Public-Private Partnerships (PPP): Contextual Considerations and Areas for Reform to Offset Covid-19 Shock

Abstract

Public-private partnerships (PPPs) are not new. However, they are becoming increasingly pivotal to accomplishing what both sides struggle to do: rolling out the high-quality development, redevelopment, and creation of public facilities and infrastructure, and as we look to the future, the development of digital infrastructure. Ideally, PPPs create a win-win opportunity for the private sector to work with governments. Companies assume management responsibility and much of the risk in exchange for profits linked to performance. The projects create a new source of business for companies while adding private sector expertise, efficiencies, and capital to public endeavours. In most cases, these projects could not get off the ground without private support, as tightening budgets make it difficult for governments to fund improvements to ageing public assets or services. Bangladesh announced a revised PPP program in the 2009/10 Budget Session and introduced a new PPP policy in August 2010 (PPP Policy 2010). Before the mid-1990s, Bangladesh had entered into several individual PPP transactions & 1996 marked the first time that a policy framework was introduced for PPPs to enable private sector partnerships in power generation. In 2010, the 6th Five-Year Plan was launched, outlining the government’s vision to improve the country’s economic growth trajectory. Private-sector participation is essential to bridge the investment gap and satisfy infrastructure needs worldwide. PPPs are one of many arrangements to consider, but due to their complex, timely and costly procurement, governments often struggle to apply and leverage them. Governments can implement mechanisms to nurture their PPPs and infuse efficiency and performance throughout their maturity journey. These mechanisms should be carefully crafted and ensure that actors are clear on their role and are empowered to execute it. It is a paradox that the PPP project pipeline development and implementation cannot keep pace with the growing demand for infrastructure & power projects. At the same time, the government is also unable to utilise the allocated budget for the PPP. Hence, the challenges are essential for the policymakers to deal with the issue in the best possible way. Bangladesh faces the challenges of modernising and expanding its vital infrastructure services, including roads, power, gas, port, etc. However, the health sector is still one crucial area where the public-private partnership (PPP) model could play a prominent role, particularly in the diagnostic, specialised treatment and medical waste. This paper is an attempt to analyse and draw lessons in the perspectives of the institutional, regulatory, finance, and other policy-relevant issues for the development of PPP projects & try to figure out the potential of Public-private partnerships (PPPs) to contribute to a clean and green recovery from the on-going Covid-19 crisis in Bangladesh.