Tk 30,500cr ADP planned

Budget will have a new public-private partnership component: Muhith 
Government plans Tk 30,500 crore Annual Development Programme (ADP) for fiscal 2009-10. This was disclosed by Finance Minister AMA Muhith yesterday.
“The government will take up the challenge of implementing the big ADP to prove that it has the implementing capacity”, Muhith told reporters after a meeting of the cabinet committee on purchase.
The ADP allocation for FY 2008-09 was Tk 25,600 crore.
The finqance minister said that the ensuing budget would consist of three components – revenue budget, development budget and public-private partnership budget.
The proposed Dhaka-Chittagong Expressway will be implemented under the public-private partnership budget, he added.
Funds would be earmarked for the Public-Private Partnership in the upcoming budget which will have PPP alongside development and revenue heads, the finance minister said.
He also said that development initiatives would be taken in education, health and infrastructure sectors through the PPP and power sector would get the priority.
“There will be three-tier budget in the 2009-10 fiscal year-the PPP will be added alongside revenue and development budgets,” the minister said after meeting a delegation of the Bangladesh Association of Banks, an organisation of private bank entrepreneurs.
The move aims to foster concerted efforts of the public and private sectors and allow the private sector greater role in development.
“We’re hopeful of a positive outcome,” the minister said.
Muhith said the GDP will grow at six percent in the current 2008-09 fiscal year despite the ongoing global economic recession. But the year was going to be tough because of the financial downturn.
UNB adds: The development budget is 16 per cent higher than the original ADP allocation of Tk 25,600 crore for the current fiscal year and more than 24 per cent higher than the revised ADP of Tk 23,000 crore, which the government approved on April 30.
“This is an ambitious ADP that we have just finalised for two reasons. We’ll have to implement the pre-election pledges and also take measures in improving capacity to implement big projects,” Muhith told reporters at the Cabinet Division.
He was replying to a question whether the government machinery has the capacity to implement the huge ADP as it could not implement even a smaller ADP.
According to figures available, only 41 per cent of the projects of the current fiscal year have been implemented during July-March period, leaving only a quarter for implementing the rest of the projects.
“The ADP should be ambitious. Because, it’s shameful that public investment is only 15 per cent in ADP out of the total public expenditure,” Muhith said, adding that the investment should be 20 per cent, which the government would do in its 5-year tenure.
He, however, would not reveal the amount to be allocated for the PPP projects.
He said the private sector would bring projects on their investment while the allocation would be spent to facilitate the projects mainly in the health, education and infrastructure sectors – power, energy, port, roads, highways, expressways and elevated expressways.
“If the private sector considers that the project won’t be a profitable one, the government will try to remove the problem.”
Muhith said the PPP projects would not require approval from the Executive Committee of the National Economic Council (ECNEC) while the private sector would implement the projects and operate them having both options-BOO (build-operate-own) and BOOT (build-operate-own-transfer).
He said the commercial banks have expressed their interest to take part in the PPP projects.

 
Courtesy of The Independent