It wasn't long ago that I used to go to Barisal by water transport, waiting for hours and the hassle of getting a suitable cabin for the long and tiresome journey ahead. Once in a while, when I used to visit the dock, I saw nothing but an overpopulated crowd, some even hanging barely at the edge with large bags ... I used to wonder “there is no doubt that these Bangladeshi travelers could be potential winners of Olympic gold medals if there was any such sport relating to maintaining balance.”
As irreverent as it may sound, the misery faced by these travelers was unthinkable -- until the Padma bridge was introduced, that is. Now, it takes roughly four hours to reach the south of Bangladesh, comfortably sitting in a cool bus.
Bangladesh is one of the fastest growing countries in terms of infrastructure development. In the last 10 years, Bangladesh has showcased immense growth in infrastructure development through several projects either funded solely by the government or with international loans. Some of the projects have even been completed through a Government to Government (G2G) model. But, as days pass by, a more sustainable model for ensuring exponential growth of infrastructure development is now increasingly being suggested by experts.
Public-Private Partnership (PPP) is a model of collaboration between the public sector and private sector to deliver public infrastructure and services. In Bangladesh, PPP is deemed essential due to its potential to address the country's infrastructure and development challenges by leveraging the private sector's expertise and investment. PPP can provide access to financing, technology, and management efficiency and can also increase competition, innovation, and accountability in the delivery of public services. Additionally, PPP can help mitigate the government's financial burden and promote economic growth and job creation.
In Bangladesh, implementing PPP projects has been limited, but it has gained momentum in recent years. The government has taken steps to improve the PPP framework, including the establishment of the PPP Authority and the introduction of a new PPP policy in 2016. Despite the interest, the implementation of PPP projects still faces multidimensional challenges, such as a lack of transparency and coordination, weak legal and regulatory framework, and limited capacity in the public and private sectors. Lack of awareness and improper understanding of a PPP framework is also a major cause for private parties with sufficient funding capability to get involved in any such project.
Although challenges still exist, some successful PPP projects have been implemented and are in the process of being implemented in Bangladesh, such as the Dhaka-Chittagong four-lane highway, the Ashuganj Power Station, and the Dhaka Elevated Expressway. These projects have demonstrated the potential benefits of PPP for the country's infrastructure and economic development.
The government has also taken steps to improve the legal and regulatory framework for PPPs, including establishing a PPP cell within the Ministry of Finance to provide technical support and development of a PPP manual to guide the implementation of PPP projects. Additionally, the government has launched several initiatives to promote PPP, such as the PPP Awareness Program and the PPP Capacity Building Program, which aim to increase the understanding & knowledge of PPP among stakeholders and to build capacity in the public and private sectors. Overall, the government's initiatives and interests in PPP demonstrate a commitment in leveraging private sector investment and expertise to address the country's infrastructure and development challenges for ensuring continuous economic growth and generation of employment.
The government expects that the private sector can be attracted to get into the PPP modality due to the potential for long-term returns on investment. The private sector in Bangladesh is interested in PPP projects that offer good investment opportunities and have a positive impact on the community. Projects that have a clear policy framework, adequate funding, and strong governance are likely to attract the interest of private sector companies in Bangladesh.
However, the private sector faces several challenges in participating in PPP projects in Bangladesh, such as a lack of transparency, weak legal and regulatory framework, and limited capacity in the public sector. The private sector also faces concerns about the risk of project delays, cost overruns, and the absence of clear and stable revenue streams.
Despite these challenges, some private sector companies have been actively involved in PPP projects in Bangladesh, such as the Dhaka-Chittagong four-lane highway, the Ashuganj Power Station, and the Dhaka Elevated Expressway. These projects have demonstrated the potential benefits of PPP for the private sector, including access to financing, technology, and management efficiency and the opportunity to participate in the development of the country's infrastructure and services.
Overall, the private sector's involvement and interest in PPP in Bangladesh reflect a growing recognition of the potential benefits of PPP for the country's infrastructure and economic development, as well as the private sector's role in supporting these efforts.
In Bangladesh, the implementation of PPP projects faces several supply chain related challenges, including:
• Lack of local suppliers -- the limited capacity of local suppliers to provide goods and services for PPP projects can lead to increased costs and project delays
• Weak procurement processes -- inefficient and opaque procurement processes can increase the risk of corruption and reduce the competitiveness of the bidding process
• Limited technology transfer -- the limited transfer of technology from foreign suppliers to local suppliers can reduce the competitiveness of local suppliers and limit the potential benefits of PPP projects for the local economy
• Inadequate infrastructure -- the inadequate transportation, communication, and energy infrastructure in Bangladesh can increase the cost and complexity of PPP projects
• Limited capacity in the public sector -- the limited ability of the public sector to manage and implement PPP projects can lead to project delays and reduced accountability
These challenges can impact the overall success and sustainability of PPP projects in Bangladesh and limit the potential benefits of PPP for the country's infrastructure and economic development. To overcome these challenges, the government and private sector must work together to improve the capacity of local suppliers, strengthen procurement processes, increase technology transfer, and address infrastructure constraints.
To support faster improvement in Public-Private Partnership (PPP) projects in Bangladesh, the government and private sector can embrace the following technologies:
• Digital procurement -- digital procurement platforms can improve the efficiency and transparency of the procurement process for PPP projects, reducing the risk of corruption and increasing the competitiveness of the bidding process
• Project management software -- project management software can help to improve the planning, monitoring, and evaluation of PPP projects, reducing the risk of project delays and cost overruns
• Blockchain technology -- Blockchain technology can provide a secure and transparent platform for the tracking and management of PPP projects, improving accountability and reducing the risk of corruption
• Artificial intelligence -- artificial intelligence can support the analysis and optimization of PPP projects, improving project design and implementation and reducing the risk of project delays and cost overruns
• Internet of Things (IoT) -- IoT technology can support the monitoring and management of PPP projects, providing real-time data and insights to improve project performance and reduce the risk of project delays and cost overruns
The adoption of these technologies can help to improve the efficiency, transparency, and sustainability of PPP projects in Bangladesh and to support the country's infrastructure and economic development.
In Bangladesh, there are several social projects that could be implemented through Public-Private Partnership (PPP) to support the country's economic growth, including:
• Education -- the development of schools, colleges, and universities through PPP can improve access to education and support the development of a skilled workforce, which is essential for economic growth
• Health care -- the development of hospitals, clinics, and other health care facilities through PPP can improve access to health care and support the health and well-being of the population, which is essential for economic growth
• Clean water and sanitation -- the provision of clean water and sanitation facilities through PPP can improve public health and support economic growth by reducing the risk of waterborne diseases and improving the overall quality of life
• Affordable housing -- the development of affordable housing through PPP can improve access to housing and support the growth of the construction sector, which is essential for economic growth
• Renewable energy -- the development of renewable energy projects through PPP can support the growth of the energy sector and reduce the country's dependence on fossil fuels, which is essential for economic growth
These social projects can have a positive impact on the economy by improving the quality of life for the population and supporting the growth of key sectors, such as education, health care, construction, and energy. The implementation of these projects through PPP can also help to leverage private sector investment and expertise to support the development of essential infrastructure and services in Bangladesh.
The increasing interest in PPP projects in Bangladesh is driven by the country's rapid economic growth, which has led to rising demand for better infrastructure and services. The private sector has a critical role to play in meeting this demand, and PPP projects are a vital tool for achieving this. With the support of the government and the private sector, PPP projects can play a key role in helping to improve the country's infrastructure and drive economic growth.
Mohammad Ashraful Islam Khan is Head of Supply Chain Advisory Services, Management Consulting, KPMG Bangladesh.
