The government has directed ministries and divisions to implement 30 percent of their investment projects under public-private partnership (PPP) for meeting the rising infrastructure investment demand.
The Prime Minister’s Office (PMO) has recently issued a letter to the planning commission, asking the latter to take effective steps through ADP policy in this connection, official sources said.
The directive came as part of the government initiatives to undertake and execute development projects through PPP alongside ADP in line with Vision 2021, 7th five-year plan and SDGs development plans.
Currently, the PPP initiatives of the government agencies have not gained the expected momentum even though there is direction for taking PPP projects in ADP formulation policy.
“A public-private joint initiative is needed to face the challenges as a developing nation. For this, the PPP initiatives should be leveraged to implement projects, especially those of infrastructure,” Planning Minister AHM Mustafa Kamal said.
“Otherwise, achieving sustainable development goals won’t be possible and, at the same time, facing challenges of being a developing country will be tough as well,” he added.
According to the 7th Five-year Plan, the country requires GDP’s 6 percent or nearly $15 billion investment in physical infrastructure and service sector a year to achieve the development goals set in Vision 2021 and Vision 2041.
Out of this required investment, the share of PPP has been estimated at GDP’s 1.8 percent or 4.5 billion a year, which is 30 percent of total investment in infrastructure and service sector.
Accordingly, ministries and divisions will have to take initiatives to implement their 30 percent investment projects through PPP, the PMO letter said.
The PMO also gave instructions for setting a PPP project implementation target in the ADP formulation policy of the commission as the current policy do not have any such target.
As part of its PPP boosting efforts, the government has enacted the PPP law and formulated procurement guidelines, guidelines for the unsolicited proposal and PPP project implementation policy 2017.
Besides providing PPP incentives, the government has recently decided to pick up new PPP model, ‘People Fast PPP’, which is expected to meet the challenges for achieving SDGs.
The decision came at the activity review meeting of Bangladesh Economic Zone Authority (BEZA), PPP authority and Bangladesh hi-tech park authority held in October last year.
In the meeting, the PPP authority chairman informed that the authority took initiative to undertake PPP projects in line with SDGs and considering public demands.
He also spoke of the new PPP model apart from stressing execution of 30 percent investment projects through PPP.
In view of this, the meeting decided to implement projects on PPP basis after collecting project lists from all the ministries and divisions.
Decision also came to exempt all duties, supplementary duties and VAT on import of re-exportable plants, machinery, equipment and spares, except for passenger vehicles to make PPP projects more attractive.
While calculating depreciation cost of PPP project resources, Income Tax Ordinance 1984 will be followed instead of conventional 2-10 percent depreciation calculation method, according to the meeting sources.