The chapter covers various aspects of public private partnerships in Pakistan (PPPs), including the regulatory framework, procurement process, risk allocation, financing, dispute resolution, and recent trends.
PPPs have emerged as an important tool for infrastructure development in Pakistan. The country has a long history of engaging the private sector, with early PPP projects dating back to the 1990s, such as the Hub Power Plant and Lahore-Islamabad Motorway. Over the past two decades, the PPP landscape has evolved considerably through legislative reforms and practical experience.
Federal and provincial laws provide the legal framework for PPPs in Pakistan. The Public Private Partnership Act 2017 is the federal law governing PPP projects at the national level. In addition, the provinces of Punjab (Punjab Public Private Partnership Act 2019), Sindh (Sindh Public Private Partnership Act 2010), Khyber Pakhtunkhwa (Khyber Pakhtunkhwa Public Private Partnership Act 2014) and Balochistan (Balochistan Public Private Partnership Act 2021) have enacted their own PPP laws to regulate provincial projects. Sector-specific laws are also applicable for PPPs in areas like highways, aviation, telecoms etc.
Common PPP structures used in Pakistan include Build-Operate-Transfer (BOT), Build-Own-Operate-Transfer (BOOT) and Design-Build-Operate (DBO). The private partner is selected through a two-stage competitive bidding process, with criteria focused on technical capacity and financial viability. Unsolicited proposals are permitted subject to certain conditions.
The transport and energy sectors have seen the most PPP activity, with projects like Thar Coal Power Plant and Lahore Metro Bus System. More recent expansions are happening in education (e.g. PIMS medical college), technology (National Science & Technology Park), and waste management (Lahore Waste Management Company).
PPPs have become an important tool for infrastructure development in Pakistan, with the government actively promoting PPPs in different sectors. The success of PPPs in Pakistan will depend on the availability of financing, the ability to attract private sector investment, and the capacity of the government to effectively manage PPP projects. It will be important for the government to continue to improve the legal and regulatory framework, enhance transparency and accountability, and build the capacity of PPP units and implementing agencies.
For a comprehensive overview of the legal framework and practical considerations for PPPs in Pakistan, please read the full Pakistan Chapter of the Lexology GTDT Guide on Public Private Partnerships 2023.
For more information, contact Bilal Shaukat and Adil Tirmizey.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
