Public Private Partnership

Public Private Partnership (PPP)

Public Private Partnership (PPP) is a long-term contractual arrangement between a government/public body and a private party for the design, financing, construction, operation and/or maintenance of public infrastructure or delivery of public services. In this arrangement, the private party takes on significant risk and management responsibility, and its return is linked to performance, while ownership or ultimate responsibility for the service remains with the public sector. It is used when public funds or capacity are insufficient, and when private efficiency, technology and finance can deliver better value for money. Common PPP models include BOT (Build–Operate–Transfer), BOOT, BOT–Annuity, DBFO (Design–Build–Finance–Operate), management contract, lease, and concession. In Nepal, PPP is guided by the Public Private Partnership and Investment Act, 2075 (2019) and the PPP Policy, 2076 (2019), with the Investment Board Nepal and line ministries acting as implementing agencies.

Potential sectors in Nepal for PPP projects

1. Hydropower and energy — storage and run-of-river hydropower projects, transmission lines, substations, and cross-border power trade infrastructure.
2. Transport infrastructure — national highways, expressways (e.g., Kathmandu–Terai Expressway), bridges, tunnels, bus terminals and parking complexes.
3. Airports and aviation — construction, upgrading and operation of airports (e.g., Nijgadh International Airport, Pokhara and Gautam Buddha Airport terminals).
4. Urban infrastructure and services — water supply and sewerage, solid waste management, urban roads, street lighting and mass rapid transit.
5. Health and education — hospitals, medical colleges, diagnostic centres, schools and university infrastructure on a DBFO/annuity basis.
6. Tourism and hospitality — hotels, resorts, cable cars, cable-car-based transport, cable car and ropeway projects, and tourism complexes.
7. Industrial and economic zones — special economic zones, industrial estates, dry ports, inland container depots and logistics parks.
8. Information and communication technology — national broadband backbone, data centres and e-governance service delivery.
9. Agriculture and irrigation — large irrigation systems, cold storage, market yards and agro-processing infrastructure.
10. Sports and recreation — stadiums, sports complexes and convention centres.

Thus PPP is a risk-sharing, performance-based partnership that can mobilise private finance and efficiency, and Nepal has wide scope for it in energy, transport, urban, social and tourism sectors.