The Government recognizes the importance of improving and expanding infrastructure services for sustaining economic and social development in its Medium Term Development Framework(MDTF) 2005-2010. Pakistan's infrastructure needs are massive and its resources are limited. Not only is there limited fiscal space, there are also huge gaps in public sector capacity to build and operate infrastructure. Improved quality and service coverage in power and water supply, sewerage treatment, transport and logistics are vital for Pakistan's economy and the livelihood of its people. Tight fiscal constraints require innovative approaches, away from the traditional role of the Government as the service provider, to ensure that the massive investment needs are financed with the assistance of the private sector. 

 

The Government estimates that less than half of the infrastructure investment needs can be covered by public funds under the Medium Term Development Framework. A combination of policy reforms, institutional support, incentives and financing modalities is required to encourage private-sector participation in financing, constructing and managing infrastructure projects.In order to structure a comprehensive Public Private Partnership (PPP) program for Pakistan, the Government has looked at global best practice and sought the advice of multilaterals. Based on participant feedback and inline with global best practice, it was concluded that in order to have a successful PPP program, the country needs: