CILT hosts L.S. De Silva memorial lecture on transport, logistics and PPP
The Chartered Institute of Logistics and Transport (CILT) Sri Lanka organised the L.S. De Silva memorial lecture on November 8, 2018, at the Institution of Engineers Sri Lanka, Wijerama Mawatha, Colombo 07.
The lecture was titled ‘Transport and Logistics: The need for Publicprivate-partnership Framework and Cooperation’ and was delivered by Thilan Wijesinghe, Chairman National Agency for Public Private Partnerships, attached to the Ministry of Finance.
Welcoming the gathering, CILT Sri Lanka Chairperson Gayani de Alwis mentioned how the late Eng. L.S. De Silva started the linkage with then CIT in UK as a corresponding member and later as the founding chairman of CILT Sri Lanka in 1984 and appreciated his yeoman service rendered to CILT.
CILT Sri Lanka Secretary Dr. Lalith Edirisinghe spoke about late Eng. L.S. De Silva’s contribution to CILT. Prior to commencement of the memorial lecture, the family members of the late Eng. De Silva garlanded his photo.
The talk was followed by a moderated Q&A session. Judging by the questions raised by the participants, it showed that the speaker has really opened up their thinking on this topic. The Q&A session was moderated by CILT Sri Lanka council member Ibrahim Saleem.
Wijesinghe’s presentation was full of insightful information and empirical evidence to support the subject topic. He stated that while UNCTAD rate Sri Lanka as 15th best connected in the world for port related activities, we seem to have a comparatively uncompetitive and inefficient logistics environment, as can be seen from the Logistics Performance Indicator (LPI) ranking comparison:
Sri Lanka also appears to have much to be desired in its ‘Ease of doing business’ indicators:
Overall Ease of Doing Business, Sri Lanka ranks 110, ahead of South Asia, but is well behind East Asia, UAE and Mauritius.
Sri Lanka ranked 158th out of 181 under ‘Paying Taxes’ and had 47 types of taxes compared to nine in China and Malaysia.
Sri Lanka ranks poorly at 163 (behind Bhutan, Maldives, Nepal and Pakistan) on time taken to enforce a contract through Courts
(over 1,200 days).
Sri Lanka’s Fiscal balance position ranks at the 143rd position out of 193 countries. Wijesinghe defined PPP as a special contractual arrangement between a public sector Ministry, corporation or authority and a private company for providing a public infrastructure asset or service, in which there is an appropriate transfer of risk to the private party and where the private party bears investment and management responsibility on a long-term basis.
In a PPP, the private partner is typically tasked with the design, construction, financing, operation and management of a capital asset to deliver a service to the government or directly to private end users. The private partner will receive either a stream of payments from the government or through charges levied directly on the private end users, or both, for its efforts in undertaking the investment and risks associated with such investment.
What is not a PPP?
Is any project where the GOSL provides a direct sovereign guarantee to the lending institution of the private partner’s debt?
The GOSL or any of its institutions finances by itself (either through public funds, loans, grants, gifts, donations, contributions or similar receipts) the procurement of a good or service. Outright sale of the freehold title or long-term lease of any GOSL asset on CV’S valuation. Projects where the GOSL retains whole-of-life asset risk. In a PPP, whole-of-life asset risk is retained
with the private partner. Projects where there are no ongoing post construction performance standards to be met by the private partner.
Why is a central agency for PPPS necessary?
The third source of financial resources to stimulate capital formation.
Project risk assessment and the equitable allocation of risk between the public entity and the private entity is a responsibility of the NAPPP. Oversight of the Ministry of Finance is essential to ensure fiscal cost and fiscal risk and recourse to the to the national capital budget if any is optimised.
Line Ministries and private sector
requires single facilitation point. Tapping into Technical Assistance
funds for feasibility studies and more. Tapping into Viability Gap Funding.
Ongoing Transport and logistics sector PPPS
Light Rail Transit (LRTS) Elevated highway from NKB to
Rajagiriya and Athurugiriya Domestic airline service Special Economic Zones (Hambantota and Colombo) Transit smart card Megapolis projects
Inland water transport
Port City projects
Tech, Aero, Maritime cities