Government seeks unified body to boost private investment in development projects

Government seeks unified body to boost private investment in development projects

The federal government plans to attract greater private-sector investment in infrastructure and public services by merging two existing institutions into a single body, as limited development funding continues to restrict the country’s ability to finance major projects.

The Privatisation Commission (PC) said the federal development budget for the current fiscal year stands at Rs1.126 trillion, significantly below the estimated requirement of Rs4.1 trillion. Against this backdrop, the Privatisation Commission (Amendment) Bill, 2026, currently under consideration by the National Assembly Standing Committee, proposes merging the Public Private Partnership Authority (P3A) with the Privatisation Commission.

Under the proposed legislation, the government will repeal the P3A Act, 2017, and establish a new Privatisation and Public Private Partnership Commission. The new institution will oversee both privatisation initiatives and public-private partnership (PPP) projects through a unified board and approval mechanism.

Economists believe the merger could help address the country’s widening development financing gap by encouraging private investors to participate in projects that the government cannot afford to finance independently. Under the PPP model, private companies provide funding, construct infrastructure and often manage operations, while the government may contribute financial support to make commercially challenging projects viable.

The proposed changes also aim to make the investment process more straightforward. Previously, investors had to deal with two separate federal institutions, each operating through its own board, approval procedures and advisory arrangements. The new commission seeks to replace this fragmented system with a single platform, reducing administrative hurdles and making project approvals more efficient.

Business representatives believe the simplified framework could encourage greater participation from domestic investors, particularly companies that often struggle with lengthy government procedures. A unified institutional structure could also improve coordination and reduce the time and costs associated with investment decisions.

The bill also introduces measures to accelerate project preparation and implementation. According to the Privatisation Commission, each project will receive a dedicated team and a defined timeline, while funding arrangements for feasibility studies, viability assessments and facilitation will help address delays that frequently affect development initiatives.

The proposed framework includes four dedicated funds: the Privatisation Fund, Public Contribution Fund, Viability Gap Fund and PPP Project Development Fund. These funds will operate on a non-lapsable basis, allowing authorities to carry forward unspent amounts rather than return them at the end of each financial year.

Analysts say the provision could improve financial planning and prevent interruptions caused by the annual budget cycle. They argue that inconsistent funding often delays development work and increases overall project expenses.

The proposed legislation also seeks to improve the quality and sustainability of public services. Private companies participating in projects will have to meet performance requirements specified in their contracts, making service standards and infrastructure maintenance enforceable obligations.

Experts believe this approach could address one of the major weaknesses of publicly funded projects, where inadequate maintenance often leads to declining service quality after construction. Greater private-sector involvement could also generate employment opportunities in construction, infrastructure management and project operations.

However, analysts stress that the success of the proposed merger will depend on transparent bidding, effective contract enforcement and strong regulatory oversight to ensure that private investment benefits both the government and the public.