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Deep-sea port at Sonadia
PPP office expresses inability to raise its portion of fund
Published : Friday, 23 November 2012
Financial Express :: Financial Newspaper of Bangladesh
Jasim Khan
The government's plan to implement a large infrastructure project on the public private partnership (PPP) basis has suffered a serious blow as the PPP Office last month said it would be almost impossible for it to arrange the estimated US$ 766 million PPP fund out of the total $2.23 billion required for constructing a deep-sea port at Sonadia.
The shipping ministry last month held an inter-ministerial meeting where the CEO of the PPP Office, Syed Afsor H. Uddin, said, as estimated, construction of the proposed deep-sea port would cost $2.23 billion, the arrangement of which would be impossible under any PPP initiative at this moment.
When asked, whether the Tk 30.00 billion (3000 crore) set aside for PPP projects in the budget of the current fiscal year could be used for the project, Abul Bashar, Deputy Manager (Investment Promotion) at the PPP Office, told The Financial Express that the fund was not available for use.
"The Tk 30.00 billion fund is allocated for supporting PPP projects, not for implementation. Besides, the fund is only in paper. It has no physical existence," Bashar added.
The PPP Office did not get any fund from the government, though the office wrote several times to the Finance Ministry seeking such funds, he said.
Last month they sought a fund amounting to Tk 1 billion to facilitate development of 12 projects under a PPP initiative, which were approved by the cabinet committee on economic affairs (CCEA). But the ministry was yet to approve it, he added.
The CEO said according to the feasibility report prepared by the Pacific Consultants International (PCI), land acquisition, construction of breakwater, quay wall, dredging, cargo handling equipment and other infrastructure for the deep-sea port would cost $1.463 billion.
Another $ 559 million US dollars would be required for constructing rail and road links and $766 million for constructing a terminal under the PPP. But no fund could be arranged under the PPP.
The PPP office made efforts to arrange the PPP portion of the fund, but it failed.
In the 2012-2013 budget, the government allocated Tk 30.00 billion against 23 public-private partnership (PPP) projects, although it failed to make any use of such allocations over the last three years.
The government took the public-private partnership initiative more than three years ago to keep rolling its 'mega infrastructure projects' but the scheme has till now remained confined to paper work.
The government launched the PPP initiative in the fiscal 2009-10, allocating Tk 2,500 crore in the budget in a bid to involve the private sector in big infrastructure, power and energy projects.
But, despite the government's repeated commitments and efforts, not a single PPP project could be undertaken in the last three fiscal years.
The finance ministry officials said the PPP allocation of Tk 30.00 billion, which remained unutilised in the current fiscal, would be carried forward to the next budget.
The same thing happened in each of the last fiscal years-the government could not spend a buck-though the allocation stood at Tk 30.00 billion each time.
According to a finance ministry estimate, the investment share of the gross domestic product needs to be raised to 35 to 40 per cent from the existing 24 to 25 per cent.
The government alone cannot fill the investment gap in a short period. So the PPP initiative was mooted to create opportunities for the private sector so they can take part in public investments.
Two projects - the elevated expressway and the Jatrabari-Gulistan flyover-are being implemented under the PPP. But the projects had been taken up before the current PPP concept came into being.
However, implementation of some pilot projects will begin in the next financial year. 'Progress in project implementation under the PPP will be visible in 18 months,' he said.
At least six ministries will implement the selected pilot projects in sectors such as health, tourism, road, industry and housing.
The projects under the PPP are a hi-tech park at Kaliakair, grade separator on the Mirpur Road (Plassey-Gabtali), Hemayetpur-Singair-Aricha Road and Jatrabari-Sultana Kamal Bridge-Tarabo Road, Mirpur low-cost housing complex, a 40-bed haemodialysis centre at Chittagong Medical College Hospital, a dialysis centre at the National Institute of Kidney Diseases and Urology in Dhaka and upgradation of the Motel Upal as a tourist resort of international standard.
Experts found five hurdles to the public private partnership in implementation of projects in Bangladesh.
Fouzul Kabir Khan, a former power secretary, identified the hurdles as absence of meaningful competition, poor specification by the government due to corruption or lack of capacity, incompetent bidders who delay project implementation, absence of penalty for reneging on contracts, and corruption in bidding.
PPP office expresses inability to raise its portion of fund
Published : Friday, 23 November 2012
Financial Express :: Financial Newspaper of Bangladesh
Jasim Khan
The government's plan to implement a large infrastructure project on the public private partnership (PPP) basis has suffered a serious blow as the PPP Office last month said it would be almost impossible for it to arrange the estimated US$ 766 million PPP fund out of the total $2.23 billion required for constructing a deep-sea port at Sonadia.
The shipping ministry last month held an inter-ministerial meeting where the CEO of the PPP Office, Syed Afsor H. Uddin, said, as estimated, construction of the proposed deep-sea port would cost $2.23 billion, the arrangement of which would be impossible under any PPP initiative at this moment.
When asked, whether the Tk 30.00 billion (3000 crore) set aside for PPP projects in the budget of the current fiscal year could be used for the project, Abul Bashar, Deputy Manager (Investment Promotion) at the PPP Office, told The Financial Express that the fund was not available for use.
"The Tk 30.00 billion fund is allocated for supporting PPP projects, not for implementation. Besides, the fund is only in paper. It has no physical existence," Bashar added.
The PPP Office did not get any fund from the government, though the office wrote several times to the Finance Ministry seeking such funds, he said.
Last month they sought a fund amounting to Tk 1 billion to facilitate development of 12 projects under a PPP initiative, which were approved by the cabinet committee on economic affairs (CCEA). But the ministry was yet to approve it, he added.
The CEO said according to the feasibility report prepared by the Pacific Consultants International (PCI), land acquisition, construction of breakwater, quay wall, dredging, cargo handling equipment and other infrastructure for the deep-sea port would cost $1.463 billion.
Another $ 559 million US dollars would be required for constructing rail and road links and $766 million for constructing a terminal under the PPP. But no fund could be arranged under the PPP.
The PPP office made efforts to arrange the PPP portion of the fund, but it failed.
In the 2012-2013 budget, the government allocated Tk 30.00 billion against 23 public-private partnership (PPP) projects, although it failed to make any use of such allocations over the last three years.
The government took the public-private partnership initiative more than three years ago to keep rolling its 'mega infrastructure projects' but the scheme has till now remained confined to paper work.
The government launched the PPP initiative in the fiscal 2009-10, allocating Tk 2,500 crore in the budget in a bid to involve the private sector in big infrastructure, power and energy projects.
But, despite the government's repeated commitments and efforts, not a single PPP project could be undertaken in the last three fiscal years.
The finance ministry officials said the PPP allocation of Tk 30.00 billion, which remained unutilised in the current fiscal, would be carried forward to the next budget.
The same thing happened in each of the last fiscal years-the government could not spend a buck-though the allocation stood at Tk 30.00 billion each time.
According to a finance ministry estimate, the investment share of the gross domestic product needs to be raised to 35 to 40 per cent from the existing 24 to 25 per cent.
The government alone cannot fill the investment gap in a short period. So the PPP initiative was mooted to create opportunities for the private sector so they can take part in public investments.
Two projects - the elevated expressway and the Jatrabari-Gulistan flyover-are being implemented under the PPP. But the projects had been taken up before the current PPP concept came into being.
However, implementation of some pilot projects will begin in the next financial year. 'Progress in project implementation under the PPP will be visible in 18 months,' he said.
At least six ministries will implement the selected pilot projects in sectors such as health, tourism, road, industry and housing.
The projects under the PPP are a hi-tech park at Kaliakair, grade separator on the Mirpur Road (Plassey-Gabtali), Hemayetpur-Singair-Aricha Road and Jatrabari-Sultana Kamal Bridge-Tarabo Road, Mirpur low-cost housing complex, a 40-bed haemodialysis centre at Chittagong Medical College Hospital, a dialysis centre at the National Institute of Kidney Diseases and Urology in Dhaka and upgradation of the Motel Upal as a tourist resort of international standard.
Experts found five hurdles to the public private partnership in implementation of projects in Bangladesh.
Fouzul Kabir Khan, a former power secretary, identified the hurdles as absence of meaningful competition, poor specification by the government due to corruption or lack of capacity, incompetent bidders who delay project implementation, absence of penalty for reneging on contracts, and corruption in bidding.
... this BAL government has really screwed up everything ... they cant manage 1.2 Billion USD for Padma fund and now they are unable to arrange only 746 million USD for such an important project and allotted 30 billion Taka only in paper during budget which has no existence. This is nothing but fraud.
