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Public-Private Partnerships, commonly referred to as PPPs, are cooperative arrangements between government entities and private sector companies that work together to provide public services, infrastructure, or business ventures. In Bhutan, PPP frameworks have been established to leverage private sector expertise and resources while meeting public needs efficiently and sustainably. The Bhutanese government’s focus on sustainable development, good governance, and Gross National Happiness means that PPPs are designed not only for efficient service delivery but also for social, environmental, and economic harmony. The PPP landscape in Bhutan is evolving, with focus areas including energy, education, health, tourism, and infrastructure projects.
Engaging in a PPP initiative in Bhutan involves navigating complex legal frameworks, multiple stakeholders, and stringent compliance requirements. Here are common situations where legal help may be needed:
Bhutan’s regulatory institutions and legal framework governing PPPs are continually developing to align with national priorities and international best practices. The cornerstone framework is the Public-Private Partnership Policy, adopted by the Royal Government of Bhutan, which defines principles, objectives, and procedures for PPPs. Other key legal considerations include:
A PPP in Bhutan is a collaborative arrangement between a government agency and a private sector partner to develop, operate, and manage a public infrastructure project or provide services, often involving shared risks and benefits.
Common sectors include transport infrastructure, tourism, energy, health, education, waste management, and urban development. Sector-specific guidance can be sought from the Royal Government’s policy documents.
Most PPP projects begin with a proposal from a public authority, sometimes in partnership with private enterprises. Projects must undergo feasibility assessments, obtain necessary regulatory approvals, and comply with the PPP Policy procedures.
Core documents include a detailed PPP agreement or contract, shareholders’ agreement (if relevant), concession or license agreement, Environmental Impact Assessment (EIA), and regulatory approvals from relevant bodies.
Risks can involve construction delays, financing challenges, regulatory changes, currency fluctuations, force majeure events, and disputes over revenue sharing or contractual obligations.
Yes, foreign companies can participate, subject to compliance with foreign investment regulations, sectoral restrictions, and required approvals from the Royal Government of Bhutan.
Disputes are typically resolved through negotiation, mediation, or arbitration as specified in the contract. Bhutanese courts may also have jurisdiction, depending on the agreement and nature of the dispute.
Legal challenges often involve regulatory compliance, land acquisition, contractual ambiguities, permit delays, and adapting to evolving policies or legal frameworks.
Incentives may include fiscal benefits like tax relief, government guarantees, priority in project approvals, or dedicated support from relevant ministries, subject to policy directives.
Yes, most large-scale PPP projects must undergo an Environmental Impact Assessment and comply with all pertinent environmental and social regulations before they are approved.
For more detailed guidance and support on PPPs in Bhutan, consider reaching out to the following organizations:
If you are considering engaging in, or are already involved with, a PPP initiative in Bhutan and require legal advice, consider the following steps:
Professional legal advice can help ensure your PPP involvement is secure, compliant, and aligned with your project goals and Bhutan’s laws.
