the experiences of ppps in bangladesh june 19, 2013 and ... of... · bangladesh 7th five year plan...
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Presentation to The Hon’ble Prime Minister
June 19, 2013
PPP Office, Prime Minister’s Office
The Experiences of PPPs in Bangladesh
and the challenges and opportunities of
working with the private sector and
attracting private sector finance.
Linking Development Finance with the SDGs in the Asia Pacific
26-27 October, 2016. Bangkok, Thailand.
Md. Hasan SarwarDirector
PPP Authority (Prime Minister’s Office)
A Pioneering Health PPP Project
Haemodialysis
Centre at
NIKDU &
CMCH
Page 2
Discussion Topics
Background: Vision of the PPP program
Why has the PPP program been emphasised?Why was the PPP program revised?
1
PPP Program: Key Reforms (2009-2015)
When did government introduce partnership with Private Sector?What are the key changes introduced to PPP program?
2
PPP Project Pipeline Development
What is the impact of the reforms on the PPP Pipeline?
3
Delivery of PPP Authority Role and Remit
What has the PPPA worked on for the last 4 years?
4
Conclusions What is the long term prospects of PPP in Bangladesh?
5
Overview of Public Private Partnership in BangladeshPage 3 Strictly Confidential
Bangladesh 7th Five Year Plan (FY2016-2020)
“Accelerating Growth, Empowering Citizens”
SDG 7.4% 6.2%
Post 2015 targets
integrated
Annual Average
Growth
Reduction of head
count poverty ratio
12.9m
Additional Jobs
created
US$400bn(approx.)
77.3% $12.5bn
Total Investment
Requirement
Private Sector
Investment
Infrastructure
Financing
(annual)
1.8%
PPP
(%of GDP)
Targ
ets
Enab
lers
“Accelerating Growth, Empowering Citizens”
“To become a
middle income country by
2021
and a
developed country by 2041”
Government of Bangladesh 7th
Five Year Plan (published Dec
2015)
PPP Review MeetingPage 4
Bangladesh: Strong Fundamentals
Page 5
Area : 147,570 km2
GDP : USD 174 billion (FY 2015)
GDP Per Capita : USD 1314 (FY 2015)
Exports : USD 31.21 billion (FY2015)
Imports : USD 37.42 billon (FY2014)
FDI (Gross) : USD 1.59 billion (CY2014)
Forex. Reserve : USD 26.2 billion (August 2015)
Rating: : Ba3/BB- stable (April/May 2015)
Bangladesh: Location of Strategic
Importance
20 10 0 10 20
0-4
15-19
30-34
45-49
60-64
75-79
Bangladesh: Country Data Bangladesh: Demographic Dividend
Benefits
33
100
50 49.7533
Ch
ina
Ind
ia
Cam
bo
dia
Ban
glad
esh
Low Unit Labor Costs
(Percent of unit labor costs )
159m
15m
54m
91mBanglades
h
Cambodia
Myanmar
Vietnam
Population: Domestic
Market
Bangladesh: UNCTAD World Investment Report 2016
Page 6
Total FDI: $ 35100 million
Growth: 33.4%
Global Contribution 2%
Bangladesh: Location of Strategic
Importance
FDI in South Asian Countries (in $ million)
Country 2014 2015
Afghanistan 5.4 5.8
Bangladesh 155.1 223.5
Bhutan 3.2 1.2
India 3458.2 4420.8
Maldives 33.3 32.4
Nepal 3.0 5.1
Pakistan 186.5 86.5
Sri Lanka 89.4 68.1
Bangladesh
The SDGs and PPP
PPP
World (87%)
Africa (76%)
Asia
(98%)
Australia (79%)
Europe (98%)
North America
(73%)
South America
(92%)
PPP in the Global Context
*Source: PPP Office
research (2013)
More than 50 Multilateral &
Donor Agencies work with PPP
PPP Practicing Countries
Source:
Dialogic (2013)
BOT / DBFOM
BOO
BOOTLeases /
Affermage
O&M Contract
PFI / BOT Annuity
Overview of Public Private Partnership in BangladeshPage 8 Strictly Confidential
History of partnerships with private sector
Project Based Initiative
Sector Initiative
Program Initiative
Centrally Integrated Program Initiative
Up to 1995 1996 – 2004 2005 - 2009 2010 - On going
1996: Private
Sector Power
Generation
Policy
2004: Private
Sector
Infrastructure
Guidelines
2010: Strategy
and Policy for
PPP
Ph
ase
Po
licy
2010: Special
Power Act
Pro
ject
s Fertiliser JV
(e.g. KAFCO)
Health
(e.g. BIRDEM, Heart
Foundation
Power Projects
(e.g. Haripur 360MW
& Meghnaghat 450
MW power plants) Port Projects
(e.g. Teknaf Land Port)
Road Projects
(e.g. Hanif Flyover)
Power Projects
(e.g. RPCL 70MW)Multi-Sectoral
Projects
(e.g. Transport,
Port, Power, Health,
Zones, Civil
Accommodation,
Housing, Tourism)
2015: PPP Law
Overview of Public Private Partnership in BangladeshPage 9 Strictly Confidential
(1)
Screen
(2)
Expert Appt.
(3)
Feasibility
(4)
Structuring
(5)
Tender
(6)
Finance
(7)
Monitor
The PPP Process
Process applied for implementation of PPP projects
Overview of Public Private Partnership in BangladeshPage 10 Strictly Confidential
Pick projects suitable for PPP
Appoint subject matter experts
Ensure technical and commercial
viability
Ensure bankability of bid
documentation
Run efficient and transparent
bidding process
Meet conditions precedent for financial close
Monitor implementation;
apply lessons learnt
CCEA Approval
A New Framework for PPP: Key Reforms
Project Preparation
Capacity Development
Regulatory Changes
Institutional Changes
Financial Support
Centralised regulatory unit and program
champion
Streamlined approval and
integrated policy framework
Injection of targeted and catalytic funding
support
Public and private sector transaction execution capacity
enhancement
Structured process with expert support for
project development
Overview of Public Private Partnership in BangladeshPage 11 Strictly Confidential
Screening & Approving
Projects
Policy Development &
Enforcement
Appointing Transaction
Advisors
Expert Project Facilitation
Promotion & Marketing
Stakeholder Engagement
Donor Agency Engagement
Capacity Building
Monitoring and Reporting
PPP Authority: Delivery of Roles & Remit
PPP
Authority
Role
Promotion & Marketing
Capacity Building
Donor Agency Engagement
Screened & ApprovedOver 45 PPP Projects
Screening & Approving ProjectsMonitoring and Reporting
Stakeholder Engagement
Expert 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
Overview of Public Private Partnership in BangladeshPage 12 Strictly Confidential
PPP Awareness and Capacity Building Events: 2012 - 2016
Total
63 Events
(Covering over 4000
participants)
PPP Capacity Building
10 Events
(Approx. 300 Participants)
Tailored Training Program
20 Events
(Approx. 120 Participants)
Policy Level Consultations
10 Events
(Approx. 200 Participants)
PPP Awareness Seminar
23 Events
(Approx. 3500 Participants)
Overview of Public Private Partnership in BangladeshPage 13 Strictly Confidential
Provision of Targeted Financial Support
Overview of Public Private Partnership in BangladeshPage 14 Strictly Confidential
Technical Assistance Financing
Viability Gap Financing
Bangladesh Infrastructure
Financing FundFund
Objective
Agency
Support PPP project
development
Enhance financial viability of PPP
project
Provision of longer term
Financing
AmountTK 100 Crore
(Approx. $12m)
TK 400 Crore
(Approx. $50m)
TK 2500 Crore
(Approx. $315m)
PPP Office PPP Unit BIFFL
PPP Procurement Process and Target Timescales
Request for
Qualification
6 Months
Request for
Proposal
7 Months
Negotiation /
Vetting
2 Months
Final Approval
(CCEA)
2 Months
Contract Award
1 Month
Pro
cu
rem
en
t*(A
ppro
x12-
18
Mo
nth
s)
* Average Targeted Timescales
Request for
Proposal
7 Months
Negotiation /
Vetting
2 Months
Final Approval
(CCEA)
2 Months
Contract Award
1 MonthSingle Stage
Bidding
--------------Two Stage
Bidding
Project
Screening
1 Month
In-Principal
Approval
3 Month
Request TAF
Support
2 Month
Advisor
Appointment
6 Months
Feasibility and
Bid Docs
6 Months
Develo
pm
en
t*(A
ppro
x18
Month
s)
PPP Project Pipeline UpdatePage 15 1st Meeting of the Board of
Governors
PPP Project Pipeline UpdatePage 15 Round Table Discussion with
Banks
PPP Procurement Timescales Comparator
PPP Project Pipeline UpdatePage 16 1st Meeting of the Board of
Governors
Bangladesh
Single Stage Bid (target)
12Months
Two Stage Bid (target)
18Months
Kidney Dialysis
11Months
MonglaEconomic Zone
24Months
Kaliakor Hi Tec Park x 2
18Months
Dhaka Elevated Expressway
12+23Months
PPP Project Pipeline UpdatePage 16 Round Table Discussion with
Banks
Bangladesh PPP Program Summary
Procurement Contract Signed
* Estimated ** Approximately (Data as at May 2016) (excludes power sector PPP projects)
11 Projects
(US$1bn*)
8 Projects
(US$1.5bn**)
(including 1 project
under PSIG)
Project Development
12 Projects
(US$5bn*)
In Principle Approval
44 Projects
(US$14bn*)
7
17
3942 44
May 12 May 13 May 14 May 15 May 16
In Principle Approval(Number of Projects) 13
109
5 5
2
PPP Projects by Sector
PPP Review MeetingPage 17
Actions for Improving Interaction with the Private Sector
In-Principal
Approval
Advisor
Procurement
Advisor
Appointment
Preliminary
Findings
Project Listing(Website)
1 2
Project Profile(Website)
3
News Highlight (Website)
4
Project Pamphlet(Website &
Distribution)
Feasibility
Report
5
Registration of
Interest (Website,
Newspapers)
Procurement
Launch
6
RFQ and RFP(Website,
Newspapers)
(Marketing Sounding
& Investor Promotion
Meetings)
(Pre-bid Meeting)
Pro
ject
Info
rmati
on
Mark
et
Inte
rac
tio
n
Page 18
Rights, Duties
& Obligations
Dispute
ResolutionCompensationPerformance
Guarantee
Independent
EngineerProject
Implementation
Actions for Creating the Conditions for Investor Confidence
Developing PPP projects thoroughly prior to investment launch
Establishing a certain, clear and transparent
framework for engaging with Investors
Project Merits Technical
Viability
Outline Project
Design
Project
InterfacesSurveys
Land
acquisition
Resettlement
Requirements
Environmental
Impacts
Linked
Projects
Traffic
Demand
Management
Plans
Service Specs
and KPIs
Commercial
Delivery Model
Sourcing
Strategy
Market
Capacity
Financing
Sources
Payment
Mechanisms
Terms and
Conditions
Market
Sounding
Investor
Promotions
Pre-Bid
Meetings
PPP Law (Sep 2015)
Request for
Qualification
Request for
Proposal
Concession
Agreement
Land Access
Rights
Revenue
Sharing
Concession
PeriodForce Majeure TerminationChange in Law
Page 19
Mongla Jetty
Contract signed
Oboshor Health
Vetting complete
Sylhet Hi Tec Park
Vetting complete
ShoybalEntertnmt Vil.
Negotiation complete
Mirershorai EZ
Negotiation complete
Sreehatta EZ
Evaluation complete (but next steps to be
confirmed)
Air Traffic Control System
Evaluation On-going
Mirpur Housing
RFP On-going
Zakir Hussain Rd
RFP & contract finalised
Motel Upal
IFB finalised + contract drafted
Jhilmil ResidHousing
IFB + contract drafted
Dhaka By-Pass
RFP finalised + contract drafted
PPP Contract Award/Bidder Selection Target (2016/17)
Estimated project value over Tk13,000
Crore
Target10-12 PPP projects
PPP Review MeetingPage 20
Bangladesh PPP Act 2015
Completed
Procurement Guideline for PPP
Projects 2016
Complete
Guideline for Unsolicited
Proposals 2016
Complete
Office Order on VAT exemption
instructions
Complete
Standard Base TOR for TA Road
Sector
Complete
Standard Base TOR for TA
Housing Sector
Complete
MoU for PPP Financing
Partnership
To be signed
Standard Base RFQ for Private
Partners
Draft being piloted
Fiscal Incentives
SRO to be issued
Regulatory Incentives
Banking SRO to be issued
G2G Partnership Policy
Submitted for approval
National Priority Projects
Final draft to be issued
PPP Policy Update (2015-2016)
PPP Review MeetingPage 21
PPP Contacts Signed
PPP Projects
(1) Mayor Mohammad Hanif Flyover*
(* Developed under PSIG 2004)
(2) Dhaka Elevated Expressway
(3) Haemodialysis Centre at NIKDU
(4) Haemodialysis Centre at CMCH
(5) Kaliakor Hi-Tec Park (Lot 2 & 5)
(6) Kaliakor Hi-Tec Park (Lot 3)
(7) Mongla Economic Zone
(8) Mongla Jetty Project
Contract Signed Construction StartCommercial Operation
June 2005 June 2010
January 2015
October 2013
August 2015November 2016
(forecast)
June 2015
January 2015 August 2015November 2016
(forecast)
December 2013 (revised)
August 20152018
(forecast initial tranche)
August 2015
Mayor Mohammad Hanif Flyover Dhaka Elevated Expressway Haemodialysis CMCH
February 2016
October 2015
February 2016
August 2016
Detail design on-going
PPP Review MeetingPage 22
PPP Projects in Procurement
PPP Projects Sector Stage
(1) Oboshor Health Care for Elderly HealthEvaluation and legal vetting complete
(2) Sylhet Hi Tec Park ZoneEvaluation Complete and vetting complete
(3) Mirshorai Economic Zone Zone Evaluation and negotiation complete
(4) Entertainment Village at Shoybal TourismEvaluation and negotiation complete
(5) Kaliakor Hi Tec Part (Lot 4) ZoneEvaluation stage
(6) Affordable Housing at Mirpur
Civil Accom.Request for Proposal issued
(7) Air Traffic Control Systemat HSIA
TransportRequest for proposal evaluation on-going
(8) Mohakhali Hi Tec Park ZoneProcurement stage
(9) Srihatta Economic Zone Zone Evaluation complete – but discussion on next steps on-going
(10) Zakir Hussain Road Hotel TourismShortlisting of bidders of completed
(11 Dhaka Bypass (Joydebpurto Madanpur)
TransportShortlisting of bidders completed
PPP Review MeetingPage 23
* Based on information collated from implementing agencies and line ministries
PPP Projects Development: 2015 – 2016 (Indicative Timelines)
PPP Projects Sector
(1) Shantinagar Mawa Flyover Transport
(2) Chittagong Railway Station Commercial Development
Civil Accomod.
(3) Motel Upal Tourism
(4) Khanpur Inland River Port Transport
(5) Khulna Railway Station Commercial Development
Civil Accomod.
(6) Chittagong Railway Hospital Health
(7) Laldia Bulk Terminal Transport
(8) Dhaka Chittagong Access Controlled Highway
Transport
(9) Jhilil residential area Housing
(10) 5 Star standard hotel at Motel Sylhet
Tourism
(11) GEC MoreCivil Accomod.
(12) Jamalpur Zone Zone
Jul 15 Jan 16 Jul 16
Development
Development
Development
Development
Development
Development
Development
Development
Development
Development
Development
Development
PPP Review MeetingPage 24
PPP Regulatory Environment
Bangladesh PPP
LawSeptember 2015
TAF GuidelineJuly 2012
Procurement
Guidelines for PPPMay 2016
Guidelines for
PPP Projects
(repealed)August 2010
VGF GuidelineJuly 2012
PPP Screening
Manual
Standard PPP
Forms
(Project, TAF,
VGF)
Guide to PPP in
BangladeshCitizens CharterFund Operating
ProcedureMay 2016
Unsolicited
Proposals
GuidelineMay 2016
PPP Authority
OrganogramMay 2016
PPP Review MeetingPage 25
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
Overview of Public Private Partnership in BangladeshPage 26 Strictly Confidential
Challenges of working with the private sector
1. Assurance for safe investment.
2. Total tax and VAT exemption.
3. Public Finance.
4. All types of Clearance from one window.
5. Hassle free working environment
6. Availability of all types of logistics support.
Overview of Public Private Partnership in BangladeshPage 27
Opportunities of working with the private sector
1. Innovative.
2. More experience about project implementation.
3. Partners from around the world show interests.
Overview of Public Private Partnership in BangladeshPage 28
ধন্যবাদ
Bangladesh is growing, be a part of it.
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