Public Private Partnership (PPP) is a long-term agreement between a private party and government agency for providing public assets, in which private party bears significant risk and manages responsibility (World Bank, 2012). Acknowledging, that the relationship between the public and private sectors is very integral as, both the parties hold to be the prime stakeholders of each other in almost every mode. And so, the PPP model helps them further build a joint venture, initiating official projects for long term sustainability.
Being a cooperate-venture, under PPP model, private and public agencies collaborate to accomplish a fair and rational goal for the goodwill of the society beyond just aiming to generate profits. Thus, the model is accountable to impact the socio-economic the situation of the nation and is regarded to be an effective way to diversify the risk, where both public and private sector allocates their responsibility and resources in a cost-effective manner, saving both the time and the money.
Moreover, PPP is also regarded to be an efficient way to introduce private sector and their capabilities and innovations to the mass, and simultaneously, improving the public operations with private expertise. Likewise, this model is also a great strategic, FDI move for foreign or international firms to enter any potential nation, mostly in the developing and underdeveloped countries, who are ready to embellish the private participation and are looking for socio-economic uplift, which adds to create a long term value to the nation.
Furthermore, in developing nations like Pakistan, India, Nepal, and many more, the main thing to consider is their political situation, as in most cases the developing nations tend to have delicate political status. So, its pivotal to remain updated and work side by side, intensifying to the nation’s political phenomenon; as without government support, it becomes very difficult for any firm to establish itself in a new market. Therefore, PPP projects help the firm to ensure government support and attract fine acceptance from the citizens with their direct and indirect participation.
Hence, the PPP project can be an opportunistic model to adapt by an investor if they are trying to enter a new market. It helps them secure their investment, due to direct government support and involvement, and, builds their portfolio along with a strong network. Nevertheless, these projects uphold long-term ventures that carry high-value investment and have the potential to generate immense revenues. Therefore, it requires longer-term commitments, where the investor must be ready to commit at least 15 to 30 years’ timeline, if needed.
However, with the requirement of long term commitment, PPP ensures limited risk as both the parties invest equally either with their financial support (manpower and budget) or with their expertise (knowledge and network), leading both the parties to a win-win situation. Moreover, as per the expertise of an investor, they can choose any type of PPP that fits to their proficiency and goals, for example, some of the basic forms of PPP are build-operate-transfer (BOT) model, Build-Lease-Transfer (BLT) model, Design-Build-Operate-Transfer (DBFOT) and the Operate-Maintain-Transfer model (OMT).
Likewise, in the developing and under-developed nation, the common PPP projects that the potential investors or firms can look into are infrastructure development (transportation, electricity and water supply projects) and financial development (funded products, financial intermediaries, and project development funds).
For instance, in India PPP model, is known to be very successful, as both the government and private sector work hand in hand for the growth and development of a nation with innovative ideas that are socio-economically viable. And, as per Economic Times, India, many experts urge investors to review and involve in “infra-projects” on the basis of PPP model, as it “draws full commitment from its participants to deliver projects efficiently on deadlines, and leads to executing these projects as per international standards.”
Additionally, KAii also has a number of PPP projects in more than 20 developing and underdeveloped nations, curated with the commitment to deliver efficiently, cost-effective and sustainable ventures that are contributes to meet both to the societal as well as commercial purpose. Many of our projects are based on DBFOT, where KAii aims to provide full-fledged support, using our expertise in collaboration with the investors, to design, build and operate the project and transfer it to the respective parties.
Lastly, with its “Better World Goal” KAii is looking into building a friendly and healthy bond between all the stakeholders with our PPP projects, ensuring effective public resource management, increased transparency in the use of funds and proper enforcement and monitoring of the project. Thus, we aim to touch and work on all the public affairs from health to education to communication to transportation and many more for better tomorrow of today’s society, addressing combined efforts of both private and public sectors to compliment each other with respective core competencies.