Why PPP initiative fails to boost private investment03 November 2021
The public-private-partnership (PPP) initiative has failed to attract any significant private investment in improving the country's infrastructure, though the government is still struggling to popularise the much talked-about concept among local and foreign investors. Experts have identified a variety of reasons, including project selection, overvalued costing, implementation delays, flawed feasibility studies and finally corruption, for the sorry state of PPP, launched about a decade ago. Corruption, they allege, is one of the major negative factors that discourage investors from coming forward with PPP investments. According to a news report published in a national daily on Tuesday, currently there are 72 active PPP projects in Bangladesh involving around $9.7billion. The overvalued estimation and financial constraints have already forced the government to exclude non-viable projects from the PPP project list.
In the last six months, at least five PPP projects, including dredging works at the Payra Port, construction of a Dhaka-Chattogram expressway and building of the Laldia Bulk Terminal, have been dropped. In February, the government also scrapped the PPP deal with a Belgian company on dredging works along the Rabnabad channel of the Payra Port after finding that the estimated cost of Tk 8,643 crore for the works was too high. Neighbouring India has $263.61 billion investments in 1,069 active PPP projects as of October 2021, says the World Bank. It may be noted that in 2015, the Bangladesh Public-Private Partnership Act was enacted and the Office of PPP was turned into Public Private Partnership Authority Bangladesh under the Prime Minister's Office in order to bring an improvement to the PPP institutional setup. But, experts said, the changes did not result in the expected impetus to the overall PPP investment.
Most PPP projects selected by the government in the power, road, port, housing, medical care and bridges sectors have failed to bring in shaky private investors. In 2017, a study titled 'Financial and non-financial issues in implementing PPP in Bangladesh' by the Bangladesh Institute of Bank Management identified cost and time overruns, project appraisal, project monitoring by the government, lack of transparency and capacity building as major challenges for PPP ventures. Countries like Canada, UK, the Philippines and India have made PPP projects fruitful. Bangladesh, on the other hand, failed to make any headway even after a lapse of one decade. To meet the country's development targets, the investment climate should be more attractive. A proper infrastructural approach is a must for sound completion of PPP projects.