The proposal from the Prime Minister’s Office (PMO) on the Public Private Partnership (PPP) Project along with some other recommendations made by the finance division will be placed today at the cabinet committee on public purchase.
Meanwhile, the finance division has recommended the government to fix a bonus system to evaluate an original innovative entrepreneur for its unsolicited proposal under Public Private Partnership (PPP) Project.
Former finance secretary Fazle Kabir came up with the suggestion soon after PMO had sought opinion about the PPP unsolicited proposals.
“Private innovators or creative entrepreneurs will get the benefits of tariff and duration of project implementation,” said Kabir.
As per the unsolicited proposal policy of the PPP projects, bonus and a Swiss Challenge of benefits will be given to the private innovators and creative entrepreneurs for the development of the country’s infrastructures.
According to the PMO’s proposal, a 5-10% bonus will be given to new or original entrepreneurs although it also noted that other tender bidders would be discouraged from participating in the tender if more bonus point is given to the new entrepreneurs.
Under the policy on unsolicited proposals, there are a total of 19 determining factors in three schedules, including two types of bonus and a Swiss Challenge process for dealing with the unsolicited proposals.
The Swiss approach is used in the Philippines, Taiwan, and various state governments in India. The main advantage of the Swiss challenge is that it is relatively easy to define, both in general and for each project. The original proponent’s “advantage” is based solely on the project bidding criteria and the bar is set by the competitive process. Since no further definition or negotiation is needed—of bonuses, bidding costs or returns—it does not create additional work for the government project team, nor provide room for subjective decision-making.
The government has allocated Tk257 crore for the project to be implemented under PPP in the fiscal year 2015. The PPP budget is 3.4% of the total allocations in physical infrastructures, which is set to get Tk7,550 crore.
The country’s first-ever PPP project was awarded to an Italian-Thai joint venture in 2010 for the construction work of the 21km long Expressway in 42 months with a cost of Tk8,703 crore.
Although the PPP Project was scheduled to be kicked off in July, 2011, the fate of the project is still hanging in the balance as the joint venture project has so far failed to secure the initial investment. The project is also now facing a problem over partial land acquisition.
In his budget speech the finance minister AMA Muhith said, “In order to attract private investment for infrastructure development, we will encourage implementation of projects through PPP.”
He said a total of 34 projects under six sectors had already been approved in principle and advisers or consultants had already been engaged in the 33 projects.
“This is the first step toward the implementation of the projects and it is expected that the PPP legislation would be placed at the parliament shortly,” said the minister in his budget speech.
The costs of the approved PPP projects are estimated to be Tk1,114 crore, mainly in transport, health, education and tourism sectors.
The construction of the Dhaka elevated expressway, jetties in Mongla Port, Hemodialysis Centre, a flyover from Shantinagar to Mawa Road via Buriganga river bridge and Dhaka-Ashulia Elevated Expressway are among the major PPP projects, which got approval.
The latest developments in the PPP are issuance of gazette notification of PPP policy and guidelines 2010, guidelines and scheme for using viability gap fund and establishment of PPP office under the Prime Minister’s Office.
