Tk3,500cr proposed for PPP projects

Lethal Covid-19 may cause a significant drop in the government's revenue generation, which may ultimately hamper public investments in infrastructure development.

So, the government has intended to attract private investments for this sector through the Public Private Partnership (PPP) mechanism.

The allocation for the matching fund to implement development projects under the PPP initiative has thus been proposed in the budget for fiscal year (FY) 2020-21 to increase by Tk500 crore to Tk3,500 crore.

Finance Minister AHM Mustafa Kamal, during the FY2020-21 budget placement in the parliament on Thursday, also proposed to continue the existing VAT exemption facility to PPP projects along with some other sectors.

He said six projects under the PPP are underway. To increase the number of PPP initiatives in improving the country's infrastructure, steps have been taken to amend the Bangladesh Public-Private Partnership Act, 2015.

Former finance minister Abdul Maal Abdul Muhith introduced the PPP system in the budget speech for FY2009-10 to fetch financing worth Tk196,000 crore for the next five years from the private sector (over Tk39,000 crore each year).

Bangladesh is facing a resource gap equivalent to $928.48 billion to achieve the Sustainable Development Goals by 2030, while around 5.6 percent of the gap would be filled through the PPP financing, according to a study of the general economic division of the Planning Commission.

Despite having no significant success in implementation of PPP projects but Mayor Hanif Flyover alone, the government continued allocation over Tk2,000 crore each fiscal year.

However, the government has an intention to implement about 30 percent of the infrastructure projects under the PPP mechanism.

In this regard, the Planning Commission has introduced a list of 61 projects to implement under the PPP arrangement.

The list contains 20 road and highway projects, including Dhaka-Chattogram highway, Dhaka bypass, Dhaka-Mymensingh highway, Gabtali-Nabinagar highway, Nabigagar-Manikgonj-Paturia highway, Tongi-Kaligonj-Ghorashal-Pachdona highway, Sylhet-Sunamganj-Netrokona-Mymensingh-Sherpur-Dewangonj-Gaibandha highway, Mirershorai-Cox's Bazar 4-lane marine drive and some others.

Among these, Dhaka Elevated Expressway, a 20-km road worth Tk8,940 crore, will connect Shahjalal International Airport to Kutubkhali of Dhaka-Chattogram highway.

The government is also intending to implement the next two metro rail projects, MRT Line-2 and MRT Line-4, under the PPP arrangement. It is also seeking Tk70,000 crore from the PPP to construct a circular rail line in Dhaka.

The railway has 15 projects to implement under the PPP, including some rest houses, motels, hospitals and shopping malls on their land.

Sultana Afroze, chief executive officer of the PPP office, told The Business Standard that five ministries and divisions will implement the 61 PPP projects.

"The government is seeking alternative sources of funding to recover from the Covid-19 crisis, and the PPP arrangement would help to achieve this purpose," she added.