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Development 2.0: the case for PPPs in Pakistan

21 1
25.07.2025

Over the past few years, policymakers and academics have shown renewed interest in Public-Private Partnerships (PPPs) as a way of addressing fiscal limitations and speeding up infrastructure construction and the provision of increased yet sustainable public services.

Similar to other developing nations, according to Dr Shamshad Akhtar, who was former finance minister of Pakistan, Pakistan will be facing an estimated USD 124 billion infrastructure financing gap by 2040, along with public debt nearing 66.3% of GDP and is projected to rise to 71.4 percent in FY2025, making traditional government-led-financed development increasingly unsustainable.

These gaps have forced government to explore other forms of financing vehicles like PPPs to facilitate funding of desirable public infrastructure development using money raised from the private sector. However, PPPs have largely been promoted only as an alternative mode of financing whereas they might actually be an enabling tool to deliver greater efficiencies, innovation and value for money-normally referred in Pakistan as a game changer.

The prime minister, Shehbaz Sharif, has recognised the successful implementation of PSDP under the leadership and oversight of the federal minister for planning, development and special initiatives, Professor Ahsan Iqbal.

He gave this credit due to the fact that PSDP is being strategically used for ensuring development of much-needed infrastructure but also serving to provide a clear vision of development priorities and growth path of the country. It is commendable, however this should be supplemented or complemented in the PSDP with addition of new models of financing for PPP that will extend the frontiers of fiscal efficiency even more, crowd in additional private funding and lead to institutional reform.

A detailed report of 2023 published by the Pakistan Institute of Development Economics (PIDE), Reforming the Federal Public Sector Development Programme, presented a........

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