PUBLIC Private Partnership (PPP) was considered as a new investment paradigm to develop a congenial business environment in FY 2009-10. The government then allocated some Tk 85 billion funds for implementing different schemes in that fiscal under PPP, but it is appalling that not a single penny was spent that year. The outcomes under PPP plans in the following years were also not favourable. We are therefore apprehensive about the concern that the business community expressed in a roundtable on PPP utilization in the capital on Saturday. A newspaper report on Sunday said, problems of land, power, electricity, infrastructure, legal complexity and poor monitoring are hindering the PPP investment in the country. The roundtable underscored the need for enacting the Public Private Partnership (PPP) Act immediately with a view to encouraging the business community for more investment under partnership with the government.
In last four years, the government has undertaken separate PPP projects in the annual development programmes. Apart from a couple of schemes, most of those have not been implemented ultimately. The government allocated Tk 30 billion in FY 2010-11, but failed to utilize it for the planned 15 projects. The government also failed to spend the Tk 30 billion outlay in FY 2011-12 budget despite the inclusion of 16 PPP projects in the development budget. Tk 25 billion was allocated in the FY 2012-13 for implementing 13 PPP projects. The unfortunate ground reality is that the government also failed this time due to underutilization of the proposed budget under PPP.
Why was there a failure to attract investors under the PPP ? The new investment model failed to become acceptable to the private investors due to some drawbacks. A research in this regard blamed corruption in the bidding process and absence of penalty for reneging on firm commitments as major hurdles. Faulty selection of projects and the incompetence of concessionaries that cause delay and poor quality in delivering outputs are also undermining the PPP. Experts also point out the lack of proper framework including institutional, legal and administrative barriers that are making PPP ineffective as a model. Another factor relates to the fear of public fund misappropriation by private parties for the PPP schemes. The government has also not been spared from this blame after the alleged corruption in the Padma Bridge construction. The private investors as well as the international financial institutions are uncertain about PPP as well due to the above reasons.
It is very natural therefore to ask on what basis the private sector will come forward to invest in those projects as the government undertakes schemes without any pre-feasibility or without preparing a detailed concept paper in the context of most PPP projects. We asked the government to detail out the types of investment facilities, financing gap, cost recovery and investment security facilities in the case of every specific project under PPP to attract investors. If these measures are not taken it will just be a misappropriation of public and private monies and also not be an attractive option to investors from home and abroad.
