Role of Public Private Partnership in Infrastructure Development: Bangladesh Experience

Abstract

For win-win solution of public and private sector, Public Private Partnership (PPP) is increasing popularity in the field of international development cooperation and sustainable development. PPPs present a number of recognized advantages for the public sector to exploit. These include the ability to raise additional finance in an environment of budgetary restrictions, make the best use of private sector operational efficiencies to reduce cost and increase quality to the public and the ability to speed up infrastructure development. Successful PPPs are designed with careful attention to the context or the enabling environment within which the partnerships will be implemented. The growth of PPPs has in Bangladesh increased the availability of resources, the efficiency, and sustainability of public services especially in the field's infrastructure. In Bangladesh a number of barriers influencing the implementation of PPPs caused the diminishing interests of both local and foreign private investors. Reasons for implementing PPP in Bangladesh was ranked by the respondents included: shortage of government funding, economic development pressure of demanding more facilities, social pressure of poor public facilities, private incentive, and high quality service required. The purpose of this study is to assess the performance of the public sector in infrastructure project, to measure the costs of services and determine service quality, to explore environmental consideration of infrastructure project under PPP; and to investigate the barriers of implementing infrastructure projects under PPP in Bangladesh. The study shows, role of PPP in infrastructure development is accessing private capital and value for money, encourages innovations and incorporate lifecycle cost/realizing efficiency gains, significant cost savings, improving risk allocation and reduced time on projects delivery. Sixteenth KPIs of public sector were rated by the respondents and the good performances of public sector in infrastructure projects are land acquisition for infrastructure; exemption of taxes and import duties; linked project; addressing socioeconomic issues and legal dispute. On the other hand the poor performances of publicxiv sector are coordination; satisfaction level of private sector; environmental relationship and communications; cost sharing, financial incentive for private sector and operation and maintenance monitoring of PPP projects. To ensure customer satisfaction the main rewards from partner with the private sector are improvements of program performance, cost-efficiencies, better service provisions and appropriate allocation of risks and responsibilities increases the cost of providing services. In this study it is found that EIA has not yet evolved satisfactorily in Bangladesh. In most cases EIA being partially followed before starting infrastructure project under PPP. The barriers are categorized by using SLEEPT approach, that includes; social, legal, economic, environmental, political, and technological factors. Economic barrier is the most important barrier affecting infrastructure development under PPP followed by technological barrier, social barrier, political barrier, legal barrier and environmental barrier respectively as the most influential barriers to PPPs project implementation in Bangladesh. Therefore, recognition of the barriers and its elimination by the stakeholders in PPPs will allow the partnerships to function effectively and ensuring successful implementation of present and future PPPs.