The Public Private Partnership Authority (PPPA) is committed to supporting public agencies to deliver public infrastructure services that are required to enhance the development of Bangladesh. Public-Private Partnerships (PPPs) can deliver a solution that provides quality public services to citizens, enabling the government to meet its responsibility of the provision of services while ensuring sustainability of the service provision by providing acceptable financial returns to the private sector. In the process, PPPs also help develop capital markets and provide a mechanism to channel private savings in the much-needed infrastructure services which cannot alone be met by government's allocations. The private sector also brings expertise, innovation, and management efficiencies which quite often result in reducing the cost of service provision while improving its quality.
As the Secretary & CEO, PPP Authority, I have focused my efforts on moving forward the existing projects, bringing in new bankable projects and providing some clarity on the concept of PPPs. Let us first dissect and elaborate on what is a PPP, why we may need it, and what are we doing so far in Bangladesh through PPP Authority.
PPP is an innovative, not necessarily a recent, mechanism to harness private sector participation both in the development and the delivery of traditional public services. Romans have used it to make aqueducts, bridges, and roads. In the Indian Subcontinent, the British constructed a large railway network primarily using private sector financing. PPPs comprise of numerous models which could involve the private sector in construction, financing, and operations of public services. The government can use a PPP to find innovative solutions to climate change and incorporate them in the design and delivery of a project. In a nutshell, PPPs over the years have changed the role of the government from financier and direct provider of services to that of a facilitator and a regulator.
PPP in Bangladesh is the brainchild of Prime Minister Sheikh Hasina. The Government of Bangladesh has prioritised the PPP programme as one of the key initiatives for increasing investment in infrastructure and supporting the realisation of Honourable Prime Minister Sheikh Hasina's Vision 2021 and 2041. An estimated US$ 928.48 billion additional funding is required till 2030 for Bangladesh to meet the United Nations Sustainable Development Goals (SDGs), an amount which cannot be funded from the government budget alone and requires private sector participation. The Eighth Five Year Plan (8FYP) financing strategy combines ADP allocations with a strong PPP effort, mindful of the resource constraints and high investment costs. The 8FYP which incorporates lessons from the of implementation of the Sixth and Seventh Plans, requires a new strategy for the implementation of the large, complex, and capital-intensive projects based on turnkey contracts with reputed and experienced international firms using multilateral development partner funding and better risk allocation. The 8FYP focuses on ensuring sustainable financing in the power, energy, transport, tourism, ICT, education, housing, agriculture and food security and, the health sector through PPPs.
In order to bridge the investment gap and meet infrastructure needs, private-sector involvement is essential. PPPs can contribute to national development and growth across all socioeconomic sectors if properly planned, built, and implemented, benefiting both the private and public sector players. The design of high-performance and productive PPPs involves taking into account unique requirements at various stages of planning, structuring and execution of such projects at the level of the sector and the country and through four key ecosystem levers: governance, policy, transaction phase and execution/monitoring. The PPPs arrangement is built on the expertise of each partner, adopting a methodology through which a significant number of risks are transferred from the public to the private sector. The division of tasks, responsibilities, and risks under PPP enables the delivery of infrastructure assets and public service through the most cost-effective method at the appropriate quality standards, allocation of resources, risks, and rewards. In some cases, the government may support the project by providing revenue subsidies, including tax breaks or minimum income guarantees for a fixed period.
The PPP Authority's role in relation to the PPP programme extends to supporting the line ministries and agencies to identify, develop, procure, and finance PPP projects. For investors and lenders, the PPP Authority provides a professional, transparent, centralised portal for accessing well-prepared PPP projects and is staffed by both private sector professionals and civil service resources. The PPP Authority facilitates project development and builds capabilities to enhance PPP projects' quality, attractiveness, and sustainability.
There have been some significant developments in the PPP programme since 2010. We have revised the framework for the programme and put in place a complete national transformation and changed management programme. The changes have impacted five core areas of the PPP program to ensure its success and to help deliver the investment targets that had been set out in our development plans. These changes include institutional changes, regulatory reform, project development focus, capacity development, and financial support mechanisms. Multilateral agencies and development partners play a catalytic role to promote PPPs in emerging economies. In order to create greater awareness of the developments in PPP and to show broader perspectives and strategy of the PPP programme, the PPP Authority strengthened its relationship with multilateral agencies and development partners like bilateral agencies, national and international banks, and civil societies towards development and implementation of the PPP projects in Bangladesh. The Government of Bangladesh had also adopted a "Policy for Implementing PPP projects through Government to Government (G2G) partnership" in 2017. Under this G2G partnership policy, the PPP Authority signs a Memorandum of Understanding (MoU) with a Ministry/Agency of another government to facilitate foreign private investors to implement PPP projects in Bangladesh. At present PPP Authority have signed G2G MoUs with Denmark, Japan, Korea, Singapore, Saudi Arabia, and the United Arab Emirates. To ensure the financing of the PPP transactions, a PPP Finance Partnership initiative has been signed with 15 financial institutions. Moreover, comprehensive capacity development and awareness creation campaigns have been implemented for government officials, lenders, investors, and other stakeholders through roundtable discussions and webinars. Additionally, the PPP Authority has taken initiatives to promote PPP projects on climate change, energy infrastructure, and green energy technology. At present, the PPP Authority has a pipeline of 77 projects with an estimated investment value of US$ 35.42 billion which are at different stages of development and delivery. Portfolio of investment increased by 40 per cent to US$ 35.42 billion within last two years (2020-21).
PPP Authority is implementing many mega projects that are strategically important for the development of the nation as a whole. Few notable projects includes Dhaka Elevated Expressway, Dhaka By-pass Toll Road, Gabtoli-Savar-Nabinagar PPP Road, Outer Ring Road, Chattogram-Cox's Bazar Highway, Dhaka-Joydevpur-Mymensingh Road, Circular Railway Line around Dhaka City, Bay Terminal and Patenga Container Terminal at Chittagong, Water Supply, Sewerage, Drainage System & Solid Waste Management System in Purbachal New Town, Khulna Khan Jahan Ali airport, Info-Sarkar - Phase-3, 2nd Padma Multipurpose Bridge at Paturia-Goalundo, O&M of Mass Rapid Transit (MRT) Line-2, Multimodal Hub at Kamalapur and Biman Bandar Railway Station, Dhaka East West Elevated Expressway etc.
Well-structured PPP projects are widely acknowledged to deliver a 'win-win-win solution' that benefits all stakeholders. The PPP Authority thus strives to help develop partnerships between the public and private sectors and can provide the foundation for post-COVID economic recovery. With the firm support and guidance of the Prime Minister, a successful PPP programme will help Bangladesh achieve even more rapid economic growth and its rapid transition to middle income status.
Sultana Afroz is Secretary to the Government of Bangladesh & CEO, Public Private Partnership (PPP) Authority.
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