Strengthening the Partnership through NTB’s & PPP’s

SAARC-CCI CAPACITY BUILDING WORKSHOP.Tajo Tasha, Thimphu, Bhutan

28th November 2013By

Nailin AttygalleSecretary General/CEO

Federation of Chambers of Commerce & Industry of Sri Lanka

ContentRegional contextAction to be takenNTB’s in right perspective How to overcome & strengthen the unity PPP approachSri Lankan perspectiveTypes & benefits of PPPFuture of the region through strengthening

the partnerships.

NalinAtty@SAARC-CCI-Thimphu

Regional Context1/4th of the world population

Accounts for 3% of world GDP

Less than 3% of world exports

Less than 2% of world FDI


Regional Context- 2Fastest growing economies- Averaging over

6% for last decade.

Biggest market place in terms of population

Young & Young adult population- 1/4th are in the age between 15 to 30.

Annual income growth averaging 8%


Regional Context- Need Action?Are we using our strengths?

Statistics, research studies, recommendation and meetings all over.

Sleeping giant is going to miss the bus?

Need consensus for remedial action


Regional Context- Need Action 2Negative list/sensitive list

Trade agreements and MOU’s

Entities such as SAARC- In existence and action oriented activities?- outcome to date?


Definition of ‘Nontariff Barrier’

A form of restrictive trade where barriers to trade are set up and take a form other than a tariff. Nontariff barriers include quotas, levies, embargoes, sanctions and other restrictions, and are frequently used by large and developed economies.


NTB Further ExplanationNontariff barriers are another way for an

economy to control the amount of trade that it conducts with another economy, either for selfish or altruistic purposes.

Any barrier to trade will create an economic loss, as it does not allow markets to function properly.

The lost revenues resulting from the barrier to trade can be called an economic loss


NTB’sThe Agreement on SAARC has a commitment for reducing

tariffs, but has nothing specific to offer with regard to the other complements to facilitating trade. These Barriers are relating to:

Testing requirements; Standards; Customs valuation, Labeling requirement; Limitation of land port facilities; Goods delivery/storage.


Inter Regional Strategy to Overcome NTB’sRespective country policiesPolitical culturesToo little to offer and rest comes as NTB

Regional players unity and understanding Consolidation within the countryBuild strong partnerships with regional

players


How to strengthen the PartnershipsPPP model

It is a paradigm shift

Whole world believes it but the implementation issues.

It is a challenge for the region


Definitions of PPPDefinitions of PPP

An agreement between private and public sector agents to undertake a particular project in line with at least one of the two principles below;

Joint decision making Joint risk financingNalinAtty@SAARC-CCI-Thimphu

Regional Governments AttitudeNo privatization of government ventures.

To use as a political trump

Survival strategy

CAN WE CHANGE THIS ATTITUDE??


Sri Lankan Example/PerspectiveCurrent Government through its long term

policy frame work has clearly stated that the Government does not believe “Privatization” further more and instead private sector is a vital part of economic development and thus it is encouraged to partner the Public entrepreneurial ventures


Sri Lanka vs Region All believes no privatization

All believes private sector is the engine of the economic growth

ONLY WAY FORWARD to OVERCOME NTB’s are PARTNERING LOCALLY & REGIONALLY


Types of PPP’sPublic provision of collective goodsService provision contractsOutsourcing/contractingOutright privatizationDesign and construct

(D & C)Sale and leaseback

Operate and maintain (O & M) ConcessionOperate maintain and manage (OM &

M)Build transfer operate (BTO)Build operate transfer (BOT)Build lease transfer

(BLT)


Types of PPP’s 2Build lease transfer

maintain (BLTM)Build own operate

remove (BOOR)Build own operate

transfer (BOOT)Lease renovate

operate transfer (LROT)

Design build finance operate (DBFO)

Build own operate (BOO)

Design build finance operate manage (DBFOM)

Franchise Joint venture (JV)Regeneration

partnership


Benefits of PPPAccelerated infrastructure developmentFaster implementationReduced whole-life costsBetter risk-allocationBetter incentives to performImproved quality of serviceGeneration of additional revenueEnhanced public management


Reasons for Implement PPP’sGovernment’s funding Gap Capacity constraints Benchmarking public sector to the

private sector PPP also ensures that cost and time

over runs are not born by the government

Off Balance Sheet Risk of Cost and time over runs passed

to private Company


Governments Strategy to ShiftThe governments should move away from

the notion that state should play the leading role in infrastructure development

Instead governments should seek greater involvement of the private sector in the development of the country

More private public partnerships are encouraged in this regards


Governments ResponsibilityPrepare master plans and enable policy

formulationLegislative and institutional reformsProviding common infrastructureAdministrative capacity buildingIdentification of thrust areas/zones/ projectsRisk assessment and mitigationFacilitate efficient project clearanceEnsure transparency and welfareCountry promotions and research


Private Sector ResponsibilityInvesting into new business opportunities

Efficient management of the resources

Corporate and social responsibility

Ecological sustainability

Man power building and training of high quality staff


Sri Lanka- Success StoriesSri Lanka Telecom

Sri Lanka Ports Authority with SAGT

Sri Lankan Airline

Regional Plantation Companies

Hingurana Sugar Industries Ltd.NalinAtty@SAARC-CCI-Thimphu

Why Re-invent the WheelRegion as one team

SAARC-CCI as the catalyst- Co-Committee

Information portal at SAARC-CCI

Dynamic & Vibrant entity

SAARC-CCI communiqué to respective governments


Derived OutcomeStrengthening co-operationAcceleration of infrastructure developmentsShowcasing the regional powerConsolidating the respective economiesMore employment creationMore disposable income to the peopleImprovement of macro economic indicatorsBetter future for younger generation


Role of Governments & SAARC-CCIGovernments

Minimize constrains

Adopt the right policy, regulatory

Institutional reforms

SAARC-CCI

Strong lobbing, advocacy and recommendations


Accept the Challenge or PerishWe are a strong entity- sleeping-giantIntellectual studies, researches already done

We know, ‘where are we today’We know, ‘where do we want to be’Challenge is, ‘how do we get their’

POSITIVE APPROACH & ATTITUDE and ALL REGIONAL PLAYERS HAS TO WORK AS CHANGE AGENTS.


THANK YOU.


Strengthening the Partnership through NTB’s & PPP’s

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