The government has identified six projects for implementation on a ‘very urgent’ basis under the proposed public-private partnership (PPP) budget. Except construction of a deep-sea port in Chittagong, the rest of the projects are estimated to cost $11.05 billion or Tk 75,900 crore.
According to a finance ministry working paper on PPP, the projects are Dhaka-Chittagong Access Control Highway at an estimated cost of $3.023 billion, construction of a sky rail around Dhaka city at a cost of $2.8 billion, construction of a Dhaka city underground railway at a cost of $3.1 billion, Dhaka city elevated expressway at a cost of $1.23 billion, two coal-based 900 megawatt power stations at the coastal areas at a cost of $0.9 billion, and the construction of Chittagong Deep-sea Port.
Finance ministry sources said apart from these big projects, a list of some small projects has also been sought incorporating projects like construction of link roads, flyovers, and underpasses.
Many local business groups already expressed interest in the big projects. For quick increase in investment in infrastructure, the government is going to take some initiatives under the PPP. Most of the investments will be in the private sector and the government will participate in it. To that end, in the next budget the government is likely to allocate
Tk 700 crore to Tk 3,500 crore depending on the volume of projects under the initiative.
The working paper estimates an investment deficit of $23 billion or Tk 1,58,700 crore in the period between the next fiscal year and 2013. An estimated investment deficit of $2.16 billion or Tk 14900 crore is expected to dog the next fiscal year.
A new fund titled ‘Bangladesh Infrastructure Investment Fund (BIIF)’ will be formed to ameliorate the investment deficit through projects under the PPP initiative. The funds will be raised from public and private sectors.
The working paper also proposes increasing BIIF through release of long-term bonds and shares on the capital market.
It also suggests collecting fund through turning loans into transferable debt securities through securitisation, and through sales of those. Besides, a special technical assistance fund might also be set-aside in the next budget for studying PPP projects.
Those who will invest in BIIF might be given tax waiver or allowed to pay a minimum tax.
Import of capital machinery under PPP initiatives might get duty-free facilities and tax holidays, or a minimum tax might be allowed on profits for a specific period.
An advisory committee comprising 11 to 13 members headed by the finance minister might be formed to provide guidelines for the PPP initiatives.
The sources said a final announcement regarding the issues will be made in the budget speech of the finance minister.
Source: The Daily Star, 25 May 2009