The concept of Public Private Partnership (PPP) is based on the belief that the government, private sector, general public and the people of the affected areas can participate in large public needs and infrastructural projects by combining capital collection and competent management to maximize the use of resources and achieve high returns.

Developed countries have been implementing this concept for decades with the intention of reducing the risk of the project and completing the construction on time, reducing the burden on public funds and providing access to the capital, management and technology of the private sector. had brought This concept, which is not only financial participation, but also services provided by the government to the citizens, infrastructure development, job creation and economic growth, has been introduced with the government's approval. could not be successful. Rich countries had to bear the responsibility from the state treasury. The amount of success in big projects that have to bear long-term obligations beyond the capacity of less developed countries is very low. 

Large infrastructure inherently requires large financial resources and its management, disputes between participants starting with participation, interference during implementation, opacity in contracting systems and financial risk-bearing The system has become the main reason for project failure. Since there is a difference of opinion and 'conflict of interest' between the public sector and the private sector from the project construction stage, the project fails before completion. Dreams are shared in big projects but the actual ground reality is different. 

PPP failures include low economic growth under overall weak economic conditions, sluggish trade conditions, widening financial imbalances, weak currency (exchange rates) and rising public debt. In the context of Nepal, these indicators are not positive. Political stability and accountability under good governance, corruption situation, investment climate and bureaucracy are also not positive for success. Also there is participation, private sector activism, transparency of project implementation methods and uncertainty of resources. In the context of

Nepal, the objective and indicative aspects of these elements are not in favor and the experience is also bitter. Therefore, PPP is not a happy situation. Chanting PPP to waste time and delay service delivery to citizens is a failure to focus on maximum utilization of public resources. Jumping into the 'modality' without making a plan with options to avoid the case of the private sector withdrawing from the project in a complex matter like PPP, which has eternal financial obligations, will be a game on the state's finances. 

Some big failed projects

Even in developed countries there are many examples of big public private partnership projects failing. The famous Berlin Brandenburg Airport, which has significantly increased costs and took a long time, was completed in 2011 with a cost of 2 billion Euros, and the cost of the PPP project reached 7.3 billion Euros and was put into operation only in 2020. The PPP project was criticized for cost overruns, opaque decision-making processes and managerial weaknesses.

The failure of the Sydney Light Rail PPP project has been attributed to mistrust between planning and construction participants, conflicts of interest, non-participation of stakeholders and lack of attention to risk assessment. The Indiana Toll Road Consortium, which was privatized in 2006 and leased for 75 years, had to declare bankruptcy in 2014 due to financial difficulties. 

The railway project launched by Thailand, showing an extremely ambitious project, could not bear the weight of exchange rate changes. Similarly, the Kuala Lumpur light rail project failed because it could not withstand high inflationary growth during the Asian financial crisis. Bridge in San Francisco, USA, Metrorail in London, Tower of Pisa in Italy, Muscat Power Plant in Canada, Thermal Plant in Gujarat, India, Tala Hydroelectric Transmission in Bhutan, Offshore Gas Plant in Spain, Hospital in Lesotho, Manila in the Philippines Water supply, Melamchi water supply in Nepal is among the failed projects. 

In Gujarat, India, in 2006, Tata Company was given the opportunity to build a thermal plant with a capacity of 4,000 MW under the Built, Operate, Own (BOO) model. Out of the total cost of USD 4 billion, USD 600 million of equity shares of the Tata Group, USD 1.8 billion in external debt (World Bank, Asian Development Bank and IFC) and USD 800 million in domestic debt are arranged. was done The government provided various facilities and concessions. After the losses of the project reached INR 65 billion equivalent to the paid-up share capital, the Tata Group proposed to sell 51 percent stake to the government for INR 1. Its purpose was to shift the responsibility to the government. 

Looking at the status of failed projects in PPPs around the world, 55 percent of canceled PPP projects are from developing Asian countries. 42 percent of the failed PPP projects are in the transport sector, 23 percent in the energy sector and 19 percent in the water sector. 

Nepal's failed outcome

The concept of public private partnership (PPP), promoted in the hope that the capital and skills of the private sector can be used in the public sector, has failed. Ignoring the failed results of privatization for the past 3 decades, the PPP concept, which has failed in less developed countries, has been brought forward again in Nepal. Access to quality and accessible public services for citizens, neglecting the sustainable basis of environmental protection, and carrying the idea of ​​'responsibility of the government, profit of private managers', which cannot be reversed tomorrow, is a mistake. will be. 

Jumping into hydropower projects in PPP model without assessing the impact of increasing natural disasters and climate change and the risks caused by it is a misuse of scarce resources. The participation of multilateral development organizations should be ensured as only bilateral involvement may lead to more complications in the use of water resources of Nepal's strategic importance, with or without obstacles.

The fact that the public property is integrated and kept in the bank's term account and shows profit by earning interest has been revealed by the organizations that are open in the development of our water resources sector. The companies are keeping the government resources captive without working as per the purpose. No attention has been paid to its consequences. 

Due to potential risks, managerial incompetence, selfishness and lack of transparency, the managerial aspect of Nepal's PPP project is currently in a state of flux, and the government side has become weak and has not been able to protect public interests and resources. 

Nepal Metal Company

71.31 percent of the Government of Nepal in the year 2033, 13.50 percent of the Mutual Trading Company Pvt. percent, Nepal Metal Company was established by owning 13.08 percent of Chaiyun Minerals Pvt.

In the total share capital of 17.83 crore rupees, the government's share is 12.72 crore rupees and the government's debt (interest) has been invested in a total of 24.48 crore rupees. It appears that a loan of Rs.17 lakhs was received from other shareholders. Legally the company is alive. The company, which was established 49 years ago on a public-private concept, spent 41 crores on road construction and spent 16.72 crores on the under-construction tunnel, and is in a state of closure as the construction could not be completed. 

Electricity Production Company Limited

The share capital of this company was established in the year 2073 with the aim of developing, constructing and operating hydropower projects under the concept of public private partnership. Rupees have been fully invested, but only 1.29 billion rupees have been invested due to the commitment of investing 4.29 billion rupees from other 6 government-owned institutions. 2 billion 81 crore rupees have not been invested. 

The amount received from the government should be used for the development, construction and operation of hydroelectricity as per the purpose, 1.8 billion rupees should be invested in other electricity companies and 2.26 billion rupees should be kept in fixed deposits and 21 million rupees in bank deposits. Showing an interest income of Rs 13.5 crores and showing a profit after income tax of Rs 5.60 crores.

Even though the company has been established for 9 years, it is not justified in any way to keep the money received from the government in fixed deposit without working according to the purpose. There is no justification for other shareholder organizations other than the government to invest more in this situation. PPP should not be made as a means of hindering the proper utilization of public funds by giving a public private partnership. 

Center for National Productivity and Economic Development

The total liability of this company is 10.85 crore rupees, including government debt of 9.30 crore rupees, the loss of this company has reached 11.26 crore rupees. There is no reason to continue running the company by receiving subsidies from the government for operating expenses. 

Power Trading Company

The company established in 2073 with the purpose of buying and selling electricity from domestic and foreign producers does not seem to be doing commercial work. Continuation of the company is not necessary if justification is not established. 

Hydro Electricity Investment and Development Company Limited (HIDCL) was established in the year 2069 with shares owned by the government, government organizations and the general public. Since the share capital of this company is 22.87 billion rupees and profit is 26.59 billion rupees, it has earned interest income of 2.09 billion rupees by keeping periodic deposits and other balances of 15.52 billion rupees in the bank. A company established 13 years ago for the purpose of generating, transmitting and distributing electricity, 78 percent of which is owned by the government and government organizations and 22 percent by the general public. A unique example of usage is This is a distortion of the Public Private Partnership concept. 

Kathmandu Valley Water Supply Limited

The share capital of this company established in 2063 is 30 percent of the government, 50 percent of the local level, 15 percent of the private sector and 5 percent of the employee welfare fund. Only crores of rupees. Despite getting 40-45 crore subsidy from the government, the debt and other liabilities have reached 2.67 billion rupees. How will the outstanding debt of 156 billion rupees be paid in a situation where the total accumulated loss of previous years has reached 2.67 billion rupees? The obligation to repay the sovereign debt rests with the state. The retirement liability of the employees is 1.15 billion rupees, but only 60 million rupees have been arranged. 

At the end

The experience of Nepal and other countries has made it clear that the illusion that the PPP project will be completed on time, completed within the estimated budget, service quality and transparency is false. Therefore, it is not advisable to proceed without an objective evaluation of the project before implementation. Due to the failure to pay attention to the communities, residents and natural disasters in the upstream and downstream of the river project area, the benefits obtained from the project will be shared unevenly, but the cost will have to be borne by the state and local communities.

It is not enough to simply add up the costs to complete the construction and operation of large projects. The project should also cover the impact on people's livelihood, displacement costs, and environmental damage. Legally or practically, the government should not have unlimited liability in case of project failure. 

Transparency is essential at every stage of PPP. When there is a weak government, pressure from private sector increases the imbalance and project returns are negative or low. If there is a loss, the government will be involved. If the project is complex, regular monitoring by the government and civil society is mandatory. Construction and operation of large energy projects should not be solely dependent on the private sector.

The private sector is not sufficient in projects with security, strategic importance, environmental damage and long-term negative impacts of climate change and strategic interests. Since the security system of such projects is directly connected with the government, the fact that the national security is not devalued based only on capital investment is evident from the situation of the "Indus River" in the recent armed conflict between India and Pakistan. done. 

There is a situation where the government is unable to meet the operating expenses of the PPP project, which has been operating with less equity shares and more debt than expected, and the government has to spend even more due to not being able to pay the debt. The government should clearly understand that education, health and social security are the responsibility of the government. If the private sector seeks participation in these matters, it should be limited to donations, not ownership.  The government is a heavy burden on the future responsibilities in the future responsible for future responsibility to prevent the stories of story-brack project project. Inactive in the activism of the middle of the government and the economic importance of the agreement is not successful in the private sector as the private sector, as much as the private sector in the private sector and its liability in the private sector. & Nbsp;