Presentation to The Hon’ble Prime Minister
June 19, 2013
PPP Office, Prime Minister’s Office
Partnering with the Private
Sector
Bangladesh Experience
Dr. Md. Nasir Uddin
Director General
PPP Authority , Prime Minister’s Office
Infrastructure Financing Strategies for Sustainable Development
25 January 2017
Discussion Topics
Background: Vision of
the PPP program Why was the PPP program revised?
1
PPP Program: Key
Reforms (2009-2015)
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 Office
Role and Remit
What has the PPP Office worked on for the last 4
years?
4
Conclusions What is the long term prospects of PPP in
Bangladesh?
5
PPP
World (87%)
Africa (76%)
Asia
(98%)
Australia (79%)
Europe (98%)
North America
(73%)
South America
(92%)
Private Sector Infrastructure in the Global Context
*Source: PPP Office
research (2013)
More than 50 Multilateral &
Donor Agencies work with PPP
PPP Practicing Countries
BOT / DBFOM
BOO
BOOT Leases /
Affermage
O&M Contract
PFI / BOT Annuity
Bangladesh 7th Five Year Plan (FY2016-2020)
“Accelerating Growth, Empowering Citizens”
“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
US$400b
n (approx.)
77.3% $12.5bn
Total Investment
Requirement
Private Sector
Investment
Infrastructure
Financing
(annual)
1.8%
PPP
(%of GDP)
Ta
rge
ts
En
ab
lers
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
as
e
Po
lic
y
2010: Special
Power Act
Pro
jec
ts
Fertilizer 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,
Housing,
Tourism)
2015: PPP Law
A New Framework for Public Private Partnership in Bangladesh
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
Infrastructure Financing Strategy
Public Finance
Sovereign backed
G2G
Sovereign backed donor
Finance
DBFOT/ BOT/BOO/
BOOT
Public Financing PPP Financing
G2G Partnership
Joint venture /
Bidder Finance
(BTF)
[CATEGORY NAME]
[CATEGORY NAME]
[CATEGORY NAME]
Expert Project Facilitation
Promotion & Marketing
Stakeholder Engagement
Donor Agency Engagement
[CATEGORY NAME]
[CATEGORY NAME]
PPP Authority: Delivery of Roles & Remit
PPP
Authority
Role
Promotion & Marketing
Capacity Building
Donor Agency Engagement
Screened & Approved Over 45 PPP Projects
Screening & Approving Projects Monitoring 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
Page 8 Strictly Confidential
(1)
Screen
(2)
Expert Appt.
(3)
Feasibility
(4)
Structuring
(5)
Tender
(6)
Finance
(7)
Monitor
The PPP Process (Continues…)
Process applied for implementation of PPP projects
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
National Academy for Planning and Development
(NAPD)
PPP Process Flow
Technical Proposal Evaluation by QTEC
Financial Proposals Opening of the Eligible Bidders
Combined Evaluation and Recommendation of
Preferred Bidder by QTEC
IA Sends QTEC Evaluation Report to LM for Approval
QTEC Negotiates with Preferred Bidder
LM
Approval
YES
NO Request IA for
Clarification/Recommendation/Other
Feedback
IA Clarifies/
Acts
Accordingly
IA Issues Letter of Award
IA Signs Contract with Selected Bidder/SPV (as
applicable) The PPP Process Flow
PPP Process Flow
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
M
ark
et
Inte
racti
on
Rights, Duties
& Obligations
Dispute
Resolution Compensation Performance
Guarantee
Independent
Engineer Project
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
Interfaces Surveys
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
Period Force Majeure Termination Change in Law
Page 12
Provision of Targeted Financial Support
Technical
Assistance
Financing
Viability Gap
Financing
Bangladesh
Infrastructure
Financing
Fund
Fund
Objective
Agency
Support PPP
project
development
Enhance
financial
viability of PPP
project
Provision of
longer term
Financing
Amount TK 100 Crore
(Approx. $12m)
TK 400 Crore
(Approx. $50m)
TK 2500 Crore
(Approx.
$315m)
PPP Office PPP Unit BIFFL
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*
(Appro
x 1
2-
18
Month
s)
* Average Targeted Timescales
Request for
Proposal
7 Months
Negotiation /
Vetting
2 Months
Final Approval
(CCEA)
2 Months
Contract Award
1 Month
Single 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
De
ve
lop
me
nt*
(A
ppro
x 1
8
Month
s)
PPP Awareness and Capacity Building Events: 2012 - 2016
Total
63 Events
(Covering over 4000
participants)
PPP Capacity Building
12 Events
(Approx. 300 Participants)
Tailored Training Program
22 Events
(Approx.160 Participants)
Policy Level Consultations
14 Events
(Approx. 400 Participants)
PPP Awareness Seminar
26 Events
(Approx. 3400 Participants)
Page 15 Strictly Confidential
Structured PPP Pipeline
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
39 42 44
May 12 May 13 May 14 May 15 May 16
In Principle Approval (Number of Projects) 13
10 9
5 5
2
PPP Projects by Sector
PPP Contacts Signed
PPP Projects
(1) Mayor Mohammad Hanif
Flyover
(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 Start Commercial Operation
June 2005 June 2010
January 2015
October 2013
August 2015 Nov. 2016
June 2015
January 2015 August 2015 Nov/Dec 2016
(forecast)
December 2013 (revised) August 2015
2018
(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 Projects in Procurement
PPP Projects Sector Stage
(1) Oboshor Health Care for Elderly Health Evaluation and legal vetting complete
(2) Sylhet Hi Tec Park Zone Evaluation complete
(3) Mirshorai Economic Zone Zone Evaluation and negotiation complete
(4) Entertainment Village at Shoybal Tourism Evaluation and negotiation complete
(5) Kaliakor Hi Tec Part (Lot 4) Zone Evaluation stage
(6) Affordable Housing at Mirpur
Civil Accom. Request for Proposal issued
(7) Air Traffic Control System at HSIA
Transport Request for proposal evaluation on-going
(8) Mohakhali Hi Tec Park Zone Discussion on next steps on-going
(9) Srihatta Economic Zone Zone Discussion on next steps on-going
(10) Zakir Hussain Road Hotel Tourism Shortlisting of bidders of completed
(11) Dhaka Bypass (Joydebpur to Madanpur)
Transport Shortlisting of bidders completed
* Based on information collated from implementing agencies and line ministries
Roundtable Discussion with Senior Government Officials and Private Sector Leaders Page 18
PPP Projects Development: 2015 – 2016 (Indicative Timelines)
PPP Projects Sector
(1) Dhaka Chittagong Access Controlled Highway
Transport
(2) Shantinagar Mawa Flyover Transport
(3) Khulna Railway Station Commercial Development
Civil Accomod.
(4) Chittagong Railway Station Commercial Development
Civil Accomod.
(5) Khanpur Inland River Port Trasnport
(6) Chittagong Railway Hospital Health
(7) Laldia Bulk Terminal Transport
(8) Motel Upal Tourism
(9) Sabrang Tourism Zone Zone.
Jan 15 July 15 Jan 16 July 16
Development
Development
Development
Development
Development
Development
Development
Development
PPP Project Pipeline Update Page 19 1st Meeting of the Board of
Governors
Development
PPP Project Pipeline Update Page 19 Round Table Discussion with
Banks
Development of a long term infrastructure investment market
Issue
Description
Potential Impact
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
A Pioneering Health PPP Project
Haemodialysis
Centre at
NIKDU & CMCH
Thank You