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Japan -Bangladesh Public Private Joint Dialogue

Tokyo, Japan

Bangladesh:
Building a national PPP Program
April 2016

Syed Afsor H. Uddin


Chief Executive Officer
PPP Authority
Prime Minister’s Office, Bangladesh
Bangladesh: Strong Fundamentals

Bangladesh: Country Data


 Area : 147,570 km2
 GDP : USD 190 billion (est FY 2015)
 GDP Per Capita : USD 1466 (FY 2016)
 Inflation : 6.2% (FY2015)
 Forex. Reserve : USD 28 billion (February 2016)
 Rating: : Ba3/BB- stable (April/May 2015)

Bangladesh: Location of Strategic Importance


GDP at constant prices Year on year % change Projections
2012 2013 2014 2015 2016
World 3.4 3.4 3.4 3.3 3.8
Advanced Economies 1.2 1.4 1.8 2.1 2.4
USA 2.3 2.2 2.4 2.5 3.0
Euro Area -0.8 -0.5 0.9 1.5 1.7
Other 1.7 2.1 2.7 2.7 3.1
Emerging Market &
5.2 5.0 4.6 4.2 4.7
Developing Economies
China 7.8 7.8 7.4 6.8 6.3
India 5.1 6.9 7.2 7.5 7.5
Bangladesh 6.3 6.1 6.1 6.3 6.8
Source: IMF World Economic Outlook (July 2015)

Page 2 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
Bangladesh 7th Five Year Plan (FY2016-2020)

“Accelerating Growth, Empowering Citizens”


Targets

SDG 7.4% 6.2% 12.9m

“To become a
Post 2015 targets Annual Average Reduction of head Additional Jobs
middle integrated
income country Growthby 2021
count poverty ratio created

and a
developed country by 2041”
Enablers

US$400bn 77.3% $12.5bn 1.8%


(approx.)

Government of Bangladesh th
7 Five
Total Investment Private Sector Infrastructure PPP
Requirement Investment FinancingYear Plan (published Dec
(annual) 2015)
(%of GDP)

Page 3 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
Understanding Public Private Partnerships

Key Features of a PPP

Public Public Service Private Sector


Contract Public Funding
Authority Delivery Risk Transfer

Long/Medium Infrastructure Private Sector


Private Entity Private Finance
Term Asset Returns

PPP Delivery Models


Low Private Sector Risk Transfer High Private Sector Risk Transfer
Supply Operate

and Operation
Private Supply
Management
Public Supply

Management

and Maintain

DBFOM/BOO

Joint Venture
Outsourcing

Agreements

Agreements

Concession

Regulated
Affermage
Leasing /
Service

Utility
BOT

Traditional Procurement Public Private Partnership Privatisation

Page 4 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
History of partnerships with private sector
Up to 1995 1996 – 2004 2005 - 2009 2010 - On going

Centrally
Phase

Project Based Sector Program Integrated


Initiative Initiative Initiative Program
Initiative

1996: Private 2004: Private 2010: Strategy &


Sector Power Sector Policy for PPP
Policy

Generation Policy Infrastructure (repealed 2015)


Guidelines 2010: Special
(repealed 2010) Power Act
Meghnaghat 450 MW Power Plant
2015: Bangladesh
PPP Act

Fertiliser JV Power Projects Power Projects Multi-Sector Projects


Projects

(e.g. KAFCO) (e.g. Haripur 360MW (e.g. RPCL 70MW) (e.g. Transport, Port,
& Meghnaghat 450 Power, Health, Zones,
Health MW power plants) Port Projects Civil Accommodation,
(e.g. BIRDEM, Heart (e.g. Teknaf Land Port) Housing, Tourism)
Foundation) RoadHaripur
Projects Mayor Mohammad
360 MW Power Plant
Hanif Flyover
(e.g. Hanif Flyover)
Page 5 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
A New Framework for PPP: Key Reforms

Centralised regulatory
Injection of targeted
unit and program
and catalytic funding
champion
support

Financial Institutional
Support Changes
Public and private
sector transaction
execution capacity Capacity Regulatory
enhancement
Development Changes

Project
Preparation Streamlined approval
Structured process with and integrated policy
expert support for framework
project development

Page 6 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
The PPP Process
Process applied for implementation of PPP projects

Appoint subject
matter experts
Monitor (1)
implementation; Screen
apply lessons
(2)
learnt (7)
Expert
Monitor
Appt. Pick projects
suitable for PPP

CCEA
Meet conditions Approval
precedent for (6) (3) Ensure technical
financial close Finance Feasibility and commercial
viability

Run efficient and (5) (4) Ensure


transparent Tender Structuring bankability of bid
bidding process documentation

Page 7 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
Creating the Conditions for Investor Confidence

Establishing a certain, clear and


transparent framework for Investors

Market
Sounding
Investor
Promotions
Pre-Bid
Meetings
PPP Act Contract & Bid Transaction Advisors Marketing
(Sep 2015) Documents

Change in Law Land Access Revenue Concession


Force Majeure Termination
Rights Sharing Period

Project Independent Performance Dispute Rights, Duties


Implementation Engineer Guarantee Compensation Resolution & Obligations

Page 8 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
PPP AuthoritySupport
Government Governance Arrangement
for PPP Projects
PPP projects are centrally monitored to Government will identify land
ensure constraints are pro-actively requirement and acquire at own cost
addressed
Land Resettlement (if required )
Centralised will be done by Government
Key clauses to Acquisition
protect investment
Monitoring after due consultation and
necessary compensation
included in PPP
Contracts
Investor
Protection Resettlement

Full technical,
Access to financing Long Term PPP Detailed commercial and
from dedicated Program financial studies
Government owned
Financing Access Feasibility Study carried out by
banks internationally
appointed
consultants to ensure
viability and
bankability
Incentive Viability Linked Project
Incentives Package being Package Gap Delivery
developed covering
financial benefits and
Financing All linked projects (e.g.
regulatory support Subsidy utilities shifting) will be
carried out by government
(Where required) Government can at its own cost
provide additional financial subsidy
Page 9 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
Bangladesh PPP Program Summary

In Principal Approval PPP Projects by Sector In Principal Approval


13
42 43
39 10
9

5 5 43 Projects
17
1 (US$14bn*)
7

May '12 May '13 May '14 May '15 Jan '16

Project Development Procurement Contract Signed

10 Projects 12 Projects 7 Projects


(US$5bn*) (US$1bn*) (US$1.3bn**)

* Estimated ** Approximately (Data as at January 2016) (excludes power sector projects - summary in annex)

Page 10 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
Enhancing International Profile of the PPP Program

Asia-Pacific Forum on
Public-Private
Partnerships for Transport

Asia-Pacific Forum21-22
Infrastructure
Development
onJanuary
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PARTNERSHIPS IN ASIA AND THE PACIFIC
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25-28 November 2014 Beijing
IMPLEMENTING THE UN 2030
PPP OPENS NEW November
January 2014THROUGH EFFECTIVE,
2015
June 2015
AGENDA
HORIZONS March 2016
September 2015 PEOPLE FIRST
PUBLIC PRIVATE
PARTNERSHIPS
3016 March
February 2016– 1 April 2016,
30 March – 1 April 2016,
ESA Campus
Geneva, Switzerland
Beirut, Lebanon
ASIAN DEVELOPMENT BANK Geneva, Switzerland

Page 11 PPP Project Pipeline Update 1st Meeting of the Board of Governors
PPP Contacts Signed
Commercial
PPP Projects Contract Signed Construction Start
Operation

(1) Mayor Mohammad Hanif Flyover*


June 2005 June 2010 October 2013
(* Developed under PSIG 2004)

December 2013 Dec 2018


(2) Dhaka Elevated Expressway August 2015
(revised) (forecast 2nd tranche)

(3) Haemodialysis Centre at NIKDU January 2015 August 2015 June 2016 (forecast)

(4) Haemodialysis Centre at CMCH January 2015 August 2015 June 2016 (forecast)

(5) Kaliakor Hi-Tec Park (Lot 2 & 5) June 2015 February 2016

(6) Kaliakor Hi-Tec Park (Lot 3) August 2015 October 2015

(7) Mongla Economic Zone February 2016

Mayor Mohammad Hanif Flyover Dhaka Elevated Expressway Haemodialysis CMCH


Page 12 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
PPP Projects Development: 2015 – 2016 (Indicative Timelines)

PPP Projects Sector Jul 15 Jan 16 Jul 16 Jan 17

(1) Shantinagar Mawa Flyover Transport Development

(2) Chittagong Railway Station Civil Development


Commercial Development Accomod.

(3) Motel Upal Tourism Development

(4) Khanpur Inland River Port Transport Development


(5) Khulna Railway Station Civil
Commercial Development Accomod.
Development

(6) Chittagong Railway Hospital Health Development

(7) Laldia Bulk Terminal Transport


Development
(8) Dhaka Chittagong Access
Transport Development
Controlled Highway

(9) Sabrang Tourism Zone Zone. Development


(10) 5 Star standard hotel at Development
Tourism
Motel Sylhet

Page 13 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
PPP Transaction Advisor Appointment

PPP Projects Sector Jul 15 Jan 16 July 16 Jan 17


CA
(1) Dhirasram Inland Depot Transport Proc. Aprv.

CA
(3-4) Occupational Disease. Hosp. Health Devlpmt. Proc. Aprv.
CA
(5) Kamlapur Hospital Health Aprv.

(6) Jamalpur Economic Zone Zone. CA


Devlpmt. Proc. Aprv.

(7) Comm Develop, Nasirabad, Civil CA


Chittagong Accomod. Devlpmt. Proc. Aprv.

Civil CA
(8) Jhilmil Residential Area
Accomod.
Development Proc. Aprv.
CA
(9) LPG Bottling Plant Energy Aprv.

(10) Hatirjheel (Rampura Bridge)- CA


Transport Development Proc. Aprv.
Shekherjaiga-Amulia-Demra Road

Page 14 Bangladesh: Building a National PPP Program Japan Bangladesh Joint Dialogue
“We look forward to working in partnership with you in
building the infrastructure foundation of Bangladesh.

Bangladesh is growing … we invite you to be a part of it.”

Contact Details:
Syed Afsor H. Uddin
Chief Executive Officer
PPP Authority (Prime Minister’s Office)
51-52 Mohakhali,
Dhaka 1212, Bangladesh
Tel: +88 02 9898530
Email: ceo@pppo.gov.bd