public private partnership and their success stories in Nepal

1. ©REGMI,Milan Page 1
Q) Discuss PPP projects in Nepal with examples . ( Author: Milan Regmi)
A public–private partnership (PPP) is a government service or private business venture which
is funded and operated through a partnership of government and one or more private
sector companies. These schemes are sometimes referred to as PPP (Wikepedia).
A business relationship between a private-sector company and a government agency for the
purpose of completing a project that will serve the public. Public-private partnerships can be
used to finance, build and operate projects such as public transportation networks, parks and
convention centers. Financing a project through a public-private partnership can allow a project
to be completed sooner or make it a possibility in the first place (investopedia).
In case of Nepal, Infrastructure deficits in Nepal are hampering economic growth as well as
inclusiveness as far as the poor are concerned. Currently Public Private Partnership (PPP) is
much discussed worldwide and is recognized as a useful tool to deliver infrastructure projects
through the joint effort of public and private sectors. Governments of developed as well as
developing countries are facing financial constraints to deliver infrastructure as demanded
because government funds are limited and need to cover all of the various services provided by
the state. Government funds must cover a wider range of sectors like poverty alleviation, water
supply, power supply, waste management, road, rail, airports, education, and health. If
infrastructure could be delivered through private funding, the government could concentrate on
other social sectors to improve living conditions of the people. The concept of PPP has been
developed as a means to use the finance and technical know-how of the private sector. Big hope
is laid upon PPP worldwide.In PPP both sectors must have a common vision.
PPP projects have been showing positive results in developing as well as in developed countries.
According to the report of accelerating PPP in India, the PPPs in UK have been highly successful
and an assessment of the UK PPP policy in 2009 showed that 65% of the PPP contracts were
delivered on time and within the agreed budget. The same report presented that Australia, Brazil,
and Philippines have well developed PPP structure and policies and there is a growing focus in
these nations to develop infrastructure under PPP. PPPs in India have also shown good progress

2. ©REGMI,Milan Page 2
in some sectors while others achieved only limited success. There have been successes as well as
failures of PPP but most of the countries are learning from the failures and moving forward with
PPP projects.
The Nepalese government has also realized the importance of PPP in Nepal. In this regard the
GoN has put forward PPP policies and acts to facilitate project development of infrastructure
projects under the PPP model.
Success Stories Of Public private Partnerhsip In Nepal
Case I
The green (bio-degradable) waste proportion is almost 70% of the total waste generated in the
densely populated cities of Nepal. Finding a space to dump the wastes has become almost
impossible. People resist having dumping sites or landfill space nearby their living area due to
the unhygienic way of dumping and bad odour in the surrounding area. Though many houses
have adopted a system of dumping these organic wastes in their own garden, it is not always well
managed due to space problem in urban areas.The construction of compost plants in the four
Municipalities of Nepal- Biratnagar, Butwal, Dhangadi and Hetauda has proven to be a boon for
the cities, a win-win situation for both the Municipality and the local community. The enormous
task of managing this organic waste has been possible through UNDP’s Public Private
Partnership for Urban Environment (PPPUE) project.Ramnagar Community Compost and
Recycling Plant in Butwal (mid-west Nepal) serves four neighbourhoods in terms of composting
wastes. The plant was constructed with joint funding of the Municipality, PPPUE and the local
community. The PPPUE project provided seed grant support of Rs. 526,876 for the construction
while the local community took the lead to oversee the construction of the plant.Everyday about
300 kgs of waste collected from households is brought to the plant; the biodegradable waste is
retrieved and composted while the non-degradable portion of the waste is disposed off through
the Municipality’s trucks and tractors. Per week, the plant on average produces about 300 to 400
kgs of compost manure.

3. ©REGMI,Milan Page 3
Case II
Community electricity for sustainable livelihoods through public-private
partnerships
The whole nation is obligated to stay in darkness everyday due to the shortage of electricity. At a
time when there is hot debate but not any significant output for the generation of electricity by
tapping Nepal’s huge water resources, Ghandruk—a renowned tourist area in the Annapurna
Conservation Area Project (ACAP)—is enjoying electricity from the micro-hydropower stations.
It is developing itself as the village of micro-hydropower projects. The electricity generation here
does not have a long history, but is very praiseworthy. The first micro-hydro project Ghandruk
Micro-hydro was developed in the late 1990s after the inception of the National Trust for Nature
Conservation (NTNC) which implemented the Annapurna Conservation Area Project in 1987. It
was a time when the tourist area promotion concept was just introduced. Then the village was
dependant on tuki ( a lamp fuelled by kerosene), but now one could easily see the twinkling
lights in every house of the village which is the result of the common efforts of the communities.
The electrification of Ghandruk village required a close co-operation between the community ,
the private sector and civil society.The Agricultural Bank of Nepal providedd a loan ; the
Government of Nepal gave a grant , while ACAP helped with community mobilization and
financial aid. A private company , Development and Consulting service (DCS), was contracted
to design and bulid the hydropower plant, while overall management of the project as left to the
electrification committee , elected from among the Consumers.The committee recriited a
manager and wo operators and put them in charge of collecting revenues , levying fines from
defaulting customers , and general operation of the palnt.
Construction of the hydropowerplant cost Rs 3.4 million and was financed through a
combination of loans , grants and both cash and in kind contributions from the community.The
project was initiated by thhe community leaders who mobilized the people in a fund aising drive
and approached ACAP for assistance. Even after 24 years of operation the project is at srong
financial position.