Introduction

Over the past few decades, Bangladesh has made impressive socioeconomic improvements. Strong GDP growth, decreased poverty, enhanced gender equality in education, and improved healthcare metrics have all helped the nation move closer to being a middle-income nation. The substantial development of public infrastructure is a crucial prerequisite for achieving this goal. However, the growing demand for hospitals, power, roads, and other vital services cannot be met with only public finance. To bridge this gap, the government has determined that Public-Private Partnerships (PPPs) are an essential tactic for drawing efficiency, technology, and private investment into the provision of public services.

History of PPPs

PPPs are not a new idea in Bangladesh. With the introduction of the Private Sector Power Generation Policy in 1996, the journey started in the middle of the 1990s. Private involvement in significant energy projects was made possible by this. To increase the usage of PPPs across many sectors and bring them into line with global best practices, the government first introduced the Private Sector Infrastructure Guidelines (PSIG) in 2004. In 2010, the PSIG was thoroughly updated with the Policy and Strategy for PPP.

Public Private Partnerships (PPPs)

PPPs are partnerships between the public and private sectors that are based on the knowledge of each partner and that optimally address well-defined public requirements by allocating resources, risks, and rewards. Legally binding agreements, usually medium to long term, between the public and private sectors, strengthen the partnership by allowing the private sector to provide services that the public sector has historically provided. These agreements clearly outline shared goals and risk allocation for the delivery of public infrastructure and/or public services. Turnkey construction contracts, which fall under the category of public procurement projects, outsourcing basic public service functions, and the privatisation of utilities, where the public sector has a minimal ongoing involvement, are not included in PPPs.

Legislations

The Bangladesh Public-Private Partnership Act of 2015 is a legal framework that aims to increase private sector involvement in infrastructure, provide transparent procurement methods, promote long-term value for money, and foster an enabling legal environment. It describes PPP projects as infrastructure or service projects carried out under contractual agreements between public bodies and private partners. The PPP Authority, which reports to the Prime Minister’s Office, is the primary regulatory agency in charge of implementing rules and templates and overseeing the PPP Technical Assistance Financing scheme.

Thereafter, the PPP (Amendment) Act, 2023, has introduced some reforms in the legal framework for public-private partnerships (PPPs). These include standardizing bid processes, introducing a standardized checklist for project viability, risk allocation, social impact, fiscal sustainability, and the Swiss Challenge Method for transparency. The Act also provides for the formation of government-to-government (G2G) partnerships, facilitating bilateral collaboration between Bangladesh and foreign governments on large-scale infrastructure projects. The Act also initiated reforms such as increasing scope, redefining risk allocation, and streamlining G2G procedures.