Emerging giants urged to invest in Bangladesh's infrastructure sector

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FE Report
Dhaka has urged upon Asia's emerging economic giants to invest in Bangladesh's infrastructure sector, capitalising on its regulations that allow public private partnership.
The call was made by a top communications official at the Asia-Pacific Ministerial Conference on public-private partnership (PPP) for Infrastructure Development in Seoul, the South Korean capital. It was held on October 4-5.
"It was an important forum. The communications secretary has requested the emerging economic powers of Asia to pour money into Bangladesh's power, roads, ports and telecommunications sectors," a Bangladeshi delegation member quoted the top bureaucrat as saying.
"Bangladesh has framed the Private Infrastructure Guidelines that allow PPP in infrastructure development. The regulations are private sector friendly," he pointed out.
The United Nations Economic and Social Council for the Asia-Pacific (UNESCAP) and the South Korean government jointly organised the conference.
The Bangladesh delegation leader particularly referred to the example of the proposed elevated expressway project in the capital, which will be developed through PPP.
The sources at the communications ministry said South Korea has praised the Bangladesh's guidelines and expressed its intention to help develop capacity of the public officials to deal with PPP projects.
With its quick rebound from the 1997 financial crisis and an enhanced legal framework, South Korea has seen the private share of total infrastructure investment increase steadily from less than 4.0 per cent in 1998 to more than 17 per cent in 2006, according to a conference paper.
Bangladeshi delegation members, however, acknowledged that the government-sponsored infrastructure projects are often characterized by "inflated costs," which raise the capital expenditure substantially over the years.
Sector ministries and contracting agencies responsible for preparing PPP projects generally have limited capacity to assess commercial issues and manage procurement.
"We also sought support from the Asian giants in terms of technology transfer about how Bangladesh government can design tight projects," a source pointed out.
"And while the capital contributions of private partners are important in PPP projects, the technical and management know-how of the private sector is also essential for better and more efficient service," he added.
Unlike private infrastructure projects, the conference was told, there is no "check and balance" in public projects.
Experts pointed out that there remained large infrastructure gaps, which needed to be filled to support the region's continued growth and poverty reduction efforts.
The Asian Development Bank has estimated it will require an investment worth $3.0 trillion over the coming decade, significantly above current levels of investment, to prop up the infrastructure sector.
Before the onset of the 1997 financial crisis, private investors were playing an important part in meeting the growing infrastructure demand in Asia's developing countries.