Bangladesh moves to establish PPP framework

The South Asian nation is one step closer to having new PPP regulation.

The Finance Minister of Bangladesh, Abul Maal Abdul Muhith, has finally been able to push a law detailing the regulation of infrastructure public-private partnerships (PPP) in the country through the Cabinet of Bangladesh, completing a long-delayed step toward making the country attractive to private sector investment.

The Bangladeshi government first announced plans to approve a PPP budget framework back in 2010, as the 2004 Private Sector Infrastructure Guidelines were becoming outdated, according to a government budget summary. The government was most keen to attract investment in power generation, oil, gas and mineral exploration, telecommunications, ports, roads and highways, according to Al Amin Rahman, a partner at Bangladesh-based law firm FM Associates.

The law itself will still have to pass the Bangladesh parliament with some vetting, but if it does, it should provide more clarity in terms of land acquisitions and ownership for private infrastructure projects; the transfer of land between government ministries and to private developers; and the priority and allocation of funds for infrastructure projects, Rahman told Infrastructure Investor.

“The Government intends to go beyond the outdated public-private partnership plan and programme and establish premeditated, result-oriented efficient relationships which are evident in the recent policy and implementation initiatives,” Rahman said. “Realizing the demand for change, the present government’s election manifesto accorded the highest priority to infrastructure development.”

Bangladesh’s need for infrastructure is acute. The World Bank and the Asia Development Bank estimate that only 31 percent of Bangladeshis have access to electricity, and only 42 percent have access to piped water. FM Associates research has only found three PPPs, two of which are not complete, and the other – the Meghnaghat 450-megawatt power plant – having changed hands several times.

In the past, Bangladesh’s government has been inconsistent in both selection and implementation of PPP projects – the “government repeatedly changes its mind about picking out PPP projects every year and substitutes old ones with new ones,” Rahman said.

Corruption in the government is also a major obstacle that has caused many PPP projects to be delayed or even dropped altogether, he added. But Rahman hopes that once this law is passed, it will allow the country to better safeguard the interest of private investors, both local and foreign.