Policy Research Institute - PRI Bangladesh

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PPP can help speed up infrastructure uplift

Published: Sunday, May 17, 2009

The_Financial_Express
 

PPP can help speed up infrastructure uplift

Sunday May 17 2009

 FE Report


The government can pool at least US$ 5.0 billion into a dedicated infrastructure fund by tying up with private investors, a top economist said.


Ahsan H Mansur, executive director at the new research firm, Policy Research Institute (PRI), said that Bangladesh could potentially generate five per cent of GDP in infrastructure investments, provided it created an initial $ 1.0 billion fund through public-private partnership (PPP).


"Establish a PPP investment fund -- may be of $ 1.0 billion -- to create an impact, with the objective to catalyse total investments of $ 5.0 billion in the infrastructure sector," he said."It's going to bring about a sea change. Infrastructure needs are vast. If implemented and leveraged, this may potentially produce between 4.0 and 5.0 per cent of GDP (Gross Domestic Product) in infrastructure investment," he added. "That will be well above what could be done through the current ADP arrangements."


His comments came just a week after finance minister AMA Muhith announced that the new Awami League-led government would introduce a PPP budget for the first time in the country's history.


Mr Mansur said the government needs to adopt policies to encourage establishment of infrastructure funds by domestic and foreign companies.


"What you need is just to establish a dynamic PPP cell at the finance ministry or Prime Minister's Office. This wing must have authority to promote investment in projects, capacity to evaluate their economic viability and relations with potential investors," he said.

Mr Mansur, a former Middle East division chief with the International Monetary Fund, said Bangladesh can draw lessons from the PPP experience of India, China, East Asia and the Middle East and adopt policies to close the ever-growing infrastructure gap.


"Everybody in India is convinced that this is the vehicle to narrow the vast infrastructure gap that persists in that country today," he said.


PPP-based investment programme started with Manmohan Singh as the finance minister in 2000 and got further impetus after he became the prime minister.

He said even Indians initially welcomed such a programme with apprehension, but now it "boasts investment worth $ 500 billion in the next five years."


Currently, an estimated $ 27 billion worth projects are at the implementation stages.

Speech