DUSHANBE, February 21, 2012, Asia-Plus  -- Representatives from International Finance Corporation (IFC) and journalists met in Dushanbe on February 20 to discuss the main principles of a draft law on public-private partnership (PPP) in Tajikistan.

The meeting participants also discussed approaches to introduction of the public-private partnership in Tajikistan and issues related to attraction of foreign investments.

IFC expert Peter Keil, in particular, noted that the main objective of the PPP law is in promoting combination of assets of the public sector with finance and resources that are available to the private sector.

“The government owns lands and is authorized to provide these lands,” said Mr. Keil.  “On the other hand, the public sector has access to funds and technical opportunities.  The sides conclude contract, and thereby, the government ensures the erection of necessary facilities.”

He stressed that the whole point was that in Tajikistan like other countries of the world, there were projects that could not be implemented by the government alone.

The PPP project gives the country an opportunity to implement the most significant social and infrastructure plans through the combination.  “All over the world the governments are struggling for attraction of resources for financing of the necessary infrastructure facilities – new airports, roads, schools, hospitals, etc.,” noted the IFC expert.  “Tajikistan is able to develop considerable resources for service of the whole population of the country.”

According to the State Committee for Investments and State-owned Property Management (GosKoInvest), the PPP draft law worked out by the ministries and organizations in partnership with the private sector and IFC will be submitted for consideration to the government next month.

Public-private partnership (PPP) describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies.

PPP involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project.  In some types of PPP, the cost of using the service is borne exclusively by the users of the service and not by the taxpayer.  In other types (notably the private finance initiative), capital investment is made by the private sector on the strength of a contract with government to provide agreed services and the cost of providing the service is borne wholly or in part by the government.  Government contributions to a PPP may also be in kind (notably the transfer of existing assets).  In projects that are aimed at creating public goods like in the infrastructure sector, the government may provide a capital subsidy in the form of a one-time grant, so as to make it more attractive to the private investors. In some other cases, the government may support the project by providing revenue subsidies, including tax breaks or by providing guaranteed annual revenues for a fixed period.

In Tajikistan, the Pamir Energy Company (PamirEnergy) Project is a model of collaboration between private and public partners, between IFC and IDA and between the World Bank Group and donors, and its example can be successfully followed in other difficult regions of the developing world.