Presentation to The Hon’ble Prime Minister

June 19, 2013

PPP Office, Prime Minister’s Office

PPP Program (2009-2013):Achievements and

Deliverables

Foreign Investment in Bangladesh: Opportunities and ProspectsVenue: Hotel Ruposhi Bangla, Dhaka

Date: 29 March 2014

Syed A. H. UddinChief Executive Officer

PPP Office (Prime Minister’s Office)

Discussion Topics

Presentation March 29, 2014Page 2 Strictly Confidential

Background: Vision and International Perspective

Why was the PPP program launched? How widely used and supported is PPP internationally?

1

PPP Program: Key Deliverables (2009-2013)

What has been achieved since the launch of the PPP program?

2

PPP Project Pipeline Development (2011-2013)

How many projects have been developed for PPP implementation?

3

Delivery of PPP Office Role and Remit

What has the PPP Office worked on for the last 18 months?

4

Recommendations and Conclusions

What can be done to accelerate and increase scale of delivery?

5

Bangladesh: A Decade of Growth

0

20

40

60

80

100

120

140

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (F)

GDP

(USD

Bn)

GDP

Gro

wth

Rat

e

Bangladesh Economic Growth 2002-2011

GDP (RHS) GDP Growth Rate

Bangladesh has registered steady and consistent growth over the last 10 years ... Even during the

recent credit crunch

Manufacturing17%

Agriculture20%

Private Services

57%

Government6%

Composition of GDP

•Garment industry drives growth, yet only contributes to 14% to GDP

•Economic growth is underpinned by strong domestic demand, accounting for nearly 80% of GDP

Presentation March 29, 2014Page 3 Strictly Confidential

6th Five Year Plan: The Drive for the PPP Program

“The Government recognizes that strong public private partnerships can play a catalytic role in mobilizing additional resources as well as creating additional capacity & help for implementing public programs...accordingly, Government has put emphasis on PPP to ensure expeditious development of [public] services.”

- (Page 32), “Sixth Five Year Plan FY2011 – FY2015”

PPP is a key element of the 6th Five Year Plan to

deliver the infrastructure investments required to

deliver our target to become a Middle

Income Country by 2021.

0 1 2 3 40%

1%

2%

3%

4%

5%

6%

> Increase infrastructure investment from 2% to 6% of GDP> Target 77% investment from private sector

Public Invest-mentPrivate Invest-ment

Plan Year

Perc

enta

ge o

f GD

P

Sixth 5 Year Plan Infrastructure Target

Presentation March 29, 2014Page 4 Strictly Confidential

PPP: Targeted Outcomes and Benefits

Win-Win-Win Benefits:

a) Consumer: delivery of a services that people want and would not have access to at the same price, in a business as usual situation.

b) Government: fulfillment of a political need, social obligation, development imperative.

c) Private Sector: generate a profitable revenue stream and expand market access.

Targeted Outcomes:

1. Accelerating investments

2. Improved quality

3. Timely delivery

4. Reduced costs

5. Innovative solutions

The use of PPP for essential social and economic infrastructure will enhance the quality of

services and relieve the strain on the government budget

Presentation March 29, 2014Page 5 Strictly Confidential

World (87%)

Africa (76%)

Asia(98%)

Australia (79%)

Europe (98%)

North America

(73%)

South America

(92%)

PPP in the Global Context: Addressing Policy Continuity

*Source: PPP Office research (2013)

More than 50 Multilateral &

Donor Agencies work with PPP

PPP recognised and accepted globally as a crucial tool to aid

infrastructure development and public service delivery

PPP Practicing Countries

Presentation March 29, 2014Page 6 Strictly Confidential

A New Framework for PPP in Bangladesh

Government Policy: New framework established by the Policy and Strategy for Public Private Partnerships, 2010.Represents a fundamental re-think of how PPPs are to be pursued in Bangladesh

• Studied global best practices, success stories• Conducted critical analysis of what has worked and

what did not• Tailored approach for Bangladesh, accounting for

past experience, future goals

Conclusion: A complete overhaul of the institutional framework and how it operated, the approvals process, the project development approach , communications and marketing and the financing environment was a necessity to create the conditions for success.

Presentation March 29, 2014Page 7 Strictly Confidential

PPP Program: Key Deliverables 2009 - 2013

20122009

PPP Program Announced

(Jun 2009)

PPP Policy & Strategy Gazette

(Aug 2010)

WB IPFF Support to PPP

(Mar 2011)

ADP TA Program

(Apr 2011)

PPP Office Set Up

(Sep 2010)

Budgetary Support for

PPP

(Jun 2009)

2010 2011 2013

ice

CEO Appointed

(Jan 2012)

Stakeholder Consultation on PPP Doc

(Mar/Jun ‘12)

PPP Pilot Projects Initiative

(Mar 2012)

Finalize 11 Guidance & Model Docs

(Jul 2012)

PPP VGF Gazette

(Sep 2012

PPP TAF Gazette

(Jul 2012)

CCEA Approval of Screening

Manual(Jun 2013)

> 30 Capacity Building and Sensitization Courses

delivered to >1700 public and private sector

( On-going)

CCEA Approval of

PPP Law

(Jun 2013)

Engagement with Private Sector Stakeholders,

Chambers, Banks, NBFI and Investors( On-going)

Engagement with Donor Agencies for PPP Support: ADB, WB, IFC, DFID, IDB,

JICA, CIDA and SCE( On-going)

PPP Unit Established

(Jun 2011)

3.0 years 1.5 years

Development of Enabling Framework Development of Implementation Processes

Global PPP Investors

Conference

(Dec 2012)Significant increase in delivery of outputs over

the period 2009-2013

Presentation March 29, 2014Page 8 Strictly Confidential

The PPP Process

Process specified in government Policy and Strategy for PPP, 2010

Screen

Pre-Develop

Support

Tender

Finance

Monitor

Only pick projects suitable for PPP

Leverage Government resources to

prepare

Provide professional development

support backed by early stage funding

Prepare ALL docs and support upfront+ Robust bid process

Private sector arranges finance;

Govt provides info and supports to

help close financing

Monitor implementation; use

learning to inform policy/next projects

CCEA Approval

Presentation March 29, 2014Page 9 Strictly Confidential

PPP Project Pipeline Analysis 2011 - 2013

PPP Screening• Identification of project• Screening to confirm viability

CCEA Approval• In Principal Approval by CCEA / Line Minister

Project Development• Advisor Appointment• Feasibility Study & Bid Docs

Procurement• REOI, RFQ, RFP • Selection of Tenderer

Significant boost in Processing of PPP

Projects after PPP Office Operations

PPP

S

creening

CCEA In-P

rincip

le Appro

val

Advisor A

ppointment/D

FS

Procu

rement

0

10

20

30

40

50

60

05

2 1

107

3 2

34

1714

6

55

36

30

20

PPP Pipeline Trend Analysis 2011-2014

Jun-11 Jun-12 Jun-13 Jun-14 (forecast)

Num

ber

of P

PP P

roje

cts

Presentation March 29, 2014Page 10 Strictly Confidential

PPP Project Dashboard

Total34

Projects($12,573

m)

Medium Projects

6 Projects($110m)

Large Project25 Projects($12,455m)

Small Projects3 Projects

($7m)

PPP Projects by Size SL. Sectors Implementing Agency Name of the ProjectProject

SizeEstimated

Cost (US$m)

1 Road BD Bridge Authority Dhaka-Elevated Expressway Large $1,088

2 ICT BD Hi-tech Park Auth Hi-tech Park at Kaliakoir Large $125

3 Health DGHS 40 beds Hemodialysis Centre at CMCH Small $2

4 Health DGHS Hemodialysis Centre at NIKDU Small $1

5 Bridge BD Bridge Auth Dhaka-Ashulia Elevated Expressway Large $1,471

6 Road RAJUK Flyover - Santinagar to Mawa over Buriganga River Large $313

7 Port MPA 2 J etties at Mongla Port through PPP Large $50

8 Social Care DSS Oboshor: Senior Citizen Health Care Complex Medium $6

9 Road Roads & Highways Dept

Dhaka-Chitt agong Access Controlled Highway Large $1,585

10 Rail Bridge Bangladesh Railway Fulchhari Bahadurabad MG Railway Bridge Large $1,400

11 Rail Bridge Bangladesh Railway Dual gauge Double line Bangabandhu Bridge Large $1,000

12 Road Roads & Highways Dept

Dhaka Bypass 4 Lane (Joydevpur-Madanpur) Large $114

13 Tourism BD Parjatan Corp 5 Star Beach Hotel with 18-Hole Golf Course Large $125

14 Housing Nat Housing Assoc NHA Housing Satellite Project at Mirpur Large $57

15 Port CTG Port Authority Construction of Laldia Bulk Terminal Large $60

16 Bridge BD Bridge Authority 2nd Padma Multipurpose Bridge Paturia-Goalundo Large $1,902

17 Port CTG Port Authority 3rd Sea Port Large $1,200

18 Road Roads & Highways Dept

Jatrabari-Sultana Kamal Brdg-Tarabo PPP Rd Large $44

19 Road Roads & Highways Dept

Hemayetpur-Singair-Manikganj PPP Road Large $84

20 Housing RAJUK High–Rise Apartment Complex Purbachal Phase 1 Large $1,199

21 Airport CAAB Multi Mode Surveillance System (Radar) HSIA Medium $23

22 Health Bangladesh Railway Med College/Hospital Upgrade-Kamlapur Large $97

23 Health Bangladesh Railway Medical College/Hospital Upgrade- CRB Chitt agong Large $73

24 Health Bangladesh Railway Med College/Hospital Upgrade- Saidpur Nilphamary Large $73

25 Health Bangladesh Railway Med College/Hospital Upgrade-Paksey Pabna Large $73

26 Health Bangladesh Railway New Medical College & Hospital - Khulna Large $97

27 Rail Depot Bangladesh Railway New Inland Container Depot - Dhirasram Rail Station

Large $150

28 Port BIWTA I nland Container Terminal PPP-Khanpur Large $40

29 Tourism Bangladesh Railway 5 Star Hotel at Zakir Hossen Road, Chitt agong Large $36

30 Hospitality Bangladesh Railway Shoping Mall with Hotel-cum-Guest House in Khulna Medium $29

31 Hospitality Bangladesh Railway Shoping Mall with Hotelin Chitt agong Medium $11

32 LPG / Energy

BD Petroleum Corp LPG Bott ling Plant (Jett y, Pipelines) Kumira Medium $31

33 Hospitality MPA Mongla Port Tower Medium $10

34 Fisheries Dep of Livestock Serv 16 X Fisheries and Livestock Projects Small $4

PPP Projects Pipeline (Note: Project names have been shortened)

Note: (1) All figures are initial estimates and will be updated in project development & procurement phase.(2) Figures have been converted to US$ @ BDT80=US$1

Presentation March 29, 2014Page 11 Strictly Confidential

International Comparator: PPP Programs in Asia

Australia (1)

UK (2)

Korea Rep. (3)

Gujarat State (4)

India (5)

Japan (6)

China (7)

Phillipines (8)

Indonesia (9)

Thailand (10)

Bangladesh (11)

Pakistan (12)

Kazakhtsan (13)

Vietnam (14)

Mongolia (15)

Papua N. Guinea (16)

0.010.020.030.040.050.060.070.080.090.0

100.0

The 2011 Infrascope*: PPP Environment in Asia

Eval

uate

d Sc

ores

* Commissioned by ADB, Compiled by Economic Intelligence Unit (2011)

Benchmark Countries

Developed Asian Countries

Emerging Asian Countries

Nascent Asian Countries

Bangladesh(current estimate)

Presentation March 29, 2014Page 12 Strictly Confidential

Screening & Approving Projects

Policy Development & Enforcement

Appointing Transaction Advisors

Expert Project Facilita-tion

Promotion & Marketing

Stakeholder En-gagement

Donor Agency Engagement

Capacity Building

Monitoring and Reporting

PPP Office: Delivery of Roles & Remit

PPP Office Role

PPP Office has a wide multi discipline

based technical & commercial role

Screening Manual

Technical Assistance

Project Development

Financial Analysis

Safeguards System

Tendering Manual

Model Contracts

Policy Development

& Enforcement

Promotion & MarketingExpert Project Facilitation

Hemodialysis Centre at NIKDU & CMCH

Dhaka Ashulia Elev. Expressway

2 Jetties at Mongla Port through PPP

Flyover from Shantinagar to

Mawa

Upgrading Dhaka By Pass Road to 4

Lanes

Senior Citizen Health Care &

Hospitality

Mirpur Low Cost Housing Complex

Upgrading of Hemayatpur Singair

Manikganj

Capacity Building

Panel of Transaction Advisors

Donor Agency Engagement

Screened & Approved

34 PPP Projects

Screening & Approving ProjectsMonitoring and Reporting

Stakeholder Engagement

Presentation March 29, 2014Page 13 Strictly Confidential

Concluding Remarks

PPP – A universal model to support public finances

► With over 80% of the world applying PPP, it is a now a globally accepted model for supporting public finances in accelerating the development and improving the delivery of infrastructure and public services.

1CommentaryKey Messages

General acceptability of

PPP

2

Need for long term vision & commitment

3► PPPs programs require substantial reform and

capacity enhancement to ensure success over a longer time horizon.

► Sustained long term policy commitment is vital to provide platform for delivery and success.

► There is a strong acceptance and keen interest in PPPs across various stakeholder groups. This has been aided by use of PPP modalities since at least the 1990’s in different sectors (e.g. power, telecoms, ports).

Bangladesh PPP program to be

visible imminently

4 ► Significant development has taken place over the 1st 18 months of PPP Office operation.

► The result of all this detailed work will be visible imminently when 34 projects worth a combined $12.5bn are implemented.

PPP well placed for development

target

5 ► The PPP program is well placed to meet the transformation goals envisaged in our Millennium Development Goals and Vision 2021.

Presentation March 29, 2014Page 14 Strictly Confidential

Contact Details

Public Private Partnership Office(Prime Minister's Office)

Address: AIMS Tower (13th Floor)

51-52 MohakhaliDhaka-1212, Bangladesh

Phone: +88-02-9898530 E-mail: info@pppo.gov.bd

Fax: +88-02-9898511 Website: www.pppo.gov.bd

Presentation March 29, 2014Page 15 Strictly Confidential