In a recent specialized conference titled "The Model of Public-Private Partnership in Land Development," key figures from the field of planning and budgeting convened to discuss pressing issues. The conference was graced by the presence of Amir Amini, the former Head of the Planning, Supervision, and Land Management Office of the country's Plan and Budget Organization, who served as the scientific chairperson. Other notable attendees included Seyyed Hossein Hosseini Noorzad, a member of the faculty of the University of Tehran, and Mohsen Rouhaninejad, Head of the Public-Private Partnership Group of the country's Plan and Budget Organization.

The Significance of Public-Private Partnerships

In his opening remarks, Mr. Amini emphasized the significance of public-private partnerships (PPPs). He pointed out that most challenges in this area stem from the executive sector. He further suggested that by increasing private sector involvement in implementing development plans, the government could significantly reduce costs.

Challenges Faced by Public-Private Partnerships

As the conference progressed, Mr. Noorzad highlighted financing as a major concern for PPPs. He cited international reports indicating that half of the world's countries lack access to essential resources such as the Internet, clean water, environmental resources, and energy. He shared that global forecasts suggest an annual requirement of approximately $6 trillion for infrastructure financing. In Asia, this figure stands at an estimated $400 billion. Considering an average infrastructure need of about 5%, this translates to an annual budget of roughly $20 billion for financing infrastructure needs in Asian countries. He emphasized that about 60% of this amount, which is $12 billion, must be sourced from the private sector, indicating a significant demand.

Mr. Noorzad also highlighted other challenges faced by PPPs. These include insufficient financing, maintenance of infrastructure from both technical and facilities perspectives, planning and preparation of infrastructure, and the cyclical view of infrastructure.

The Role of the Government in Public-Private Partnerships

Mr. Noorzad underscored the crucial role of the government in PPPs. He outlined several necessary actions to be taken:

• Fostering a collaborative and win-win approach between parties
• Capacity building (especially by the government)
• Commitment to comprehensive feasibility studies
• Integration of infrastructure plans
• Adopting a phased approach starting with a few small projects as examples

Iran's Revenue Situation and the Need for Public-Private Partnerships

Mr. Rouhaninejad, Head of the Public-Private Partnership Group of the country's Plan and Budget Organization, addressed the government's revenue situation and the need for PPPs. He pointed out that in Iran, less than 2% of the Gross Domestic Product (GDP) is allocated to construction costs. This is in stark contrast to global norms where governments typically spend between 5% to 7% of GDP on construction projects.

If Iran were to match this global average of 5%, the government would need to spend approximately $20 billion annually on construction projects. However, given the current economic conditions, the government is unable to afford this amount and must resort to leverage pressure approaches for project financing.

The Importance of Transparent Policy-Making and a Comprehensive Approach

Mr. Rouhaninejad also underscored the government's role in PPPs. He emphasized the need for transparent policy-making for the development of PPP contracts, compliance with legal frameworks and regulations, support for relevant institutions, and provision of necessary financial resources.

He further outlined several challenges in PPPs, including lack of interest from executive agencies, absence of a comprehensive approach to developing guidelines, failure to use credit allocation tools for partnerships, non-economic and directive pricing, lack of long-term laws and regulations, financial constraints in the private sector, and reduced trust of the private sector in the public sector. These issues were identified as significant obstacles to successful PPPs.