest constraint holding back the development of a strong private sector in Bhutan is the lack of access to finances.
PPP by itself is not a new idea as it is being used internationally by many countries particularly in big infrastructure projects.
One project that comes to mind in Bhutan could be the tunnel between Thimphu and Wangduephodrang. It is clear that the tunnel does not fall in the five year plans of the government which has other more pressing needs.
However, if a private company can build it then the company to recover its investment could collect a toll tax for a fixed number of years. The toll tax would make sense for people saving on time and fuel.
At the same time the government will have to be very clear from the start and ensure that all legal and regulatory loopholes are taken care of as some PPP’s can also lead to big losses or become controversial.
You cannot have development in today’s world without partnering with the private sector.