An amount of Tk. 3,000 crore, allocated under the fourth successive budget for promoting public-private partnership (PPP) projects in FY 2012-13, is likely to remain unutilised, sources at the PPP office said. The funds have not been utilised during the last 11 months of the current fiscal just like in the earlier three budgets of the incumbent government, since implementation of none of the projects has started yet, sources at the finance ministry disclosed.
However, the government has included 44 PPP projects in the upcoming fiscal, even though not a single project has been implemented yet — although three years have passed since the PPP system was introduced.
On May 28, the National Economic Council (NEC) included 44 projects under different ministries. Of these, three projects are under the rural development and cooperatives division, 13 projects are under the roads division, four projects are under the bridges division, 17 projects are under Bangladesh Railways, three projects are under the shipping ministry, two projects are under the energy and mineral resources division, and two projects are under the housing and public works ministry.
After coming to power in 2009, the Awami League-led government launched a move to attract investors from home and abroad to implement some mega projects, such as the Elevated Expressway worth Tk. 8,703 crore, under the PPP.
In 2010, the government signed an agreement with a Thai construction firm, the Italian-Thai Development Public Company, for the Elevated Expressway project, the first PPP project in the country. The project’s goal was to mitigate traffic congestion in the capital.
Even though construction of the project has begun, the foreign company had to wind up its business because of a funds crunch and legal barriers. This occurred because there is no law for this in the country, the sources informed this correspondent on condition of anonymity.
Besides, the 35-kilometre-long expressway, which has already received approval from the Prime Minister, also has the potential to be a part of the Dhaka Orbital Elevated Road, which is part of a plan to create a ring road by which greater Dhaka can be circumnavigated.
Every year, PPP allocations have reverted since there has been no implementation, the sources in the finance ministry said. According to the PPP office sources, too, the government’s targeted operationalisation of the PPP projects is yet to be achieved. The PPP Act is yet to be enacted, which creates issues between the sectors as to who would implement the PPP projects, sources said, adding, “Hence, the first challenge that has to be addressed is to have separate PPP guidelines as far as their operation and implementation are concerned.”
The government has finally decided to enact a piece of legislation, named the Public-Private Partnership (PPP) Act 2013, to attract private investors to its public-private initiatives for accelerating development. But as sources in the PPP office noted, this has come after substantial amounts of money, time and project work have been lost during the last four years.
On May 28, planning secretary Bhuiyan Shafiqul Islam told reporters that the NEC included 44 PPP projects, and it is not possible to implement these solely through PPP. He further said these projects are mainly business-oriented and revenue-earning projects. He further said that since the PPP is a new concept in the country, formulating an Act for PPP was needed for ensuring effective implementation of the projects.
In the budget speech last year, finance minister AMA Muhith said though the number of PPP projects that has been implemented was not as high as expected, a considerable number of such projects has been approved.
“I am hopeful these projects will be implemented soon. A number of PPP projects in power plants, land ports and other infrastructures has been successfully implemented. Eight projects under five ministries/divisions, to be implemented on a pilot basis, have been identified,” he said, adding, “According to a preliminary estimate, the probable investment in these projects will amount to around Tk. 3,000 crore.” In the Sixth Five-Year Plan (SFYP), the government had committed to raising the GDP growth rate to 8 per cent by 2015.
“To achieve this goal, investment in GDP needs to be as high as 35% to 40%. Currently, this figure hovers around 24 to 25 per cent, which is lower than the national savings ratio. This implies that there is idle capacity,” the plan noted, adding, “To attain and sustain 8 per cent growth rate by and beyond 2015 requires an additional USD 28 billion from 2011 to 2015.”
Amid the global meltdown and the resulting fall in the purchasing power of the taxpayers of the country, the government is not in a position to mobilise such massive amounts of additional resources internally.
Against this backdrop, the government is emphasising participation of the private sector through PPP for reducing the investment deficit, sources said.
-With The Independent input
