No more push for PPP initiative

The government has retained Tk 3,000 crore allocation for Public Private Partnership (PPP) initiative for the next fiscal year despite lower-than-expected progress in finalising projects in the outgoing fiscal year.

In addition to the budgetary allocation, the government has already provided Tk 1,600 crore to implement various projects in power, energy, roads and railway sectors, said the finance minister in his budget speech yesterday.

Of Tk 3,000 crore, the government has allocated Tk 100 crore for technical support while Tk 400 crore has been proposed under Viability Gap Fund for projects that are not commercially profitable but important for economic development and public services.

In the outgoing fiscal year, the government allocated Tk 3,000 crore for 23 PPP projects mostly in the areas of energy and power. But expected results could not be achieved due to the absence of an integrated policy for PPP.

“Now, the government has formulated a PPP policy, and necessary executive and financial power has been given to the office to discharge its functions. The initiative will get momentum,” Muhith observed.

In the upcoming fiscal year, the government has selected 16 projects to be implemented under the PPP framework.

The finance minister said so far seven power plants with 178 megawatt capacity have been constructed under PPP. The bidding process has begun for another six power plants having a total capacity of 410 MW.

The tender process for establishing a Hi-Tech park at Kaliakoir, a software technology park at Karwan Bazar, two projects in telecommunications sector and one project in sanitation sector is underway, the minister said.

“We have also initiated a programme for establishing eight land ports. Moreover, we are planning to build a satellite town on the outskirts of Dhaka,” he said.

Muhith said initiatives for management of Mongla Port and New Mooring Container Terminal at Chittagong Port and digitisation of land registration have been taken up under PPP. The construction of Dhaka Elevated Expressway and Mayor Hanif Flyover is also underway.

To strengthen PPP initiative and attract investment from home and abroad, the government has created Bangladesh Infrastructure Finance Fund which will commence its function in FY 2011-12, he said.

Businessmen think despite sheer failure in spending money under PPP initiative to implement big projects, the government should continue providing support to keep the momentum going.

“The PPP will facilitate major projects, which will not give result overnight. So, the government should continue it,” said Asif Ibrahim, president of Dhaka Chamber of Commerce and Industry.

“Otherwise, the private sector will not feel encouraged,” he said.

Ibrahim also urged the government to step up efforts to implement various projects it has already undertaken, and increase its efficiency in utilising the fund being allocated.

Economist Hossain Zillur Rahman said “The government should find out reasons why the initiative is not being taken despite the allocation. The finance minister should spell out strategies to help take it off.”

Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh (PRI), said the country could not achieve any success in PPP in the last two years, as the framework was centralised to the Prime Minister's Office.

“Frankly speaking, the people handling the issue have neither experience nor quality. As a result, the whole process has become slow,” he told The Daily Star.

“It took one and a half years to formulate a policy. Now we have policy, but it is not functional. We should not confine it to our narrow thinking,” Mansur said.

The analyst said PPP initiative should be limited to the finance ministry and other line ministries.

“There is no need to involve the highest authority in this issue,” he observed.