Government has allocated Tk2,000 crore for Public-Private Partnership (PPP) projects in the new budget for the next fiscal year placed in parliament on Thursday.
The Finance Division had allocated Tk3,000 crore for PPP initiatives this fiscal year.
Finance Minister AMA Muhith in his budget speech said there had been little progress in PPP initiatives during the last six years.
He said: “There is no denying the fact that, initially, our procedural and institutional framework was not robust enough to take this agenda forward.”
The PPP Bill 2015 has been tabled in parliament to overcome existing problems.
In the new budget, 42 PPP projects have been approved in principle, of which agreements for three projects have been signed.
Two more agreements are ready to be signed and transaction advisers have been appointed for 24 more projects, Muhith said.
Private entrepreneurs’ unwillingness to invest is attributed to the lack of a PPP law and the government's failure to attract private investors, ministry officials said.
At the 2009 budget announcement, when PPP initiatives were first introduced, Muhith said the government alone would not be able to construct eduction institutions, specialised hospitals, highways, railways and big bridges without private sector cooperation.
At the time Muhith said the PPP initiative was being undertaken because the country needed Tk39,000 crore each year for infrastructure development and the government needed Tk1,96,000 crore for the next five years to achieve 8% growth.
At present, 11 PPP projects are being implemented. The first project was the Hanif Flyover, but local and foreign investors withdrew from the project. Later, state-owned banks provided funding for it.
In the outgoing fiscal year, the government carried forward the previous PPP allocation of Tk3,000 crore as there had been no significant disbursement of the FY2013-14 allocation.
The allocation for PPP projects has been reduced to Tk2,000 crore in the budget proposed for next year.
