THE country is yet to see a breakthrough in attracting investment under the PPP initiatives, although projects in diverse sectors of the economy involving nearly $18 billion obtained the go-ahead until last month. Out of a total 45 approved projects, only three — two large and one small — between foreign investors and the government ministries, had their contracts signed recently, a senior official in the public private partnership office under the PMO said, as per a report of a local daily.
The PPP office had completed appointment of advisers for at least 25 projects, detailed feasibility studies were undertaken against 12 projects and registration of interests against three projects were received so far from potential foreign investors. The three PPP projects, signed in recent months, are — Dhaka elevated expressway involving $1.2 billion, a haemodialysis centre at Chittagong Medical College Hospital costing $2.0 million and a haemodialysis centre at National Institute of Kidney Diseases and Urology for $1.0 million, sources at the PPP office said. The sources said another contract for establishing a hi-tech park in Kaliakoir with an estimated investment of $125 million would soon be signed between a foreign investor and the industries ministry.
Officials concerned at the PPP office said the country would see striking results from the new initiative of investment as nearly a dozen more large- and medium-sized projects had been in the pipeline for signing of contracts.
The reasons why the implementation of the projects are poor is because of lack of professionalism and undue political influence – both factors are the reason for the delay in approval and implementation of the projects. There are conceptual problems among ministry officials on PPP regulations which have further dampened progress. Also, approving projects without getting appraisal and pre-appraisal reports, as the Dhaka elevated expressway deal was approved, makes it doubly difficult for it to be implemented as no major financier will finance projects without any proper appraisal.
It should be too much to ask for politics to be left out of decision making, but unfortunately that will remain a dream. It should not, however, be too much to ask for that projects be properly appraised so that the financial and non-financial constraints make it a viable project. If this is not followed then no reputed financier will finance the project — their best hope will be to raise money from state banks, and if the project becomes financially unviable, then for it to be eventually subsidized by tax-payers money if the firm defaults in the future. These cases have happened in the past, and there should be no reason for them to occur in the future.
