Bigger role for private sector in Govt.'s building projects

Cabinet approves two-pronged programme, Govt. funds to be used for education, health

The private sector will be invited to construct buildings for state agencies under a two- pronged programme approved by the Cabinet.

Under one programme, land for such construction will be provided by the Line Ministry or State Agency. Investors will be paid lease fees but will be required to turn over such property to the state within 15 to 30 years.

Under the second programme, where land and buildings are privately owned, the relevant Line Ministry or State Agency would be provided the right of use for a concession period.

The National Policies and Economic Affairs Ministry in a circular has said that the state institutions should send in proposals for consideration to the Public Investment Committee (PIC) which will recommend whether such projects should be financed via the private sector or whether they should qualify for other sources of funding.

Under both programmes, new buildings are constructed according to required specifications of the Line Ministry/ Government Agency concerned and the Government will provide the annuity payments on a guaranteed basis during the concession period on mutually acceptable terms to provide required comfort to the private sector investors and their bankers, according to the circular.

According to the circular issued to Ministry Secretaries, Provincial Councils and government departments, the programme's objective is to save public funds for social projects, including the development of schools and hospitals.

The circular says these funds could be utilised for advanced educational projects and to improve laboratory facilities, health services, rural infrastructural development, and technical and vocational education among others.