Pakistan : Supporting Public–Private Partnership Investments in Sindh Province

Sovereign Project | 46538-002

The project will support the development policies of GoS for sustainable infrastructure provision through PPPs. It is aligned with Midterm Review of Strategy 2020, in which PPPs are a key driver of change, and the Country Partnership Strategy 2015-2019. The project builds on ADBs partnership with GoS to develop the PPP framework under a program cluster in 2009, using lessons learned from this program and the Country Assistance Program Evaluation for Pakistan.

The expected impact of the project is aligned with the number of infrastructure investments and services in Sindh improved. The expected outcome is fiscally-responsible private sector participation and investment in infrastructure increased in Sindh.

Project Details

  • Project Officer
    Mian, Salman Moeed
    Sectors Group
    Request for information
  • Country/Economy
    Pakistan
  • Modality
  • Sector
    • Public sector management
Project Name
Supporting Public–Private Partnership Investments in Sindh Province
Project Number
46538-002
Country / Economy
  • Pakistan
Project Status
Active
Project Type / Modality of Assistance
  • Grant
  • Loan
  • Technical Assistance
Source of Funding / Amount
Grant 0518-PAK: Supporting Public-Private Partnership Investments in Sindh Province
Source Amount
Department for International Development US$ 19.23 million
Loan 3469-PAK: Supporting Public-Private Partnership Investments in Sindh Province
Source Amount
Ordinary capital resources US$ 100.00 million
TA 9239-PAK: Enhancing Public"Private Partnerships in Pakistan (Provincial Support)
Source Amount
Government of the United Kingdom US$ 4.75 million
Strategic Agendas
  • Inclusive economic growth
Drivers of Change
  • Governance and capacity development
  • Partnerships
Sector / Subsector
  • Energy / Energy sector development and institutional reform

  • Public sector management / Public administration - Public expenditure and fiscal management

  • Transport / Transport policies and institutional development

Gender
No gender elements
Description

The project will support the development policies of GoS for sustainable infrastructure provision through PPPs. It is aligned with Midterm Review of Strategy 2020, in which PPPs are a key driver of change, and the Country Partnership Strategy 2015-2019. The project builds on ADBs partnership with GoS to develop the PPP framework under a program cluster in 2009, using lessons learned from this program and the Country Assistance Program Evaluation for Pakistan.

The expected impact of the project is aligned with the number of infrastructure investments and services in Sindh improved. The expected outcome is fiscally-responsible private sector participation and investment in infrastructure increased in Sindh.

The outputs are (i) GoS capacity to select and develop PPP projects strengthened; (ii) PPP project-related fiscal risk effectively managed by the PPP Support Facility (PSF); and (iii) PPP project selection and subsequent management capacity of line departments, finance, and planning and development departments strengthened.

Project Rationale and Linkage to Country/Regional Strategy

With 44 million inhabitants representing 23% of Pakistan's population and a GDP share of 32%, Sindh has large infrastructure and social service needs, which exceed the provincial public resources available. With limited sources of revenue, federal transfers constituted 79% of Sindh's budget in 2016. Only PRs 225 billion or 25% of Sindh's annual budget was allocated to the Annual Development Plan (ADP) in FY2017, which funds infrastructure development among other initiatives. The World Bank estimates that Sindh's annual infrastructure investments only represent 3% to 4% of estimated requirements in transport, electricity, water supply and sanitation, solid waste, telecom, and irrigation. In addition Sindh requires investments in health, and education This also highlights GoS inability to fully utilize the development budget for meeting its infrastructure needs under the traditional public procurement mechanism. To meet the pressing needs of infrastructure in the province, public sector investments must be augmented by stronger private sector participation. In addition to bridging the funding gap for infrastructure investments, PPPs may also help in accelerating completion and enhancing the efficiency of operations of infrastructure projects. However, PPPs also carry significant fiscal risks that need to be managed and mitigated.

To close the significant infrastructure demand supply gap in the context of extremely limited fiscal resources, GoS began reforms to facilitate the use of PPP investments by promulgating the Sindh PPP Act 2010, as well as legal guidelines and procurement rules, institutional arrangements for PPPs and providing public resources through its financing. A PPP Policy Board, led by the Chief Minister, was established to approve PPPs. A PPP Unit within the Sindh Finance Department (SFD) helps relevant government departments to identify and develop suitable PPP projects within Sindh's ADP. A project development facility (PDF) and a viability gap fund (VGF) were established in 2010 to support the use of transaction advisory services and fund the public financing portion of PPPs. So far Sindh has funded five (5) PPP investments that commenced operation in 2013-2015. Sindh has so far identified a pipeline of projects, of which 36 have passed concept approval, with an estimated cost of PRs 240 billion.

However, the experience of the first years demonstrates that considerable efforts are required to improve the leverage of public financing through private capital and adjust financing policies and modalities to reach that objective and minimize fiscal risks related to PPPs. As PPP investments and contingent liabilities grow, it is essential to better prioritize project selection followed by proper structuring to minimize fiscal risks. As a first step PPP project identification should be reflected in Sindh's ADP and carefully consider project revenue generation and identify potential risks and its mitigation.

The structure of Sindh's PPPs must be significantly improved through: (i) robust policy that guides the selection of eligible viable PPP projects (including the treatment of non-solicited proposals) based on Sindh's ADPs; (ii) equitable risk participation from investors and lenders; (iii) rigorous risk management policies and supporting systems that entail project and related fiscal risks; and (iv) sound policies that guide the proper use of public funding through the VGF and otherwise.

Impact

Infrastructure investments and services in Sindh improved

Project Outcome

Description of Outcome

Fiscally-responsible private sector participation and investment in infrastructure increased in Sindh.

Progress Toward Outcome
--

Implementation Progress

Description of Project Outputs

Government of Sindh capacity to select and develop PPP projects strengthened

PPP project-related fiscal risk effectively managed by PSF

PPP project selection and subsequent management capacity of line departments, finance, and planning and development departments strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)

Output 1:

Project selection criteria (PSC) are in place for PDF funding which is currently used by PPP Nodes. ADB has provided a revamped and improved PSC template and the revised PSC is now uploaded on the PPP unit's website. The Finance Department has mobilised a Project Management Unit which would ensure that the revised PSC format is being used.

Training:

* The first round of training on project selection for PPP nodes was completed in 2019.

* Two rounds of the APMG PPP certification training have also been conducted in 2019 and 2021.

* Workshop on ADB safeguard requirements for the PPP nodes in line departments have also been conducted.

The training was attended by individuals from the departments &PPP Node of Education, W&S, Health, Transport, P&D, Agriculture, Energy, IT, Energy, Social Welfare and Local Gov. The PSF will continue organizing training for relevant staff of PPP Unit, PSF and PPP Nodes.

Output 2:

The PSF has been established and the PDF and VGF guidelines have been developed and approved.

Risk management measures are being applied by PSF for eligible projects.

The Financial Management Manual of PSF has been approved by Board in Oct 2021.

Output 3:

All PPP project proposals now contain standardized selection criteria.

TA consultants mobilized to support PPP nodes (education, works & services, transport) in project selection, project development, and project & contract management.

Geographical Location
Sindh

Safeguard Categories

Environment
FI
Involuntary Resettlement
FI
Indigenous Peoples
FI-C

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
GoS Finance Department, Planning and Development Department, sector departments with PPP portfolios, commercial banks and other private sector entities are the main stakeholders. The project incorporates the findings of and agreements reached during extensive consultations with the stakeholders.
During Project Implementation
The consultative process will continue during the project implementation. The project will use and build on the tested consultative approach that was previously and successfully implemented for PPPs in Sindh, including the use of resources from the attached technical assistance to engage in consultations with stakeholders.

Business Opportunities

Consulting Services
The TA requires 20 person-months of international and 590 person-months of national consulting services for technical, advisory, and capacity development support through short-term and full-time engagement with the project counterparts and stakeholders.

Contact

Responsible ADB Officer
Mian, Salman Moeed
Responsible ADB Department
Sectors Group
Responsible ADB Division
Finance Sector Office (SG-FIN)
Executing Agencies
Finance Department,GOS

Timetable

Concept Clearance
25 Jun 2014
Fact Finding
06 Nov 2014 to 18 Nov 2014
MRM
17 Jul 2015
Approval
24 Nov 2016
Last Review Mission
-
Last PDS Update
02 Feb 2022

Funding

Grant 0518-PAK

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Nov 2016 12 Sep 2017 31 Mar 2018 31 Dec 2022 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 19.23
ADB 0.00
Counterpart 0.00
Cofinancing 19.23
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 12.23 79%
Cumulative Disbursements 06 Jun 2024 0.00 15.43 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

Loan 3469-PAK

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Nov 2016 12 Sep 2017 31 Mar 2018 31 Dec 2022 31 Dec 2024 -
Financing Plan
  Total (Amount in US$ million)
Project Cost 165.00
ADB 100.00
Counterpart 65.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 9.28 0.00 13%
Cumulative Disbursements 06 Jun 2024 12.22 0.00 17%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

TA 9239-PAK

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Nov 2016 20 Dec 2016 20 Dec 2016 30 Jun 2022 31 Dec 2022 03 May 2023
Financing Plan/TA Utilization
ADB Cofinancing Counterpart Total
Gov Beneficiaries Project Sponsor Others
0.00 4,750,530.00 0.00 0.00 0.00 0.00 4,750,530.00
Cumulative Disbursements
Date Amount
06 Jun 2024 2,406,784.09
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - Satisfactory - Satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Supporting Public-Private Partnership Investments in Sindh Province: Audited Project Financial Statement (July 2021-June 2022) Audited Project Financial Statements Dec 2022
Supporting Public-Private Partnership Investments in Sindh Province: Audited Project Financial Statement (July 2020-June 2021) Audited Project Financial Statements Dec 2021
Supporting Public-Private Partnership Investments in Sindh Province: Audited Project Financial Statement (July 2018-June 2020) Audited Project Financial Statements Dec 2020
Supporting Public-Private Partnership Investments in Sindh Province: Updated Project Administration Manual Project/Program Administration Manual Oct 2019
Loan Agreement for Loan 3469-PAK: Supporting Public-Private Partnership Investments in Sindh Province Agreements Sep 2017
Project Agreement for Loan 3469 and Grant 0518-PAK: Supporting Public-Private Partnership Investments in Sindh Province Agreements Sep 2017
Grant Agreement (Externally Financed) for Grant 0518-PAK: Supporting Public-Private Partnership Investments in Sindh Province Grant Agreement Sep 2017
صوبہ سندھ میں سرکاری و نجی شراکت داری کے لیے معاونت Translated PDS Mar 2017
Supporting Public-Private Partnership Investments in Sindh Province: Project Administration Manual Project/Program Administration Manual Nov 2016
Supporting Public-Private Partnership Investments in Sindh Province: Report and Recommendation of the President Reports and Recommendations of the President Nov 2016
Enhancing PPPs in Pakistan (Provincial Support) Initial Poverty and Social Analysis Jun 2014

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

  • 28 Nov 2016 | News Release

    ADB Supports PPP Development to Improve Infrastructure in Sindh

    ADB has approved a $100 million loan to strengthen the standards in the development and delivery of public-private partnership (PPP) projects and help bridge the infrastructure investment gap in Sindh province, South of Pakistan.

Tenders

Tender Title Type Status Posting Date Deadline
PPP Specialist (PSF) Individual - Consulting Closed
Environmental Safeguards Specialist (1) Individual - Consulting Closed
Environmental Safeguards Specialist (2) Individual - Consulting Closed
Land Acquisition and Relocation Plan (LARP) Specialist Individual - Consulting Closed
PPP Specialist (Education) Individual - Consulting Closed
PPP Specialist (Legal) (01) Individual - Consulting Closed
PPP Specialist (Finance Associate 2) Individual - Consulting Closed
PPP Specialist (Finance Associate 4) Individual - Consulting Closed
PPP Specialist (Finance Specialist) Individual - Consulting Closed
PPP Specialist (Legal) (02) Individual - Consulting Closed
PPP Specialist (Finance Associate 3) Individual - Consulting Closed
PPP Specialist (Finance Associate- Works&Services) Individual - Consulting Closed
PPP Specialist (Finance Associate 1) Individual - Consulting Closed
PPP Specialist (Finance Associate- Education) Individual - Consulting Closed
PPP Specialist (PSF) Individual - Consulting Closed
Environment Specialist Individual - Consulting Closed
PPP Specialist (legal) Individual - Consulting Closed
PPP Specialist (PMU) Individual - Consulting Closed
Social Safeguards Specialist - 2 Individual - Consulting Closed
Senior Monitoring and Evaluation Specialist Individual - Consulting Closed
Financial Modelling Specialist Individual - Consulting Closed
PPP Specialist Individual - Consulting Closed
PPP Specialist (legal) Individual - Consulting Closed
Financial Management Specialist Individual - Consulting Closed
PPP Specialist Individual - Consulting Closed
National Environment Specialist 2 Individual - Consulting Closed
Tax and Accounting Specialist Individual - Consulting Closed
Water Specialist Individual - Consulting Closed
Water Utility PPP Specialist Individual - Consulting Closed
PPP Specialist (Legal Expert - Health) Individual - Consulting Closed
PPP Specialist (Health Expert) Individual - Consulting Closed
PPP Specialist (Health and Finance) Individual - Consulting Closed
PPP Specialist (Works & Services Node) Individual - Consulting Closed
National PPP Specialist Individual - Consulting Closed
National Senior Monitoring and Evaluation Specialist Individual - Consulting Closed
National PPP Analyst Individual - Consulting Closed
PPP Specialist (Finance Specialist, PMU) Individual - Consulting Closed
National PPP Specialist (Project and Infrastructure Management) Individual - Consulting Closed
National PPP Specialist (Finance Specialist - Works & Services node) Individual - Consulting Closed
National PPP Specialist 3 Individual - Consulting Closed
National Senior Monitoring and Evaluation Specialist 2 Individual - Consulting Closed
National PPP Specialist 8 (water infrastructure sector) Individual - Consulting Closed
National PPP Specialist 7 Individual - Consulting Closed
National PPP Specialist 6 Individual - Consulting Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Capacity Development Technical Assistance 9239 06 Nov 2019 Norton Rose Fulbright (Asia) LLP (SINGAPORE) | One Raffles Quay, North Tower, 34-02, 04 pore Singapore Finance Department,GOS 378,460.00

Procurement Plan

None currently available.