The government has decided to allocate only Tk2,000 crore for public -private partnership (PPP) initiatives in the next fiscal year as the private sector is reluctant to invest in infrastructure projects, official sources said.
The private entrepreneurs’ unwillingness to invest is attributed to the lack of enactment of PPP law and the government failure to attract private investors, they said.
The finance division allocated Tk3,000 crore for PPP initiatives in current fiscal year.
A big chunk of the amount went to Bangladesh Infrastructure Financing Fund (BIFF) for financing a series of infrastructure projects.
BIFF was established in early 2014-15 fiscal year for implementing PPP projects and was given an allocation of Tk2,500 crore.
PPP office has Tk100 crore for conducting technical surveys on projects.
Apart from this, Tk400 crore has been kept as a viability gap fund to inject money into the projects as required in view of national and public interests.
Recently, the National Economic Council approved 40 projects for implementation under the PPP programme in the next fiscal year.
In 2009 budget announcement when the PPP initiative was first introduced, Finance Minister AMA Muhith said the government alone would not be able to construct eduction institutions, specialised hospital, highway, railway and big bridges without private sector cooperation.
At that time Muhith said the PPP initiatives were taken as the country needs Tk39,000 crore each year for infrastructure development while the government needs Tk1,96,000 crore for the next five years to achieve 8% growth.
A source in the Finance Ministry said despite several announcements and initiatives, the government and the private sector have yet to make any big investment under the PPP projects over the last seven years.
At present, a total of 11 projects are being implemented under the PPP initiatives.
The first PPP project was Hanif Flyover, but local and foreign investors withdrew from the project. Later, the state-owned banks provided fund for it.
In last fiscal year, the government carried forward the previous allocation of Tk3,000 crore for PPP initiatives to this fiscal as there has been no significant disbursement of 2013-14 fiscal year fund.
Source: Dhaka Tribune