PUBLIC-PRIVATE

PARTNERSHIPMONITOR

PAKISTAN

JULY

ASIANDEVELOPMENTBANKADB

PUBLIC-PRIVATE

PARTNERSHIPMONITOR

PAKISTAN

JULY2021

ASIANDEVELOPMENTBANKADB

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?2021AsianDevelopmentBank

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DOI:http://dx.doi.Org/10.22617/SGP210251-2

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Notes:

Inthispublication,U$MreferstoUnitedStatesdollars.

ADBrecognizes"China"asthePeople'sRepublicofChina,"Korea"astheRepublicofKorea,and"Vietnam1*asVietNam.

Onthecover:

ADBissupportingthedevelopmentanddeliveryofpublic-privatepartnershipprojectsinPakistantoaidin

bridgingthegapinthecountry*sinfrastructureinvestments(photosbySaraFarid/ADB:windturbinesinThatta

District,womanfarmer,windpowergenerationplantattheFoundationWindEnergy-1Limited,andconstruction

siteattheHeadBallokiextensionprojectinPunjab;NasrurRahman/ADB:solarpanelsinKhushabDistrict;

andSyedMuhammadRafiq/ADB:aerialviewofKarachi).

CoverdesignbyClaudetteRodrigo.

Contents

Tables,Figures,andBoxv

Y

Forewocd—八

Acknowledgmentsxii

DefinitionofTermsxiii

Abbreviationsxix

GuidetoUnderstandingthePublic-PrivatePartnershipMonitorxxi

Overviewxxi

NationalPublic-PrivatePartnershipLandscapeIndicatorsxxii

Sector-SpecificPublic-PrivatePartnershipLandscapeIndicatorsxxiii

LocalGovernmentPublic-PrivatePartnershipLandscapexxiv

CriticalMacroeconomicandInfrastructureSectorIndicatorsxxv

TimePeriodsxxv

CurrencyEquivalentsxxvi

I.Overview1

II.NationalPublic-PrivatePartnershipLandscape8

III.Sector-SpecificPublic-PrivatePartnershipLandscape43

A.Roads43

B.Railways52

C.Ports60

D.Airports67

E.Energy..75

F.WaterandWastewater86

G.InformationandCommunicationTechnology93

H.SocialInfrastructure98

I.OtherInfrastructure105

ivContents

IV..LocalGovernmentPublic-PrivatePartnershipLandscape111

Appendixes119

1Methodology119

2MacroeconomicandInfrastructureSectorIndicatorsofPakistan.149

3WorldBank'sEaseofDoingBusinessParametersforPakistan.154

4AssessmentofPublicFinancialManagementSysteminPakistan,2012.157

References159

Tables,Figures,andBox

Tables

1MajorSponsorsActiveintheInfrastructureSector..4

2OverviewofProvincialPublic-PrivatePartnershipFrameworksinPakistan..9

3TypesofPublic-PrivatePartnershipsintheProvincesofPakistan12

4EligibleSectorsandSubsectorsforPublic-PrivatePartnerships.14

5Public-PrivatePartnershipProcurementProcessinPakistan..20

6InstrumentsofFederalGovernment'sFinancialSupportinPakistan37

7KeyInfrastructureFinancingSourcesinPakistan40

8BanksinProjectFinanceinPakistanin24MonthsPrecedingDecember201941

9ActiveProjectSponsorsinPakistanin24MonthsPrecedingDecember201941

10StatusofRoadInfrastructureProjects..43

11ForeignInvestmentintheRoadSector.44

12RoadSectorProjectsinPakistanatVariousStages44

13Public-PrivatePartnershipPipelineProjectsintheRoadSector.47

14TariffsforTollRoads..51

15RiskAllocationofPublic-PrivatePartnershipProjectsintheRoadSector51

16FinancingofPublic-PrivatePartnershipProjectsintheRoadSector52

17StatusofRailwayProjects..52

18ForeignInvestmentintheRailwaySector53

19ListofProjectsatVariousStagesintheRailwaySector54

20FinancingofPublic-PrivatePartnershipProjectsintheRailwaySector60

21StatusofPortInfrastructureProjects..60

22ForeignInvestmentinthePortSector62

23RiskAllocationofPublic-PrivatePartnershipProjectsinthePortSector66

24FinancingofPublic-PrivatePartnershipProjectsinthePortSector67

25StatusofAirportInfrastructureProjects67

26ForeignInvestmentintheAirportSector70

viTables,Figures,andBox

27FinancingofPublic-PrivatePartnershipProjectsintheAirportSector74

28StatusofEnergyProjects75

29ForeignInvestmentintheEnergySector..77

30PowerSectorPlannedCapacityinPakistan77

31PipelineofPublic-PrivatePartnershipProjectsintheEnergySector78

32PipelineofPublic-PrivatePartnershipProjectsintheEnergySector(Hydropower)80

33TariffsSetbytheNationalElectricPowerRegulatoryAuthorityforEnergyProjectsinPakistan..85

34FinancingofPublic-PrivatePartnershipProjectsintheEnergySector86

35StatusofWaterandWastewaterProjects..86

36ForeignInvestmentintheWaterandWastewaterSector88

37FinancingofPublic-PrivatePartnershipProjectsintheWaterandWastewaterSector92

38StatusofInformationandCommunicationTechnologyProjects93

39ForeignInvestmentintheInformationandCommunicationTechnologySector94

40FinancingofPublic-PrivatePartnershipProjectsintheInformationand98

CommunicationTechnologySector

41StatusofSocialInfrastructureProjects98

42ForeignInvestmentintheSocialInfrastructureSector100

43FinancingofPublic-PrivatePartnershipProjectsintheSocialInfrastructureSector..104

44ForeignInvestmentintheOtherInfrastructureSector105

45FinancingofPublic-PrivatePartnershipProjectsintheMunicipalSolidWasteSector110

46PublicFinancialManagementProfileofPakistan'sSubnationalGovernments111

47RiskMatrixfortheVehicleInspectionandCertificationSystemProject118

A1.1Overview119

A1.2NationalPublic-PrivatePartnershipLandscape..120

A1.3Sector-SpecificPublic-PrivatePartnershipLandscape133

A1.4TypicalSector-SpecificInfrastructureIndicatorsfortheCountry136

A1.5LocalGovernmentPublic-PrivatePartnershipLandscape138

A1.6CriticalMacroeconomicandInfrastructureSectorIndicatorsfortheCountry141

A2MacroeconomicandInfrastructureSectorIndicatorsofPakistan149

A3.1PakistanBasicCountryProfile154

A3.2ScoresonDoingBusinessinPakistan,byCategoriesandSubcategories155

A4.1PublicExpenditureandFinancialAccountabilityAssessmentofPakistan's157

PublicFinancialManagementSystem,2012

A4.2BudgetaryTransfersfromtheNationalGovernmenttotheSubnationalGovernments158

Tables,Figures,andBoxvii

Figures

1Public-PrivatePartnershipProjectsFinanciallyClosedandCancelled,1990-2019..2

2StatusofPublic-PrivatePartnershipProjectsacrossSectors3

3InvestmentsinPublic-PrivatePartnershipsbySector,1990-2019..3

4VariousModesofProcuringPublic-PrivatePartnershipProjects,1990-20194

5Public-PrivatePartnershipProjectsunderPreparationandProcurement,20195

6Public-PrivatePartnershipProjectswithGovernmentSupport,1990-20196

7PaymentMechanismforPublic-PrivatePartnershipProjects,1990-20196

8ForeignSponsorParticipation,1990-20197

9Public-PrivatePartnershipLifeCycleandProcessesinPakistan19

10Public-PrivatePartnershipRoadProjectsunderPreparationandProcurement46

11ModesofProcurementforPublic-PrivatePartnershipRoads48

12Public-PrivatePartnershipRoadProjectsReachingFinancialClosure..48

13Public-PrivatePartnershipRoadProjectswithForeignSponsorParticipation49

14GovernmentSupporttoPublic-PrivatePartnershipRoadProjects49

15PaymentMechanismsforPublic-PrivatePartnershipRoadProjects50

16Public-PrivatePartnershipRailwayProjectsunderPreparationandProcurement56

17ModesofProcurementforPublic-PrivatePartnershipRailwayProjects57

18Public-PrivatePartnershipRailwayProjectsReachingFinancialClosure58

19Public-PrivatePartnershipRailwayProjectswithForeignSponsorParticipation58

20GovernmentSupporttoPublic-PrivatePartnershipRailwayProjects59

21PaymentMechanismforPublic-PrivatePartnershipRailwayProjects59

22Public-PrivatePartnershipPortProjectsunderPreparationandProcurement63

23ModesofProcurementforPublic-PrivatePartnershipPortProjects64

24Public-PrivatePartnershipPortProjectsReachingFinancialClosure..64

25Public-PrivatePartnershipPortProjectswithForeignSponsorParticipation65

26GovernmentSupporttoPublic-PrivatePartnershipPortProjects..65

27PaymentMechanismforPublic-PrivatePartnershipPortProjects66

28Public-PrivatePartnershipAirportProjectsunderPreparationandProcurement71

29ModesofProcurementforPublic-PrivatePartnershipAirportProjects72

30Public-PrivatePartnershipAirportProjectsReachingFinancialClosure72

31Public-PrivatePartnershipAirportProjectswithForeignSponsorParticipation73

32GovernmentSupporttoPublic-PrivatePartnershipAirportProjects73

viiiTables,Figures,andBox

33PaymentMechanismsforPublic-PrivatePartnershipAirportProjects74

34Public-PrivatePartnershipEnergyProjectsunderPreparationandProcurement82

35ModesofProcurementforPublic-PrivatePartnershipEnergyProjects82

36IndependentPowerProducers,Public-PrivatePartnershipEnergyProjects83

ReachingFinancialClosure

37IndependentPowerProducers,Public-PrivatePartnershipEnergyProjects83

withForeignSponsorParticipation

38GovernmentSupporttoIndependentPowerProducersandPublic-Private84

PartnershipEnergyProjects

39PaymentMechanismsforPublic-PrivatePartnershipEnergyProjects84

40Public-PrivatePartnershipWaterandWastewaterProjectsunderPreparationandProcurement...89

41ModesofProcurementforPublic-PrivatePartnershipWaterandWastewaterProjects90

42Public-PrivatePartnershipWaterandWastewaterProjectsReachingFinancialClosure90

43Public-PrivatePartnershipWaterandWastewaterProjectswithForeignSponsorParticipation....91

44GovernmentSupportforPublic-PrivatePartnershipWaterandWastewaterProjects91

45PaymentMechanismsforPublic-PrivatePartnershipWaterandWastewaterProjects92

46Public-PrivatePartnershipInformationandCommunicationTechnologyProjects95

underPreparationandProcurement

47ModesofProcurementforPublic-PrivatePartnershipInformation95

andCommunicationTechnologyProjects

48Public-PrivatePartnershipInformationandCommunicationTechnologyProjects96

ReachingFinancialClosure

49Public-PrivatePartnershipInformationandCommunicationTechnologyProjects96

withForeignSponsorParticipation

50GovernmentSupportforPublic-PrivatePartnershipInformation97

andCommunicationTechnologyProjects

51PaymentMechanismsforPublic-PrivatePartnershipInformation97

andCommunicationTechnologyProjects

52Public-PrivatePartnershipSocialInfrastructureProjectsunderPreparationandProcurement101

53ModesofProcurementforPublic-PrivatePartnershipSocialInfrastructureProjects102

54Public-PrivatePartnershipSocialInfrastructureProjectsReachingFinancialClosure102

55Public-PrivatePartnershipSocialInfrastructureProjectswithForeignSponsorParticipation103

56GovernmentSupporttoPublic-PrivatePartnershipSocialInfrastructureProjects103

57PaymentMechanismsforPublic-PrivatePartnershipSocialInfrastructureProjects104

58Public-PrivatePartnershipMunicipalSolidWasteProjectsunderPreparationandProcurement107

59ModesofProcurementforPublic-PrivatePartnershipMunicipalSolidWasteProjects107

60Public-PrivatePartnershipMunicipalSolidWasteProjectsReachingFinancialClosure108

61Public-PrivatePartnershipMunicipalSolidWasteProjectswithForeignSponsorParticipation108

Tables,Figures,andBoxix

62GovernmentSupporttoPublic-PrivatePartnershipMunicipalSolidWasteProjects109

63PaymentMechanismsforPublic-PrivatePartnershipMunicipalSolidWasteProjects109

A3.1RankingsonDoingBusinessinPakistanbyCategories,2020封..154

A3.2ScoringonDoingBusinessinPakistanbyCategories,2020封...155

Box

AssessmentofPakistan'sPublicFinancialManagementandAccountabilitySystem115

行業與管理樊源微信解

1正管卻看港列,技云與賽津會港一K駕二亙行3、上萬份行驍、菅逞及其化學W

受源免身二象：

;每日分享錄紫64份精比行研至圻：

3群友信層交流，交主先殳受伊年關行。技言.

啜港掃英或手允客亞Tearrkon：）免費技若與中銀.

（添交好友澧冬江：三名-星紅-立務銀城）

業務合絲聯裝很電:Teanton

知識星球行業與管理夷源

1天建制下我各行立行定報告、咨海公司管理方案會業運?.度、科技方案及大

理技告年

二每月更多建過20g份最于行立靈源：海貴公技、生憩、蒙苜、互聯網'房也=、

三筆和藥、醫7奧索可行軟技舌'笈茂羽態、菅遂方笑；

技去冬建于同絡.只用于群灰宇三.為名也用4HRSV1

Foreword

WearepleasedtopresentthePublic-PrivatePartnershipMonitor,adetailedreviewofthecurrentstate

ofpublic-privatepartnership(PPP)enablingenvironmentinselectedcountriesinAsiaandthePacific.

Availabilityofadequateinfrastructureisameasureofacountry'sabilitytosustainitseconomicgrowth.

ForeconomiesacrossAsiaandthePacific,provisionofbasicinfrastructureservices,includingwater,

health,energy,transportation,andcommunications,isanimportantpublicsectoractivity.Asdemand

forinfrastructurehasincreasedfasterthangovernmentbudgets,thepublicsectorhasincreasingly

consideredpartnershipwiththeprivatesectorasanalternatemodalityforfinancinginfrastructure.

TheAsianDevelopmentBank(ADB)estimatesthatAsiaandthePacificmustspend$1.7trillionayear

oninfrastructureuntil2030tomaintaingrowth,meetsocialneeds,andrespondtotheeffectsofclimate

change.Thatamountisexpectedtogoup.Thetraditionalsourcesoffinanceforinfrastructure—the

governmentsbudgetaryallocations—havenotbeenenoughtomeetthedemand.Priortothe

coronavirusdisease(COVID-19)pandemic,ADBestimatedanannualinfrastructuregapof$204billion

tobefilledthroughprivatesectorinvestment.Thatamountisalsonowexpectedtoincrease.

Fortheprivatesector,investmentininfrastructure,whetherthroughPPPsorotherwise,representsaninvestment

avenuecompetingwithvariousotherinvestmentoptionsavailable.Inordertocompete,andtocrowdinprivate

capitalintoinfrastructure,governmentsneedtoprovideaconduciveenvironmenttoadequatelyestablish

andprotecttherightsoftheprivatesector,andthenecessarysupporttoensureeveryassetbrought

tomarketprovidesreturnsthatarecommensuratewiththerisks.

ThePPPMonitorprovidestheinvestorcommunitywithbusinessintelligenceontheenabling

environment,policies,prioritysectors,anddealstofacilitateinformedinvestmentdecisions.For

ADBdevelopingmembercountries(DMCs),thePPPMonitorservesasadiagnostictooltoidentify

gapsintheirlegal,regulatory,andinstitutionalframework.ADBandotherinternationaldevelopment

agenciescanalsobenefitfromthePPPMonitorasitcouldbeusefulininitiatingdialoguestoassess

acountry'sreadinesstotapPPPsasameanstodevelopandsustainitsinfrastructure.

BuildingonthesuccessofthepreviouseditionsofthePPPMonitor,thenewPPPMonitorisnowbeing

broughtonlinetowidenitsreach.MorecountrieswillbecontinuallyaddedinthePPPMonitoranditis

expectedtobecomeaprimaryknowledgebaseforassessingacountry*sPPPenvironmentforthe

governmentandthebusinesscommunity.ThePPPMonitorfeaturesaninteractiveonlineversionwhich

allowsuserstocompareandcontrastthekeyPPPparametersandfeaturesacrosstheDMCs.The

onlineversionofthePPPMonitormaybeaccessedat.

Forewordxi

ThePPPMonitorhasbeenupgradedtoprovidea'one-stop'informationsource,derivedfromaconsolidationof

(i)thepreviousPPPMonitor;(ji)leadingPPPdatabasesofmultilateraldevelopmentbankslikethe

WorldBankandtheIFCandorganizationslikeEIU(Infrascope),andGlHub(InfraCompass);(iii)

reportsofacountry'sPPPunit;(iv)acountry'slegalframework;and(v)consultationswithleading

technicalexpertsandlegalfirmsaswellasfinancialinstitutions.

ThePPPMonitorincludesmorethan500qualitativeandquantitativeindicatorstoprofilethenational

PPPenvironment,thesector-specificPPPlandscape(foreightidentifiedinfrastructuresectors),and

thePPPlandscapeforlocalgovernmentprojects.TheCOVID-19pandemichaspushedsocial

infrastructureintotheforefrontofpolicyandplanning;hence,wherepossible,thisPPPMonitortakes

abiggerfocusonsocialandmunicipalaspectslikehealth,education,andaffordablehousing.

ThePPPmarketinmostofADBDMCsisstillatanemerging/developingstage,andcontinuousregulatoryreforms

andinstitutionalstrengtheningarerequiredtofacilitatefurtherprivatesectorinvestmentininfrastructureandtocreate

asustainablepipelineofbankableprojects.ThroughthePPPMonitor,ADBcontinuestoprovidesupportforDMCsin

addressingvariousinfrastructureandPPP-relatedchallenges,indevelopingsustainableinfrastructureprojects,and

indeliveringefficientandeffectivepublicservicesthroughPPPs.ADBalsohelpsDMCsimprovetheirinvestment

climates,formulatesoundmarketregulations,andbuildrobustlegalandinstitutionalframeworkstoencourage

privatesectorparticipationininfrastructurethroughPPPs.

WehopethatthisPPPMonitorwillpavethewayforcontinueddialoguebetweenthepublicandprivate

sectorsandstimulatetheadoptionofPPPsintheAsiaandPacificregion.

YojiMorishita

Head,OfficeofPublic-PrivatePartnerships

AsianDevelopmentBank

Acknowledgments

ThePublic-PrivatePartnershipMonitor:PakistanwaspreparedbytheAsianDevelopmentBank(ADB)

OfficeofPublic-PrivatePartnership(OPPP),inclosecoordinationwiththePakistanResidentMission.

ThisefforthasbeenledbySanjayGrover,public-privatepartnership(PPP)specialistinthePPPThematic

GroupSecretariat,whodeveloped,refined,andstreamlinedtheanalyticalframeworkforcapturingthe

national,subnational,andsectoralPPP-relatedlandscapethathasbeenutilizedinthisdocument.

YojiMorishita,headofOPPP,andSrinivasSampath,chiefofthePPPThematicGroup,have

providedhelpfulguidanceandunfailingsupportduringthedevelopmentofthisPPPMonitor.

ThePPPMonitorusesdatapublishedbythegovernmentsofADB'sdevelopingmembercountries-ontheir

officialwebsitesandinreports,publications,laws,andregulations—aswellasdatapublishedbyothermultilateral

developmentagenciesandincludedinindustrypublicationsanddatabasessuchasthoseoftheWorldBank,

OrganisationforEconomicCo-operationandDevelopment,WorldEconomicForum,InternationalMonetaryFund,

InframationGroup,IJGIobal,EconomistIntelligenceUnit(InfrascopeIndex),GlobalInfrastructureHub,

TheGlobalE,Bloomberg,S&PGlobal,TradingEconomics,andthePPPKnowledgeLab.

ADBhaspartneredwithCRISILInfrastructureAdvisoryandPanappsInc.CRISILInfrastructureAdvisory,

ledbyAbhijeetGiri,shareditsexpertiseandprovidedinputsindevelopingthePPPMonitorforPakistan,

whilePanappsInc.haspublishedthisreportonline.

RicardoMcKImon,JezreelPabiaUy,andCarmeliaGodoyhaveverycapablyledthemanagementand

coordinationwiththenumerouscontributorstothisreport.ThecontributionsandreviewbyMohammedAzim

Hashimi,SheharyarChughtaifromOPPP,andbythePakistanResidentMission,ledbySanaMasood,

SalmanM.Mian,ZainabHamid,andZayedMaudwereinstrumentalinthequalitycontrolofthisdocument.

Severalothersprovidedhelpandsupport—CyrelSanGabrieleditedthereport,AsiatypeInc.

performedthetypesetting,JoyQuitazol-Gonzalezproofreadthepageproofs,andClaudetteRodrigo

designedthecover.April-MarieGallegaandAyunSundarioftheKnowledgeSupportDivisionof

ADB'sDepartmentofCommunicationsprovidedguidanceandassistanceinthepublicationprocess.

DefinitionofTerms

TermDefinition

Public-privateContractualarrangementbetweenpublic(national,state,provincial,orlocal)andprivateentities

partnershipthroughwhichtheskills,assets,and/orfinancialresourcesofeachofthepublicandprivatesectorsare

(BP)allocatedinacomplementarymanner,therebysharingtherisksandrewards,toseektoprovideoptimal

servicedeliveryandgoodvaluetocitizens.InaPPP,thepublicsectorretainstheultimateresponsibilityfor

servicedelivery,althoughtheprivatesectorprovidestheserviceforanextendedtime.

WithinAsianDevelopmentBankoperations,allcontractssuchasperformance-basedcontracts

(managementandservicecontracts),lease-operate-transfer,build-own-operate-transfer,design-

build-finance-operate,variants,andconcessionsareconsideredasvariousformsofPPP.

Excludedare

?contractsinvolvingturnkeydesignandconstructionaspartofpublicprocurement

(engineering,procurement,andconstructioncontracts);

?simpleservicecontractsthatarenotlinkedtoperformancestandards(thosethatare

morealignedwithoutsourcingtoprivatecontractorstafftooperatepublicassets);

?constructioncontractswithextendedwarrantiesand/ormaintenanceprovisionsof,for

example,upto5yearspostcompletion(whereinperformancerisk-sharingisminimalas

theassetsarenewandneedonlybasicmaintenance);and

?allprivatizationanddivestures.

AffermageorleaseUnderaleasecontract,theprivatesectordeveloperisrespons