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PPP Programme Update: Development and Challenges
Syed Afsor H. UddinPPP Authority
Prime Minister’s Office, Bangladesh
Seminar on ‘The Latest Development of the PPP Programme’
to Secretaries and Agency Heads
9 August, 2017Pan-Pacific, Dhaka
PPP in the context of the 7th Five Year Plan:
• Why have PPPs been emphasised in the 7th Five Year Plan?• What are the targets for PPPs?
Bangladesh 7th Five Year Plan (FY2016-2020)
“To become a middle income country by 2021
and a developed country by 2041”
SDG 7.4% 6.2%
Post 2015 targets integrated
Annual Average Growth
Reduction of head count poverty ratio
12.9m
Additional Jobs created
Targ
ets
PPP Programme Update: Development and ChallengesPage 3 Secretaries & Agency Heads Seminar
Meeting the PPP Investment Challenge
PPP investment targets in 7th Five Year Plan
0.8% Power Sector
1.8% of
GDP per year
1% transport
infrastructure
$3.8bn per annum
$2bn (transport infra)
$1.8bn (Power)
30% of infrastructure ADP must be
PPPs
PPP Programme Update: Development and ChallengesPage 4 Secretaries & Agency Heads Seminar
Development of the PPP Framework:
• What is the vision for PPPs?• What reforms have been introduced to develop the PPP
framework?• What has been the impact of the reforms?
Building the Foundations for PPP (2012-2017)
Regulatory Environment
Institutional Framework
Capacity Enhancement
Project Bankability
Key Pillars to Delivering a PPP Program
Long term Financing
Programme Approach
Attract private
investment in infrastructure
PPP Authority a facilitator (regulator)
Execution by Agencies / Ministries
PPP Vision
PPP Programme Update: Development and ChallengesPage 6 Secretaries & Agency Heads Seminar
Establishing a Sound Regulatory Framework
Issue Description Potential Impact
C1: A sound legal and regulatory framework
A regulatory framework that provides clarity over processes and procedures and ensures that private sector interest, rights, and investments will be protected from unfair treatment.
•Reduced interest from investors because of adverse perception•Uncertainty over processes•Delays in decision taking
Context in Bangladesh
Bangladesh PPP LawSeptember 2015
TAF GuidelineJuly 2012
Procurement Guidelines for PPP
May 2016
VGF GuidelineJuly 2012
Unsolicited Proposals GuidelineMay 2016
Standard PPP Forms(Project, TAF, VGF)
PPP Programme Update: Development and ChallengesPage 7 Secretaries & Agency Heads Seminar
Establishing a Centre of Excellence, Expertise and Champion
Issue Description Potential Impact
C2: A centre of excellence, expertise and champion
Establishment of PPP unit, to serve as a centre for PPP expertise is very important for building expertise, overseeing complex process of project development, engaging with external stakeholders, investors and financiers.
•Poorly prepared projects that are not bankable•Delays due to inefficient decision taking•Failure to standardise leading to inefficiencies•Un-coordinated marketing leading to inadequate investor promotion
Context in Bangladesh
PPP Authority
Role
• PPP Office operational in Jan 2012 under PPP Policy
• Estd. as PPP Authority under PPP Law 2015
• Board of Governors formed
PPP Programme Update: Development and ChallengesPage 8 Secretaries & Agency Heads Seminar
Detailed Project Viability and Implementation Assessment
Issue Description Potential Impact
C3: Conducting detailed feasibility study
Carrying out detailed assessment of the technical, environment, social, legal, commercial, and financial viability of the project; development of risk mitigation measures and putting in place and implementing a plan for delivering the project.
•Lack of buy-in to process PPP projects•Delays in developing projects• Inadequately designed projects that are not viable•Failure to address risks•Poorly developed PPP contracts
Context in Bangladesh
TAF GuidelineJuly 2012
Transaction and Technical Advisors
0
2
4
6
8
10
12/13 13/14 14/15 15/16 16/17
No
. of
Pro
ject
s
Financial Year
Feasibility Study on PPP Projects
PPP Programme Update: Development and ChallengesPage 9 Secretaries & Agency Heads Seminar
Ensuring Necessary Public and Private Sector Skill
Issue Description Potential Impact
C4: Ensuring capacity & capability of resources
PPP projects are complex and need experts covering a wide number of areas of specialisms, covering technical, financial, commercial, social, environmental, legal as well advanced project management. These capabilities need to be build up in both the public and private sector.
•Poorly prepared projects that are not bankable•Delays and cost increments Key issues remain unresolved and therefore impedes project•Lack of investor interest•Projects that fail to meet service expectations
Context in Bangladesh
800 private investors
(Investment Promotion)
65 Events
(Capacity development)
40 Financial Institutions
(Dialogue)
150 Officials
(Involved in PPP projects)
4000 Stakeholders
(PPP Outreach Program)
90 Officials
(Advanced PPP
Training)
PPP Programme Update: Development and ChallengesPage 10 Secretaries & Agency Heads Seminar
Development of a long term infrastructure investment market
Issue Description Potential Impact
C5: Long term private sector funding capacity
PPP projects are lumpy investments with need for long term funding sources to match the long term project cashflows. Failure to minimise these risks, such as forex risks, interest rate risk, inflation risk ,tenor risk, refinancing risk, increase bankability risks of projects.
•Lack of long term financing market will prevent project delivery•Extensive delays in reaching financial closure•Projects may become commercially unviable due to high risk margins
Context in Bangladesh
PPP Programme Update: Development and ChallengesPage 11 Secretaries & Agency Heads Seminar
PPP Program Pipeline
Procurement Contract Signed
* Estimated ** Approximately (Data as at May 2017) (excludes power sector PPP projects)
12 Projects
(US$2.9bn*)
9 Projects
(US$1.6bn**)
(including 1 project
under PSIG)
Project Development
12 Projects
(US$3bn*)
In Principle Approval
45 Projects
(US$14bn*)
13
10
87
5
2
Transp
ort
He
alth
Tou
rism
Zon
e Civil
Acco
mo
d.
Utilitie
s
PPP Projects by Sector
7
17
3942 44 45
May 12 May 13 May 14 May 15 May 16 May 17
In Principal Approval(Number of Projects)
PPP Programme Update: Development and ChallengesPage 12 Secretaries & Agency Heads Seminar
Meeting the PPP Investment Challenge
Forecast PPP Pipeline Contract Award
2018/19
$1.3bn(8 Projects)
Current(2015-2017)
2017/18
$2.0bn (9 Projects)
$1.4bn(10 Projects)
$2.2bn(9 Projects)
2019/20
(Note: Forecast as of July 2017)
PPP Programme Update: Development and ChallengesPage 13 Secretaries & Agency Heads Seminar
Power Generation Plan
Year 2016 2017 2018 2019 2020 Total
Installed Capacity
12,500 MW 15,000 MW 18,000 MW 21,000 MW 24,500 MW
Public Sector 6,700 MW(53.6%)
8,740 MW(58.3%)
9,840 MW(54.7%)
10,500 MW(50.0%)
12,000 MW(49.0%)
Private Sector 5,200 MW(41.6%)
5,600 MW(37.3%)
7,000 MW(38.9%)
9,000 MW(42.9%%)
11,000 MW(44.9%)
RegionalImport
600 MW(4.8%)
660 MW(4.4%)
1,160 MW(6.4%)
1,500 MW(7.1%)
1,500 MW(6.1%)
Financing (US$ bn)
1.90 2.00 4.39 6.00 6.94 21.2
Public Sector(billion dollar
1.38(73%)
1.50(75%)
2.19(50%)
2.50(42%)
2.71(39%)
10.28(48.4%)
Private Sector(US$ bn)
0.52 (27%)
0.50 (25%)
2.19 (50%)
3.50(58%)
4.23(61%)
10.94(51.5%)
* Information from Power Cell dated 2 May 2017
PPP Programme Update: Development and ChallengesPage 14 Secretaries & Agency Heads Seminar
Understanding PPPs:
• What are the key characteristics of PPPs?• What are the different revenue and delivery models?
Understanding Public Private Partnerships
Public Authority
Private Entity
Contract
Long/Medium Term
Public Service Delivery
Infrastructure Asset
Private Sector Risk Transfer
Private Sector Returns
Public Funding
Private Finance
Key Features of a PPP
PPP Programme Update: Development and ChallengesPage 16 Secretaries & Agency Heads Seminar
PPP Revenue and Delivery Models
Re
gulate
d
Utility
Private
Sup
ply
and
Op
eratio
n
Low Private Sector Risk Transfer High Private Sector Risk Transfer
Public Private Partnership PrivatisationTraditional Procurement
PPP Delivery Models
Pu
blic Su
pp
ly M
anage
me
nt
Ou
tsou
rcing
Service
Agre
em
en
ts
Man
agem
en
tA
gree
me
nts
Leasin
g / A
fferm
age
Sup
ply
Op
erate
an
d M
aintain
BO
T/BTL
/DB
FOM
BO
OT/B
OO
Co
nce
ssion
Join
t Ve
ntu
re
PPP Revenue Model
Government Pays Model
• PFI• Annuity • Availability
User Pays Model
• Tolls, charges• Service fees, rentals• Sale proceeds
Mixed Pays Model
• Min Rev Guarantee• Viability Gap Financing• Govt. + User Pay Mix
PPP Programme Update: Development and ChallengesPage 17 Secretaries & Agency Heads Seminar
PPP Projects:
• What projects that have so far been developed?
• What opportunities are there for projects in new sectors?
Live PPP Projects
Dhaka Elevated Expressway➢ Implementing Agency: Bangladesh Bridge Authority
➢ Sector: Road
➢ Concessionaire: Italian Thai Development Public Company Limited
➢ Concession Period: 25 Years (Including Construction Period 3.5 Years)
➢ Status: The land acquisition for 1st tranche is completed; 2nd and 3rdtranche ongoing. Concessionaire has prepared the construction yard.Preparatory works ongoing.
Mongla Jetty Development➢ Implementing Agency: Mongla Port Authority
➢ Sector: Port
➢ Concessionaire: Power Pac-Gmaps (Singapore)
➢ Concession Period: 20 Years
➢ Status: Contract signed. Financial Closure and detailed design is on-going aspart of the Condition Precedent
2 Kidney Dialysis (NIKDU, CMCH)
➢ Implementing Agency: DG Health
➢ Sector: Health
➢ Concessionaire: Sandor Medicaid Pvt. Ltd (India)
➢ Concession Period: 12 Years
➢ Status: Construction completed. 1st phase of operation has been achievedfor both Dhaka (NIKDU) and Chittagong (CMCH) and 2nd phase activitieswould be initiated soon.
PPP Programme Update: Development and ChallengesPage 19 Secretaries & Agency Heads Seminar
Live PPP Projects
Satellite Township at Mirpur➢ Implementing Agency: National Housing Authority
➢ Sector: Housing
➢ Transaction Advisor: Ernst & Young
➢ Status:. Negotiation successfully completed with the preferred bidder.Currently under Legal Vetting
➢ Implementing Agency: Directorate of Social Welfare
➢ Sector: Social
➢ Transaction Advisor: IFC
➢ Status:. Negotiation successfully completed with the preferred bidder. Legal
Vetting completed and CCEA final approval received. LoA will be issuedsoon.
Obosor: Elderly Care
Kaliakoir Hi Tech Park➢ Implementing Agency: Bangladesh Hi-Tech Park Authority
➢ Sector: Zones
➢ Concessionaire: Summit & Fiber@Home
➢ Concession Period: 25 Years
➢ Status: construction on going
PPP Programme Update: Development and ChallengesPage 20 Secretaries & Agency Heads Seminar
Global Case Studies: Sector Based PPP Programme
National Expressways
➢ 4th Generation (4G) Toll Road Program
o Country: Colombia
o A nationwide toll road network through up to 40 different PPPs. Over the next eight years 4G isexpected to deliver 5,892 kilometers of roads in three waves of PPP projects.
o 19 out of 40 projects planned under 4G have been awarded representing over US$10 billion ofinvestment mobilization.
o The World Bank Group (WBG) developed the Colombia Capital Market Deep Dive (DD) to bringtogether investment, advisory, and treasury support from the IBRD, IFC, MIGA and IDB.
National Expressways
➢ National Highway Plan
o Country: Mexico
o The total investment considered to complete the program is approx US$26 billion (2007 quote).
o The strategic modernization of the network and the bypass and access to cities are thefundamental parts of the Mexican road program. The investment of these two subprograms insix years will be of 15,639 million dollars (60% of the total investment).
o 13 projects have been awarded and bids are under progress representing over US$2 billion andresulting in 717 km length of highways.
National Expressways
➢ National Highways Development Project (NHDP)
o Country: India
o The total investment considered to complete the program is approx US$33 billion.
o The NHDP represents 49,260 km of roads and highways work and construction in 7 Phases.10,574 kms are under implementation and 28,915 kms are completed.
PPP Programme Update: Development and ChallengesPage 21 Secretaries & Agency Heads Seminar
Potential PPP Projects
Education ➢ New Schools PPP Project, Australia
o 15 high priority new schools
o DBFOM Contract
o Contract Period 25 Years
➢ Schools PPP in Frankfurt
o Build, refurbishment, operation,maintenance, financing of threeschools and an educational andcultural center
o Contract Period 22 years
PPP Programme Update: Development and ChallengesPage 22 Secretaries & Agency Heads Seminar
Railway➢ Southern Cross Station Redevelopment,
Australia
o enabled the station to be active andresulted reduction of traffic
o BOT Contract
o Construction Period 4 years
Tourism ➢ Adlabs Theme Park, Pune
o 300 Acre Theme Park
o 21 International Standard Rides
o Project Cost: US$240 million
➢ Singapore Sports Hub
o one of the world’s largest sportinginfrastructure projects. 35 hectares,fully integrated, state-of-the-art with 9different facilities.
o Approx. US$900 million
o DBFO for 25 Years
➢ Diesel Locomotive Plant, India
o GE to invest $200 million to build greenfieldmanufacturing base in Bihar and servicefacilities in UP and Gujarat.
o manufacture and supply of 1000 highpower Diesel Electric Locomotives over aperiod of 10 years
Potential PPP Projects
Health➢ St. Bartholomew’s and Royal Hospital in
London
o One of the largest healthcare projectsin the UK, project cost US$1.5 billion
o DBFOM Contract
o Contract Period 38 years
➢ Hospital Mestre, Venice
o The largest healthcare PPP projects inGermany.
o Project Cost: US$300 million
o Availability Payment
o Contract Period 25 years
Water ➢Municipality of Fafe, Portugal
o Abstraction, treatment and waterdistribution to 53,000 inhabitants in anarea of 219 km
o O&M Contract
o Contract Period 25 Years
➢ New Cairo wastewater plant, Egypt
o new wastewater treatment plant witha capacity of 250,000m3 per day
o DBFOM Contract
o Project Cost: USD 200 million
IT/ITES➢ Passport Seva project, India
o improvement in service delivery withadoption of technology
o BOOT Contract
o Project Cost US$225 million
o Contract Period 19 Months
➢ eGhana PPP, Ghana
o Build and manage the e-tax and electronicbusiness registration platform until theirinvestment costs (US$60 million) wererecovered—within five and not exceedingseven years from the effective date of thecontract
PPP Programme Update: Development and ChallengesPage 23 Secretaries & Agency Heads Seminar
Potential PPP Projects
Airport➢ Hyderabad International Airport
o Has the flexibility to increase capacityto handle over 40 million internationaland domestic travelers per annum.
o BOOT Contract
o Contract Period 30 years
➢ Natal Aluzio Alves International Airport
o Highest aircraft traffic in the NortheastLatin America. It has capacity for 8million passengers per annum.
o Project Cost: US$435 million
o BOT Contract
o Contract Period 30 years
Urban Development
➢ Srinagar-Kanyakumari Flyover
o 6-lane 9.985 km flyover With traffic ofabout 1.5 lakh PCUs
o Project Cost: US$ 115m
o BOT Contract
o Contract Period 20 Years
➢ Siliguri-Jalpaiguri PPP Township
o Project to provide complete townshipfacilities to general people
o DBFOM Contract
o Project Cost: US$600 million
Research➢ JAKEDA mini/micro Hydel projects
facility under PPP
o DBOT
o Contract Period: 10 years
➢ Development of Polytechnic ResearchInstitute in Punjab
o Development of Research anddevelopment institute on Polytechnic
o Project Cost: USD$ 50 million
o Design, Operate & Maintain
PPP Programme Update: Development and ChallengesPage 24 Secretaries & Agency Heads Seminar
Developing one of the leading PPP programme
• What are the areas of focus for further development?
• What are the challenges?
Process Reform Recommendations
Ref Issues Findings Recommended Solution
1 PPP Investment Target in 7th Five Year Plan
There is no systemic process for identifying PPP projects
•Separate ADP for PPP and PPP targets for infrastructure ministries (National Infrastructure Plan).
•Establish National Expressways program and other sector based PPP programs
2 Ministries and Agencies drive to implement PPPs
In some instances ownership by ministries and agencies on implementing PPP projects can be enhanced to expedite delivery
Line Ministries to include performance targets for PPPs in their APA.
3 Performancemonitoring of Ministries and Agencies
Ownership over the implementation of PPP projects can be inconsistent across ministries and agencies, leading to reduced prioritisation and lack of drive in quickly implementing projects.
PPP performance targets to be included in APA for Ministries and Agencies at all key decision points of PPP projects.
4 Multiple checkpoints and approvals by Line Ministry
From initiation to final approval a PPP project is processed by Line Ministry at least 6 times. On average each processing takes about 1.5-2 months. Leading to a total of 12 months for processing.
Revise guidelines to reduce the number of times the project is processed by LM.Appoint PPP focal points at LM to will drive projects in LM.
PPP Programme Update: Development and ChallengesPage 26 Secretaries & Agency Heads Seminar
Process Reform Recommendations
Ref Issues Findings Recommended Solution
5 Processing of Transaction Advisor (TA) request
Transaction advisor requests are submitted after CCEA approval leading to additional time for appointment of advisors
TA appointment requests and TOR can be submitted with project proposal form to reduce processing time.
6 Time taken for feasibility completion and project development
On a number of projects the feasibility and subsequent project development has taken longer than scheduled. Some of the delays occur due to events outside agencies control, however, with proactive oversight and monitoring the time frame could be reduced.
Appoint a Project Director on all PPP projects. A reporting and monitoring framework to be created for regular feedback with provision for escalation of issues to PM Office.
7 Lengthy period for development of bid documents
Lack of in-house concession lawyer has delayed development of bid documents and also made it more difficult to reconcile documents from various TAs to form a base model document
Appointment of an in-house legal expert.
Development of model documents.
8 Poor co-ordinationin relation to Linked Projects
Bidding on projects or subsequent implementation by the selected bidder has been delayed on a number of occasions due to poor co-ordination with linked projects.
Project Director to carry out integrated planning on project including the timelines for linked projects.
PPP Programme Update: Development and ChallengesPage 27 Secretaries & Agency Heads Seminar
Investment Climate Recommendations
Ref Issues Findings Recommended Solution
9 Tax incentives Lack of tax incentives is impeding bidder interest on PPPs.Cost of project is increasing and increasing financing challenges.
•6 tax incentives requested to NBR of which 4 processed (income tax, corporation tax, capital gains tax, royalties and know how, VAT on users and import duty)
10 PPP Structure Reduce risk transfer to private sector to encourage investment.
• Apply availability (government pays) model for core infrastructure PPPs.
•Apply User Charging (user pays) for revenue PPPs.
•Focus on public service and not revenue to government
11 Foreign exchangerate risk (forex risk)
PPP projects earn Taka revenue which creates forex risk when USD loans are raised. There are no hedging instruments to manage this risk.
Forex risks protection should be given by Government.
12 Interest rate ‘cap’ on foreign loan
Existing policies restrict foreign loans approval to certain thresholds which can be above that applicable for PPPs.
Information matrix for foreign loan approval is not consistent with PPPs.
•Give specific recognition for PPPs and their risk profiles in agreeing rate threshold.•Develop separate information matrix for PPPs
PPP Programme Update: Development and ChallengesPage 28 Secretaries & Agency Heads Seminar
Policy Recommendations
Ref Issues Findings Recommended Solution
13 Rules PPP Guidelines were issued in 2016. Once the guidelines had been tested on live transactions they would be updated to develop the rules.
PPP Rules based on 2 years of experience of operating the guidelines.
14 O&M Policy There are no provisions to address O&M support by private sector. This is preventing O&M projects from being developed.
O&M policy to be developed
15 Single Lender Exposure
Single borrower exposure limits restrict local banking market development for PPPs –given the size of projects.
Relax single borrowing limits as PPPs have different risk profiles to corporate lending.
16 Long term financing
A deeper domestic debt market is needed at longer tenors to support the volume of PPPs being developed.
•BIFFL to develop ‘guarantee’ & ‘take out financing’ products.
•Project bonds to be explored. Zero coupon bonds benefits
17 VGF Guidelines
VGF guidelines 5 years old and needs updating in line with PPP Law and recent experience of PPPs. VGF 30% contribution portion restrictive and needs re-consideration.
•Update VGF guidelines
•Up to 40% VGF contribution to be considered.
18 TAF TAF guidelines are 5 years old and need to be updated in line with PPP Law and recent experience of PPPs. Scope to be expanded to cover projects and not program.
•Update guidelines to streamline applications of funds. Expand TA to cover PPP program.
PPP Programme Update: Development and ChallengesPage 29 Secretaries & Agency Heads Seminar
Institutional Development Recommendations
Ref Issues Findings Recommended Solution
19 PPPA Capacityand Capability
PPP Authority are using the 2010 organogram. The resources specified are not adequate to deal with a $14bn PPP portfolio. Appointing qualified resources is also seen to be challenging.
Revised organogram for the PPPA to be set out. Procurement expert to be appointed.
PPPA HR Policy to reflect unique functions of the Authority.
20 PPP expertise within agencies
Lack of dedicated PPP resources in agencies result in loss of knowledge as people move. This delays projects, and prevents expertise form being build and retained in the organisation.
Agencies with 3 or more PPP projects must establish PPP Cells. If less than 3 than it can be decided on a case to case basis.
21 PPP expertise in Leg. & Parl.Aff.Dep
Legal vetting can take a substantial time over the procurement process.
PPP Cell to be created in Legislative & Parliamentary Affairs Division. Vetting to be conducted on standard documents.
22 PPP Cell Capacityand Capability
A number of PPP cells have been established but they are yet to be supported adequately to enable them to operate on a standalone basis.
Standard configurations and TORs should be established for PPP cells with equipment and other resource support.
23 Line Ministry PPP lead
Lack of PPP champion or focal point within ministries impedes processing of PPP projects, as there is no single point of oversight and monitoring.
Focal point to be established at ministries, at a level immediately below Secretary , with support from at least one deputy
PPP Programme Update: Development and ChallengesPage 30 Secretaries & Agency Heads Seminar
Capacity Development Recommendations
Ref Issues Findings Recommended Solution
24 PPPA Capacity and Capability
PPP Authority contains a mix of resources from the public sector (on deputation) and private sector (contract/outsourcing). PPPA needs to build up a group of dedicated resources with robust understanding and knowledge of PPPs.
PPPA resources should be subject to a structured training programme covering different aspects of PPP development.
25 PPP Cell Capacityand Capability
A number of PPP cells have been established but the resources appointed in the Cells have not been taken through systematic training programme. This limits their technical expertise to effectively deliver PPP projects
PPP Cell resources should be subject to a structured training programme covering the life cycle of project development.
26 Training Program Many training programs have been provided and they have been found to be effective in information dissemination. However, there is no structured training programme that builds around an individuals career around the PPP project cycle.
Development of a structured training programme for PPPs based around stakeholders and their role in the delivery of PPP projects.
PPP Programme Update: Development and ChallengesPage 31 Secretaries & Agency Heads Seminar
Deal Structuring Recommendations
Ref Issues Findings Recommended Solution
27 Investor interest and allocation of risk
In a number of PPP projects the private sector has been allocated risk that they cannot mitigate (e.g. traffic demand risk) leading to delays or failures.
Risk allocation should be duly considered. Traffic risk to be retained with government unless there is clear historical data that allows private sector to manage risk.
28 Focus on revenue generation
Real estate PPPs are primarily driven by land premium price rather than focusing on generation of economic activity. The high premium prevents the full benefit economic activity generation from being fulfilled.
Deals should be structured around timing and amount of minimum investment by private sector. Price should be considered as a floor to protect government assets.
29 Funding structure A number of projects are based on the riskier user charging PPP model. In the context of a nascent PPP market in Bangladesh this limits market appetite and therefore growth of the market.
Projects that are deemed as important should be structured on a PFI model to ensure successful closure of transactions.
PPP Programme Update: Development and ChallengesPage 32 Secretaries & Agency Heads Seminar
Project Execution Reforms
Ref Issues Findings Recommended Solution
30 Reconsidering of terms post contract negotiation
It is poor practice to revise terms after negotiations. This creates adverse investor sentiment
Post negotiations on contract no further unilateral changes should be introduced to documents.
31 Timely satisfactionof conditions precedent
Lack of PPP experience and understanding of contract management can lead to lack of oversight over project execution and thus delays in satisfying conditions precedent.
Lack of private sector local market experience can also lead to delays.
The project director with a dedicated team should oversee the execution of the project.
A monitoring and governance framework is to be in put in place.
The Line Ministry and Contract Authority should facilitate the receipt of approvals and in some cases seek (where possible) seek to obtain clearances in advance.
32 Structured marketing of PPP projects
Develop a structured and strategic approach to marketing PPP projects to attract leading investors with strong delivery experience and financial capabilities.
Targeted marketing to be carried out.
PPP Programme Update: Development and ChallengesPage 33 Secretaries & Agency Heads Seminar
Identifying the issues
Project Take-up
(1) New projects (2) Sector based infra plan(3) Project continuity
Delivery Time
(1) Approval stages & time(2) Availability of data (3) Dedicated delivery
organisation(4) Linked projects
PPP Risk Structure
(1) Risk transfer(2) Revenue focus(3) Termination
guarantee
Investment Climate
(1) Incentive stimulus(2) Regulatory reform(3) Approvals and permits
Financing market
(1) Market depth/tenor(2) Forex & interest rate risk(3) Single borrower
exposure
Bidding community
(1) Deal experience(2) Local know how(3) International marketing
PPP Programme Update: Development and ChallengesPage 34 Secretaries & Agency Heads Seminar
Contact Details:
PPP Authority (Prime Minister’s Office)1st Floor, NGO Bureau Building, AgargoanDhaka , Bangladesh
Tel: +88 02 5500 7413Email: [email protected]
Meeting the
PPP Investment Challenge: