Conducive atmosphere vital for PPPs
They also said the private sector is keen to invest in priority sectors like communications, but several complications are obstructing the investment flow.
The speakers made the observations at a roundtable on “PPP in the context of Bangladesh’s infrastructure development strategy” at East West Media Group Ltd (EWMGL) conference room at Bashundhara Residential Area in the capital. The Daily Kaler Kantho, PPP Authority Bangladesh of Prime Minister’s Office and Watermark MCL, advertising agency, jointly organised the roundtable.
The speakers pointed out that several barriers including limited scopes for long-term investment by foreigners and lack of information are thwarting investment through PPPs. “It would be tough to expect large investment if those limitations are not removed,” they said.
They underscored the need for dynamism in the process to attract more investment from the private sector to expedite infrastructure development in the country.
The speakers said around $3 to $3.5 billons are currently being invested in the country’s infrastructure development sector per year, adding that the desired GDP rate would require having $9 billion investment for infrastructure development. “It is not possible to supply such huge money from the budget. The government should mobilise more investment from the private sector. Emphasising this need, the government has already enacted a law,” they said.
Public Private Partnership Authority CEO Syed Afsor H. Uddin presided over the roundtable moderated by Apex Footwear Ltd managing director Syed Nasim Manzur. Dr Shamsul Alam, member (senior secretary) of General Economics Division (GED) under the Planning Commission was the keynote speaker at the event.
Citing the example of Indonesia, Dr Shamsul Alam said some 4500-kilometer road has been constructed in the capital Jakarta through PPPs. He also suggested looking into the reasons behind the sluggish PPP trend in the country.
Dr Shamsul Alam said the private sector will play an important role in achieving the desired GDP growth. “Poverty alleviation is our main goal. For poverty alleviation, the targeted growth has to be achieved. Only social protection is not enough in eradicating the poverty from the country,” he added.
In the keynote speech, he said to meet the GDP targets, the level of domestic investment must go up by 5.5 percent to 34.4 percent of the GDP by 2020 FY. Much of the additional investment is projected to be secured from the private sector. It is estimated that the private sector’s contribution towards investment will need to be about 77.3 percent for the GDP targets to be met. In relation to the transport infrastructure sector, total investment will need to be increased from 1.6 percent of GDP (2015 FY) to 3 percent of GDP (2020 FY). The PPP investment will need to rise from 0.2 percent of GDP to 1 percent of GDP over the same period. In addition, significant investment will be needed to boost the power generation capacity.
Citing the example of Vietnam, President of Dhaka Chamber of Commerce and Industry Abul Kashem Khan said the country once lagged behind compared to Bangladesh, but the foreign direct investment in Vietnam is now much higher than Bangladesh.
He also stressed the need for large-scale investment to spur economic development in the country. “If there is a better road communication in the country, the transportation of goods will be easier. Besides, the economy of the country will advance further,” he said.
Public Private Partnership Authority CEO Syed Afsor H. Uddin said the PPPs will help Bangladesh expedite its development, although it is tough to achieve the success through PPP. “The PPP concept is new in Bangladesh. Many other countries are embracing the PPP initiatives. The government is hopeful about the future of PPP in Bangladesh,” he said.
Mutaul Trust Bank Ltd DMD Syed Rafiqul Haq said any foreign organisation has to complete a project in 15 years, but there are many projects that take more time.
BUET civil engineering department Professor Dr Md Shamsul Haque said when any foreign investor comes in Bangladesh for investment it seeks for relevant data and information, but lack of proper data collection will make it hard to help them get the data they need.
The roundtable was also addressed, among others, by Eastern Bank Limited Deputy Managing Director Ahmed Shaheen, Green Delta Capital Limited MD and CEO Md Rafiqul Islam, City Bank Capital Limited MD and CEO Ershad Hossain, IDLC Finance Limited’s head of corporate division Mesbah Uddin Ahmed, Standard Chartered Bangladesh’s MD of Global Banking and country head Naser Ejaz Bijoy, Daily Sun Executive Editor Shiabur Rahman and ATN Bangla Business editor Ismat Jerin Khan.