Global Experiences of Public Private Partnership Lessons for Bangladesh Abdullahil Mamun
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GLOBAL EXPERIENCES OF PUBLIC PRIVATE PARTNERSHIP: LESSONS FORBANGLADESH
1) Abdullah Mohammad Ahshanul MamunLecturer
Department of Business Administration
International Islamic University Chittagong
Bangladesh.
e-mail:[email protected]
2) Nazamul HoqueAssistant Professor
Department of Business Administration
International Islamic University Chittagong
Bangladesh.
e-mail:[email protected]
3) Abdullahil Mamun
Assistant Professor
Department of Business Administration
International Islamic University Chittagong
Bangladesh.
e-mail:[email protected]
4) Manjur Rashad Masum
Lecturer
Department of Business Administration
University of Information Technology and Sciences
Bangladesh.
e-mail:[email protected]
Abstract
Public private partnership (PPP) is no more considered as a trial and error concept rather it is
applied widely around the world as a tested and successful means in facilitating the delivery of
high quality goods and services. But the efficient utilization of PPP is a challenging job. In this
paper a thorough review and evaluation has been done on the experiences of PPP of different
developed and developing countries of the world in order to identify the critical factors of PPP to
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provide necessary guidelines to the key stakeholders of Bangladesh considering its context with aview to accelerate the wheel of economy through proper utilization of different successful models
of PPP.
Key Words: Public Private Partnership, Bangladesh.
Introduction:
Public private partnership (PPP/P3) is getting
attention as an attractive field of research during the
last few decades (Jimnez and Pasquero, 2005)
because PPP is being considered as an alternative
institutional arrangements and modes of delivery of
public goods and services (Jamali, 2007, Wettenhall,
2003, Hodge & Greve,2005).The primary objective
of PPPs is to facilitate the delivery of high-quality
public facilities and services by the private sector
over an extended period of time at a cost that
represents value for money, whilst at the same time
transferring an appropriate level of risk to the private
sector (Lane and Gardiner, 2003). PPPs imply a sort
of collaboration to pursue common goals, while
leveraging joint resources and capitalizing on the
respective competences and strengths of the public
and private partners (Widdus,2001; Pongsiri, 2002;Nijkamp et al., 2002). PPPs can also work for a range
of infrastructures including transportation, water and
sewer services, solid waste disposal, municipal
parking, and social infrastructure such as schools,
hospitals, and other public buildings. These include
education, housing, health care, transportation, social
care and many other areas commonly associated with
the public sector (Grimsey and Lewis, 2002).
European Commission (2004), in its green paper on
PPPs, recognized some common elements of a PPP:
long duration cooperative relationship, complex
arrangement of shared funding and participants role
at different stages in the project and shared risk. Most
supposed PPPs in third world development do not
seem to meet this criterion. Donor agencies often
promote privatization and government subsidies to
private entrepreneurs in the name of building PPPs.
However, privatization and subsidies should not be
confused with PPPs (Mitchell-Weaver and Manning,
1991).
Indeed, though PPP was originally treated as a
derivative of the privatization movement, there is agrowing consensus today that PPP does not simply
mean the introduction of market mechanisms or the
privatization of public services. PPP is an
institutionalized form of cooperation of public and
private actors, who work together towards a joint
target on the basis of their own indigenous objectives
(Nijkamp et al., 2002). According to Jamali (2004),
Pongsiri (2002), Nijkamp et al., (2002) and Widdus
(2001), PPP is a sort of collaboration to pursue
common goals by leveraging joint resources and
capitalizing on the respective competences and
strengths of the public and private partners. Indeed,the nature of relationship between the public and
private sectors is seen on the dimension of five types
of activities namely- parallel activities, competitive
activities, complementary & collaborative activities
(Ravindran, 2002), and Contractual activities (Clifton
& Duffield, 2006). PPP is the collaboration in which
the public and private sectors both bring their
complementary skills to a project, with different
levels of involvement and responsibility, for the sake
of providing public services more efficiently
(Efficiency Unit, 2003b). It is a relationship thatconsists of shared and/or compatible objectives and
an acknowledged distribution of specific roles and
responsibilities among the participants which can be
formal or informal, contractual or voluntary, between
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Table 1: Probable Public-Private Relationship
Dimension 100% Public (1) (2) (3) (4) (5) (6) (7) 100% Private (8)
Control Public Public Public Public Private Private Private Private
Finance Public Public Private Private Public Public Private Private
Ownership Public Private Public Private Public Private Public Private
Source: Constructed by authors
The above table shows a probable set of relationshipbetween Public and Private on three dimensions
ranging from (100% Public) State-owned enterprise
to (100% Private) Privatization. So there exist six
options where public and private can share the
ownership, control and finance between them as a
form of Public private partnership (PPP/P3). It shows
a greater involvement of private may be possible for
option 4, 6& 7 (Dimensions taken from: Zarco-Jasso,
2005). Depending on the mode of entry, ultimateownership, risk sharing, and duration of the
partnership PPPs may take a wide range of
contractual forms that can be combined into four
main types: Greenfield, divestiture, concessions, and
management contracts (Glambotskaya et al., 2007).
Characteristics of Main types of PPP are (given in
table 2) as follows:
Table 2 : Characteristics of Main types of PPP
Types of PPP Acronym Modes of
Entry
Operation and
Maintenance
Investment Ultimate
Ownership
Market
Risk
Duration
(Years)
Build, Own and
Transfer
BOT Greenfield Private Private Semi-
private
Private 20-30
Build, Own,
Operate and
Transfer
BOOT Greenfield Private Private Semi-
private
Private 30+
Build, Own and
Operate
BOO Greenfield Private Private Private Private 30+
Build, Lease and
Own
BLO Greenfield Private Private Private Private 30+
Partial
Privatization
Divesture Private Private Private Private 30+
Full Privatization Divesture Private Private Private Private Indefinite
Rehabilitate,
Operate and
Transfer
ROT Concession Private Private Public Semi-
private
20-30
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Rehabilitate,Lease/ Rent and
Transfer
RLRT Concession Private Private Public More-private
20-30
Build,
Rehabilitate,
Operate and
Transfer
BROT Concession Private Private Public Private 20-30
Management
Contract
Contract Private Public Public Public 3-5
Leasing Contract Private Public Public Semi-
private
8-15
Source: Glambotskaya et al. (2007)
PPP can be a good tool for developing sustainable
infrastructure and thereby ensuring and accelerating
the wheel of economy of Bangladesh. Access to
electricity, improved sanitation facilities, telephone
subscribers are 20%, 36% and 14% respectively all
the indicators are below the South Asia Average
according to comparative infrastructure indicators
(World Bank Database, 2011). The current rate of
investment is much lower (24.5%) than the required
rate (around 35%-40%) the government seeks and
what is necessary for Bangladesh to meet its goals(Bangladesh Gadget, 2010; Mamun, Islam 2010).
Situation has worsened in recent years, with the
decline in availability of private sector investment for
infrastructure (World Bank, 2013). Therefore, this
paper is an effort to point out the interesting lessons
for Bangladesh from the experiences of different
countries around the globe considering the context of
Bangladesh. Different critical success factors of PPP
are identified so that Bangladesh can successfully
implement with a view to maximize the benefits from
PPP. While writing the paper, the researchers have
reviewed available published articles, case studies,reports, conference papers, archival records and
books regarding Public Private Partnerships
experiences of different developed and developing
countries of the world.
Public Private Partnership: World Experiences
Various forms of PPP have been implemented in
countries of the European Union, Australia Central
America, North America, South East Asia and Africa
for over 30 years. Between 1990 and 2009 more than
1300 PPP contracts were signed in the EU,
representing a capital value of more than EUR 250
billion. This includes roughly 350 new projects with
a value of almost EUR 70 billion having reached
financial close since the beginning of 2007 (EuropeanInvestment Bank,2010).
Table-3 provides a picture of infrastructure projects
in different region by primary sector. Projects include
management or lease contracts, concessions,
greenfield projects, and divestitures. The database
contains almost 5,000 projects dating from 1984 to
2011.
Table-4 provides a description of infrastructure
projects in low- and middle-income countries byprimary sector. Projects include management or lease
contracts, concessions, greenfield projects, and
divestitures. The database contains almost 5,000
projects dating from 1984 to 2011.
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Source:WorldBank PPI database, 2013
China, India, Brazil and Russian federation are
holding the 1st, 2nd, 3rd and 4th position respectively
considering the number of PPP projects during 1984-
2011. On the other hand Brazil India, Russian
federation and China are holding the 1st , 2nd , 3rd and
4th position with respect to total investment (US$
million) in PPP projects during the same period
(World Bank PPI data base, 2013).
The government defines success for PPP projects as
being built on time and within budget (Nick Sciulli,2008). A successful PPP is one thatprovides theservices the government needs, offers value for
money as measured against public service provision
(where value for money is measured by the net
present value of lifetime costs, including the cost of
risk bearing)and complies with general standards of
good governance and specific government policy
such asIs procured with transparent and competitive
procurement being fiscally prudent complying
with the legal and regulatory regimes that apply to
the industry in which the PPP will exist. (World
Bank, 2007). PPPs therefore should not be expected
to substitute for action or responsibilities that
properly rest elsewhere. In particular, the public
sector should continue to set standards and monitor
product safety, efficacy, and quality and establish
systems whereby citizens have adequate access to the
products and services they need. (Jamali, 2004) In
Table 4 : infrastructure projects in low- and middle-income countries by primary sector
Featured Indicator,
(1990-2011) Energy Telecom Transport Water and
sewerage
Number of countries
with private
participation
107 135 86 62
Projects reaching
financial closure2283 822 1371 762
Region with largest
investment share
Latin America and
the Caribbean (35%)
Latin America
and the Caribbean
(37%)
Latin America
and the Caribbean
(40%)
East Asia and
Pacific (46%)
Type of PPI with
largest share in
investment
Greenfield project
(65%)
Greenfield project
(60%)Concession (55%) Concession (60%)
Type of PPI with
largest share in
projects
Greenfield project
(72%)
Greenfield project
(74%)Concession (57%)
Greenfield project
(42%)
Projects cancelled or
under distress
117
representing 5% of
total investment
59
representing 3%
of total
investment
77
representing 6%
of total
investment
63
representing 32%
of total
investment
http://ppi.worldbank.org/explore/ppi_exploreRegion.aspx?regionIDhttp://ppi.worldbank.org/explore/ppi_exploreRegion.aspx?regionIDhttp://ppi.worldbank.org/explore/ppi_exploreRegion.aspx?regionIDhttp://ppi.worldbank.org/explore/ppi_exploreRegion.aspx?regionID -
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of almost double the average available in the marketand more than triple the cheapest alternative at a rate
of return of 30 per cent. This rate can be compared to
the 3 per cent return state-owned power agencies aim
for in India. (Palast, Oppenheim, and MacGregor,
2003).
Enron was in the water business for only three years,
through an entity called Azurix that it created in
1998, operated in Buenos Aires, Ghana and Canada-
was fined for frequent interruptions, releasing
untreated effluent, and exceeding allowed effluent
levels, suspicions of corruption , severe violations of
environmental law etc.(Public Citizen,2002).
Metronet represents a recent, and very big,
infrastructure PPP failure. It was divided into two
PPPs (BCV and SSL), the London underground P3s
are collectively known as Metronet was a 15.7
billion P3, signed in 2003 and personally championed
by the then Chancellor of the Exchequer, Gordon
Brown, collapsed in 2007. Various problems like
goal conflict, risk sharing and higher debt to equity
ratio prevail there. Most importantly, there existed
five giant equity participants as well as supplier ofthe project who transfer their risk to another stand-
alone corporation owned by the other four equity
partners- make it harder to assign responsibility
(Vining and Boardman, 2008).
There exist many other examples of PPP failure
including Rio Light Company in Rio De Janeiro,
Brazil. Reports of corruption, fail to meet the public
interest, Job cut, price hike, cancellation of contract,
bribery, hearing, punishment etc. are common
phenomenon in not only private power sector but also
in water projects surfaced in Indonesia, India,
Pakistan, Uganda, Lesotho, Guinea, Argentina, SouthAfrica, Germany, Turkey, England, Czech Republic,
Hungary and Poland and Peru by renowned
companies working in PPP project around the World.
(Palast, Oppenheim, and MacGregor, 2003). Backer(2003), sees Enron as a PPP, demonstrates the danger
of loosing control of public regulators over private
sector. Many transnational private utilities are larger
than most national economies (Beaulieu, 2003).
Indias unhappy experience with Enron and Bechtel
illustrates, the odds are much longer in the
developing world that public-private partnerships will
result in benefits to the public. (Oppenheim and
MacGregor, 2004). This stream of literature generally
indicates that partnerships are high-risk strategies,
particularly at the level of implementation; however,
the advantages and/or mutual benefits, when
successful, by far outweigh the risks involved
(Hagen, 2002; Horton, 1998).
Critical Factors of Public Private Partnership
Development
Ibrahim, Price and Dainty (2006) identified sixty-one
PPP risk factors from literature and classified into
exogenous and endogenous risks. They focused on
three most important PPP risk factors in Nigeria,
thats are unstable government, inadequate
experience in PPP and availability of finance thatare most relevant to Bangladesh perspective. Those
critical factors are related to development and
implementation of PPP. Those factors are given
bellow along with the researchers.
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Public Private Partnership in Bangladesh:Though not so rich, Bangladesh has experiences of
PPP, especially in respect of the scope and diversity
of Non-Government Organization (NGO) activities in
social services. (Bhattacharya, Rahman, 2010). But
the scenario of PPP in primary project is not up to
required level. The Government through its national
budget FY 2009-10 introduced the concept of PPP
budget and the new industrial policy 2010 also
reflects the governments intention for rapid
industrialization through Public Private Partnerships
(Bhattacharya, Iqbal & Khan, 2009). Implementation
and funding of infrastructure development projects is
a long drawn process and investment risk is much
higher, the investment is not, in many cases,
commercially viable (Hodge and Greve, 2009). As a
heavily populated country with a population of
around 150 million living on a land area of 147570
square kilometer, Bangladeshs economy is
dependent mainly on agriculture, which accounts for
around 18.43% of GDP, but provides employment to
as much as 47.3% of the countrys labor force
(Bangladesh Bureau of Statistics, 2010). Due to
unfavorable land-man ratio and the under-developed
state of the countrys agriculture sector, the key to thegeneration of productive employment lies in strong
economic growth through the structural
transformation of the economy away from agriculture
and toward industry (Bhuyan, 2005). There are three
major options for infrastructure delivery (although
each has many variations): direct public provision,
contracting-out (i.e., design, build, transfer), or
publicprivate partnerships (P3s) (Vining and
Boardman, 2008). A new way for Bangladesh need to
improve for its infrastructure development keeping in
mind the governments low capability to finance its
immediate infrastructure like power, health, energy
etc. And public-private partnerships (PPP) may be a
solution basing on the experience of foreign
countries.
Indeed, Bangladesh has a very few PPP projects in all
the primary sectors. Projects include 38 Greenfield
projects, 5 management or lease contracts and 3
divestitures containing almost 46 projects dating
from 1990 to 2011. The snapshot of are given
(table:6) bellow-
Table 6 : Infrastructure projects in Bangladesh under PublicPrivate
initiative (PFI) during 1990-2011
Sector Sub-Sector Number of Projects Total
Investment
(US$ million)
Energy Electricity 28 1,688
Natural Gas 1 31
Total Energy 29 (Green field 26,
Divestiture 3 )
1,719
Telecom Telecom 12 6,593
Total Telecom 12 (Greenfield 12) 6,593
Transport Airports 1 0
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Roads 2 0Seaports 2 0
Total Transport 5 (Management
Contracts 5 )
0
Water
and
Sewerage
- - -
Total 46 8,312
Source: World Bank PPI database, 2013
It is difficult to attract private investment in all
projects. Through the Public-Private Partnership
(PPP) initiatives, a recently introduced innovative
scheme, government involves the private sector to
meet the probable investment gap in infrastructure
development, especially power and energy;
telecommunication and port development have been
given the highest priority, which will provide a boost
to every sector of the economy Using some proven
schemes such as Public Private Partnership
(PPP/P3s) to provide the basic infrastructure is
essential for countries like Bangladesh to generate
required investment to meet the millenniumdevelopment goals (Mamun & Islam, 2010). As small
taxing powers against GDP (10%, 2008-2012),
(World Bank, 2013) and inefficient scale in both
technical expertise and risk assessment, Government
of Bangladesh requires minimizing the infrastructure
deficit where P3 can be a significant alternative.
On the other hand, Tillmann, Robert and Wang
(2007) compared the levels of perceived risks versus
the PPP opportunities and show that while Cambodia,
Bangladesh, and Pakistan are perceived most risky
and promising least PPP opportunities, Indonesia,
China, India, and Thailand are also perceived
relatively risky put promise comparatively high-PPP
opportunities. The least exposed to political risks are
the matured economies of Korea, Japan and
Singapore and they rank middle regarding PPP
opportunities.
PPP activities/Infrastructure in Bangladesh:
The Infrastructure Investment Facilitation Center
(IIFC) was established in 1999 to promote and
facilitate private sector participation in infrastructure
in Bangladesh. IIFC was established to have a policy
role and a transaction advisory role, and to adviseboth the public and private sectors. Another
institution, the Infrastructure Development Company
Ltd (IDCOL) was established concurrently with IIFC
to provide government debt financing for
infrastructure projects. IIFC and IDCOL are
government-owned, limited liability companies. They
were established with financial support from The
World Bank, and other donors. IIFC, in particular,
received support in the form of consulting services
sponsored by the Canadian International
Development Agency (CIDA), and Department for
International Development (DfID), UK support
(World Bank ,2009).
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Table 8 : Comparison among the Large ,medium and small PPPs related policies and strategies of Bangladesh Phase Required weeks
Large Project
( Above BDT 2.5 Billion )
Medium Project (Between
BDT 2.5 billion-BDT 500
million)
Small Project (Below BDT
500 million )
Project
Identification
On-going On-going On-going
In-principle
Approval
24 weeks 24 weeks 24 weeks
Feasibility Study 820 weeks 612 weeks 48 weeks
Request for
Qualification
48 weeks 48 weeks -
Request for
Proposal (RFQ),
812 weeks 610 weeks 48 weeks
Negotiation and
Contract award
48 weeks 48 weeks 48 weeks
Other Comparisons
Project
Identification by
Line Ministry, Implementing
Agency, Office of PPP (PPPO)
Private Investor
Line Ministry, Implementing
Agency, Office of PPP
(PPPO) Private Investor
Line Ministry, statutory
authorities and other entities
under its administrative
control; Implementing
Agency, Office of PPP
(PPPO) ,Private InvestorPre-Feasibility
Study
Pre-Feasibility Study by PPPO
for each project
Pre-Feasibility Study by
PPPO for each project
Private investor may submit
unsolicited proposal with
Pre-Feasibility Study by
Unsolicited
proposal
If the RFQ is based on an
unsolicited proposal the
initiator of the said proposal
will be treated as automatically
pre-qualified.
If the RFQ is based on an
unsolicited proposal the
initiator of the said proposal
will be treated as
automatically pre-qualified.
No need to call for RFQ.
Line ministry and
implementing agency
directly issues RFP.
In-principle
approval by
Cabinet Committee on
Economic Affairs (CCEA)
Cabinet Committee on
Economic Affairs (CCEA)
Line minister
Request for
qualification
requirement
Line Ministry/implementing
agency calls for RFQ.
Line Ministry/ implementing
agency calls for RFQ.
The line Ministry/
implementing agency issues
RFP, with appropriate
modifications by the Office
for PPP, if required, to the
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shortlisted private investors.No need to call for RFQ.
Technical
effectiveness
The relevant Qualification and
Tender Evaluation Committee
(QTEC) evaluates the
investors proposals based on
the technical responsiveness
criteria and screens out the
non-responsive proposals.
The relevant Qualification
and Tender Evaluation
Committee (QTEC)
evaluates the investors
proposals based on the
technical responsiveness
criteria and screens out the
non-responsive proposals
.The private investor, whose
proposal went for RFP,
qualifies automatically for
technical responsiveness.
The relevant Qualification
and Tender Evaluation
Committee (QTEC)
evaluates the investors
proposals based on the
technical responsiveness
criteria and screens out the
non-responsive proposals
.The private investor, whose
proposal went for RFP,
qualifies automatically for
technical responsiveness.
After vetting by
Legislative and
Parliamentary
Affairs Division
line ministry/
implementing
agency seeks
approval of
Cabinet Committee on
Economic Affairs (CCEA)
Finance minister Line Minister
Final approval by Cabinet Committee on
Economic Affairs (CCEA)
Finance Minister Line minister
Source: PPP documents, 2010, Ministry of Finance, Bangladesh
The relationship among Office of PPP (PPPO),
Cabinet Committee on Economic Affairs (CCEA),
Parliamentary Affairs Division (PADs), line ministry/
implementing agency are complex, bureaucratic and
sometimes vague. Most critical part of a PPP
documents (Detailed feasibility study, Request for
qualification, request for proposal etc.) is to be
written by consultant, but their selection requirements
is not clearly mentioned at the policy and strategy
paper 2010.
Few Infrastructure related projects Bangladesh has
taken under PPP are: Grameen Phone Network
Expansion Project, Pacific Telecom Network
Expansion Project, Ranks Tel PSTN Project, DNS
Satcomm Satellite Earth Station Project, BanglaTrac
International Communication Gateway Project, M &
H Telecom Interconnection Exchange Project, and
Shoanchalok ICT Programme (Hasan, 2012). Their
service and performance are yet to evaluate. Some
other PPP projects in Bangladesh include-
Automation of Railway reservation and Ticketing
System, Land records, Higher educational institution
admission, Results of public examination , Foreign
and local investment related information,
Government forms, and Payment of utility bills.
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Among the identified services, results of publicexams, government forms and payment of utility bills
were implemented successfully and scaled up.
A latest PPP project, Build-Own-Operate and
Transfer (BOOT) model, without GOB Finance
Chittagong Custom House Automation Project
partnering with Data-soft to double the revenue, to
reduce cost of doing Business by at least 70% , to
save customs processing time by 80% has taken by
Bangladesh (Hossain, Deb, & Al Amin,2009).
Because of successful automation solutions provided
by DataSoft, the 42 steps lengthy process has been
curtail to only 6 steps, bill of entry cost reduced BDT
180 to BDT 50, Cargo Handling, Auction, Banking
everything came under the automatic solutions.
Stakeholders including BGMEA, Importer &
Exporter, Off Dock, EPZ, Shipping Agents, NBR,
Custom Intelligence, Custom Bond, Freight
Forwarders, Navy, C & F Agents, PSI and all other
related stakeholders have came under the system of
Chittagong Custom House Automation Project
(Datasoft,2013).
Problems of Public private partnership developmentin Bangladesh are varied. Government has taken
huge initiatives and budgets. But there exist lack of
harmony, strong political will, political stability,
private sectors awareness, transparency, law andorder situation, social awareness regarding their
demand ,right & democracy and private sectors
intentions of taking risk etc. that impede the way
forward to reduce the infrastructure gap. From the
beginning the Padma bridge negotiation has been
involved to corruption and conspiracy. The World
Bank stated that they found, "credible evidence
corroborated by a variety of sources which points to a
high-level corruption conspiracy among Bangladeshi
government officials, SNC-Lavalin executives, and
private individuals in connection with the Padma
Multipurpose Bridge Project (World Bank, 2012).
For the corruption, the World Bank turned down to
sanction the proposed loan for constructing the
bridge. In these circumstances World Bank imposed
some conditions to continue the loan talk with the
government. Bhuyan, (2011) proposes transparent
mechanism and well-defined rules for participating in
and mobilizing funds for the PPP projects by
commercial banks, specialized financial institutions,
and international financial institutions to extend
credit on easier credit terms and a healthy capital
market. Figure-1 depicts a flow chart of PPP projectdevelopment in Bangladesh from the data of Policy
and Strategy for Public-Private Partnership, 2010.
http://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/SNC-Lavalinhttp://en.wikipedia.org/wiki/SNC-Lavalinhttp://en.wikipedia.org/wiki/SNC-Lavalinhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/World_Bank -
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Figure 1: PPP process in Bangladesh
Source: Constructed by Authors
Phase # 01: Project Identification (On going) by
line ministry, office of PPP, private investor
Output of Request for Qualification(Evaluation report of short listed investors)
Phase # 02: In-principle Approval of PPP
project by CCEA
Output of Project Identification phase, (Both
Solicited and Unsolicited) pre-feasibility report
Stage: 02 Requests for Proposal
Stage: 01 Project Identification,
Formulation, Appraisal and Approval
Output of In-principle Approval of PPP project
(total in-principle approval list)
Phase # 03: Feasibility Study and Preparation of
documents by consultant panel, finance division
or Independent bidding process
Phase # 04: Request for Qualification (RFQ) by
line ministry, implementing agency, QTEC
Output of Feasibility Study and Preparation of
documents
Phase # 05: Line ministry/ implementing agencycall for Request for Proposal (RFQ), shortlisted by
Output of Monitoring and Evaluation
Periodic progress report by OPPP Monitoring and Evaluation report by line
Stage: 04 Monitoring and Evaluation
By line ministry/implementing agency and reports to officeof PPP taking key performance indicators as standard
Office of the PPP monitor compliance and reports to CCEA Principal Secretary, office of PPP and relevant ministry
resolve complexities etc.
Output of Request for Proposal (Evaluation r eport
containing shortlisted investors)
Phase # 06: Stage: 03 Negotiation and Contract award
Line ministry/ implementing agency negotiates with selectedbidder and send it for parliamentary affairs division (PAD)
for vetting
after vetting, seek approval from CCEA after approval Signs the contract by line
ministry/implementing agency
Output of Negotiation and Contract award
Vetting by parliamentary affairs division (PAD) Final Approval by CCEA Contract signed for implementation
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Conclusion and Policy implicationsIn conclusion it can be said that there are many PPP
development and success factors identified by many
researchers (Ibrahim, Price and Dainty , 2006 ;Vining
and Boardman, 2008; Esther Cheung, Albert P.C.
Chan, Stephen Kajewski, 2009; Di Lodovico,
1998;Pongsiri, 2002; Zouggari, 2002; Baker 2003
Wallin, 1997; Savas, 2000; Roseneau,2000; Widdus,
2001; Nijkamp et al., 2002; Spackman, 2002;
Scharle, 2002; Sussex, 2003;Zouggari, 2003; Jamali,
2004; Tillmann, Robert and Wang, 2007; Asia
Foundation , 2010) around the world out of which
many factors are also applicable to Bangladesh. That
includes but not limited to : (i) Hearty consultations
between the Public and private sector to start direct
dialogue on PPP, and to work out the specific issues
and recommendations, and operational implications
(ii) The operational mechanisms and procedural
guidelines should be worked out properly (iii) Legal
and regulatory issues in relation to PPP should be
sorted out (iv) Ensure effective representation of the
private sector in the PPP committees including the
Advisory Committee (v) Conduct policy research and
analysis on PPP issues and make recommendationsfor reform, and craft a PPP roadmap to be adopted by
the public and the private sector (vi) Ensure policies
and laws to enable PPP projects to continue
irrespective of changes in the political regime in the
country (vii) Avoid stand-alone private company and
make sure the proper allocation of risks among
parties (viii) Include different strategic partner like
The World Bank that may attract other development
partner of Bangladesh and give a favorable
environment for local private partners (ix) Activate a
proper stand against all sorts of Corruption &
nepotism and ensure transparent competitive biddingprocess (x) Integrate Corporate social responsibility
(CSR) fund of private and Annual Development
Program (ADP) Budget of Government to create a
non-profit ( social) PPP project that may
development the PPP environment. (xi) Convene aforum on PPP with participants from the private
sector, donors and civil society The scope of work of
the forum should include: (a) Promoting PPP in the
identified priority areas; (b) Assisting the government
in promoting good governance in PPP through open,
transparent, and participatory processes; (c) Assisting
the government in jumpstarting effective
implementation of five to six priority PPP projects
within the next six months in line with the PPP
guidelines; (d) Assisting the government in taking
forward necessary policy reform to promote effective
PPP; and (e) Assisting the government's PPP Unit in
developing a pipeline of bankable projects.
In fact, there is no single PPP model rather various
types of arrangements varying with regard to legal
status, governance, management, policy-setting
prerogatives, contributions and operational roles. For
the success, PPPs must begin with careful
groundwork and preparation, including a
comprehensive feasibility study and economic
evaluation for each potential partnership project. In
this respect, Bangladesh Government needs to build
its legal and regulatory capacity to effectively fosterand participate in PPPs (Jamali, 2004). Bangladesh as
a new entrant in PPP model of infrastructure and
service delivery has to consider the consequences of
previous PPP efforts in many developed and
developing countries. Many large corporate has as
much strength and evil background as to be cautious
regarding negotiation and contract awarding.
Arbitration procedure also has to be predetermined
and included in the contract document in
comprehensive manner. A vast PPP campaign and
assurance of political risk is the first task for
Bangladesh to ensure the effective participation ofPrivate sector. Proper training and skill development
of the public officials is necessary in this regard. A
centralized, corruption free, transparent and
competent PPP authority is compulsory for the
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ultimate infrastructure and service delivery throughPPP in Bangladesh. During the last 14 years
Bangladesh has developed many PPP policy paper,
but now this is time to develop a concrete single PPP
handbook that will facilitate all the PPP stakeholders.
Application of PPP model for developing
infrastructure of Bangladesh is in beginner level. So,
Bangladesh has an opportunity to grab late-mover
advantage here. Research works in this area in
Bangladesh context is relatively few and not well
addressed. Particular country issues need to be
focused more explicitly for Bangladesh. So, this is
an appropriate time to integrate the world experience
and apply such learning for the PPP development of
Bangladesh.
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