Major boost for PPP projects as govt approves policy, strategy
Friday, 18 June 2010
Nazmul Ahsan
The government Thursday approved proposal to set up an office to deal with Public Private Partnership projects as part of its efforts to kick-start much-needed infrastructure schemes, officials said Thursday.
The Cabinet led by Prime Minister Sheikh Hasina made the approval by okaying the Private-Public Partnership (PPP) Policy and Strategy and three guidelines to implement big projects.
Creation of the office brings an end to the uncertainties over the new financing schemes and the long tussle among state agencies over how PPP projects would be financed, worked and regulated.
"The PPP Office will take up the jobs to implement the PPP projects and all rules and regulations that will govern them," said a government secretary.
"It will be an independent office to be located at a suitable place in the city," he said, quoting the approved policy.
The PPP Office will operate under the jurisdiction of the Prime Minister's Office (PMO) and be accountable to the premier, the secretary who attended the Cabinet meeting said.
A PPP Advisory Committee, headed by the prime minister, will be established under the PPP Policy and a committee headed by the principal secretary to the PMO, officials said.
The meeting also approved three guidelines for small, medium and large projects.
According to the approved guidelines, a project having investment above Tk 2.5 billion, excluding ongoing capital for expansion, will be classified as a large project.
A project with investment between Tk 250 million and Tk 2.5 billion, excluding on-going capital for expansion, will be medium scheme.
Projects with an estimated outlay of Tk 250 million each, excluding on-going capital for expansion, will be put in small category.
The policy has identified 22 sectors where investment under the PPP has been allowed and suggested restriction on three sectors related to the country's security.
The sectors where investment is allowed include exploration, production, transmission, and distribution of oil, gas, coal and other mineral resources, construction of airports, terminals and related aviation facilities, projects on water supply and distribution, sewerage and drainage.
Other areas are establishment of effluent treatment plants, land reclamation, dredging of rivers, canals, wetlands, lakes and other related facilities, construction of highways and expressways including mass-transit, bridges, tunnels, flyovers, interchanges, city roads, bus terminals, commercial car parking, port development including inland container terminals, inland container depot and other services.
Telecommunications systems, networks and services including information and communication technology, solid waste management projects, railway, tourism industry, economic zone, industrial estates and parks, city and property development, including services to support commercial and non-commercial activities, and poverty alleviation projects have also been allowed for investment.
An official said the creation of the PPP office would end all bureaucratic tangles over the public-private projects.
"The long tug of war has virtually come to an end. We hope we can see some real PPP investments after more than a year," a high official in the PMO who also attended the Cabinet meeting said.
He said a Chief Executive Officer (CEO) will head the PPP Office. The CEO will report to the Prime Minister.
The Finance Minister unveiled the PPP schemes in the first budget of the new Awami League government in June 2009. He also set aside Tk25 billion public money for financing the projects.
But any hopes to fast-track the projects were soon dashed after the Board of Investment (BoI) opposed a draft of PPP Guidelines and its creation as an agency under the ministry of finance.
The Cabinet meeting also asked the BoI to do all work related to the formulation of the PPP Guidelines.
The BoI prepared the draft PPP Guidelines in March this year and placed it to the Cabinet Division for approval. This time, however, the finance ministry opposed the draft, pointing out a number of anomalies.
The Cabinet Division chose not to place the draft to the Cabinet meeting due to the festering tug of war between the government agencies, sources said.
The PMO then took up the job to remove the anomalies from the draft PPP guidelines. It set up a high profile body led by a secretary.
The committee submitted its report in April this year, sources said. The approval of PPP policy and guideless has been made in accordance with the committee report.
The government Thursday approved proposal to set up an office to deal with Public Private Partnership projects as part of its efforts to kick-start much-needed infrastructure schemes, officials said Thursday.
The Cabinet led by Prime Minister Sheikh Hasina made the approval by okaying the Private-Public Partnership (PPP) Policy and Strategy and three guidelines to implement big projects.
Creation of the office brings an end to the uncertainties over the new financing schemes and the long tussle among state agencies over how PPP projects would be financed, worked and regulated.
"The PPP Office will take up the jobs to implement the PPP projects and all rules and regulations that will govern them," said a government secretary.
"It will be an independent office to be located at a suitable place in the city," he said, quoting the approved policy.
The PPP Office will operate under the jurisdiction of the Prime Minister's Office (PMO) and be accountable to the premier, the secretary who attended the Cabinet meeting said.
A PPP Advisory Committee, headed by the prime minister, will be established under the PPP Policy and a committee headed by the principal secretary to the PMO, officials said.
The meeting also approved three guidelines for small, medium and large projects.
According to the approved guidelines, a project having investment above Tk 2.5 billion, excluding ongoing capital for expansion, will be classified as a large project.
A project with investment between Tk 250 million and Tk 2.5 billion, excluding on-going capital for expansion, will be medium scheme.
Projects with an estimated outlay of Tk 250 million each, excluding on-going capital for expansion, will be put in small category.
The policy has identified 22 sectors where investment under the PPP has been allowed and suggested restriction on three sectors related to the country's security.
The sectors where investment is allowed include exploration, production, transmission, and distribution of oil, gas, coal and other mineral resources, construction of airports, terminals and related aviation facilities, projects on water supply and distribution, sewerage and drainage.
Other areas are establishment of effluent treatment plants, land reclamation, dredging of rivers, canals, wetlands, lakes and other related facilities, construction of highways and expressways including mass-transit, bridges, tunnels, flyovers, interchanges, city roads, bus terminals, commercial car parking, port development including inland container terminals, inland container depot and other services.
Telecommunications systems, networks and services including information and communication technology, solid waste management projects, railway, tourism industry, economic zone, industrial estates and parks, city and property development, including services to support commercial and non-commercial activities, and poverty alleviation projects have also been allowed for investment.
An official said the creation of the PPP office would end all bureaucratic tangles over the public-private projects.
"The long tug of war has virtually come to an end. We hope we can see some real PPP investments after more than a year," a high official in the PMO who also attended the Cabinet meeting said.
He said a Chief Executive Officer (CEO) will head the PPP Office. The CEO will report to the Prime Minister.
The Finance Minister unveiled the PPP schemes in the first budget of the new Awami League government in June 2009. He also set aside Tk25 billion public money for financing the projects.
But any hopes to fast-track the projects were soon dashed after the Board of Investment (BoI) opposed a draft of PPP Guidelines and its creation as an agency under the ministry of finance.
The Cabinet meeting also asked the BoI to do all work related to the formulation of the PPP Guidelines.
The BoI prepared the draft PPP Guidelines in March this year and placed it to the Cabinet Division for approval. This time, however, the finance ministry opposed the draft, pointing out a number of anomalies.
The Cabinet Division chose not to place the draft to the Cabinet meeting due to the festering tug of war between the government agencies, sources said.
The PMO then took up the job to remove the anomalies from the draft PPP guidelines. It set up a high profile body led by a secretary.
The committee submitted its report in April this year, sources said. The approval of PPP policy and guideless has been made in accordance with the committee report.