1. Organised by Civil Service College, Dhaka Md. Abu Rashed Senior Consultant (PPP) Infrastructure Investment Facilitation Center 18 February 2012 PPP Frameworks in Bangladesh 1 Lecture No. 4

2. 2 THE OVERVIEW PART A: Forms of Partnerships PART A: Forms of Partnerships Introduction Introduction Type of PPPs Type of PPPs PART B: PPP Frameworks of Bangladesh PART B: PPP Frameworks of Bangladesh First Generation PPPs First Generation PPPs Second Generation PPPs Second Generation PPPs Third Generation PPPs Third Generation PPPs

3. PART A: Forms of Partnerships 3

4. Medium to long term relationship between the public and private Sector Enable Government to work with private sectors to provide infrastructure Involves sharing and transferring of risks and rewards between public and private Sector Attempts to utilise multi-sectoral and multi-disciplinary expertise to structure, finance and deliver desired policy outcomes Clear governance structures established to manage the partnerships PPP as a Contractual Framework

5. Achieving improved value by utilising the innovative capabilities skills to deliver performance improvements and efficiency savings Leveraging private sector expertise and capital to obtain efficiency gains in service delivery and asset creation Life-cycle responsibility, value for money, output specification, risk transfer fundamental More critically…

6. 6 Service Contracts Service Contracts Management Contracts Management Contracts Lease Arrangements Lease Arrangements Concessions Concessions BOOT BOOT BOT BOT BOO BOO BT BT BTO BTO ROT ROT ROM ROM SOT SOT Types of PPP Contracts

7. 7 Duration (yrs) Increasing level of delegation, risk & irreversibility Service contracts Management contracts Leases Concessions Divestitures 100 % non-public ownership 100 % Public ownership 510152025 30 BOT BOO Provider Enabler/ Regulator Governments Role Forms of PPP

8. 8 Equity Investors Lenders/ Institutional Investors Borrower / Concessionaire Executing Agency Dividends Equity Investment Debt Finance Debt Service (Principal + Interest) Concession Agreement Toll Payments Revenues/Cash Flows Project Construction, Operations and Maintenance Toll Rate/ Fare Collection Revenue Government of Bangladesh Performance Guarantee Overview of Contractual Framework Annuity Payments

9. PART B: PPP Frameworks of Bangladesh 9

10. 10 First Generation PPPs: Started with Independent Power Producers (IPPs) after Government approved the 1996 Private Sector Power Generation Policy of Bangladesh Second Generation PPPs: PPP in multiple sectors carried out after the Government approved the Bangladesh Private Sector Infrastructure Guidelines (PSIG) in 2004 Third Generation PPPs: The Government approved the PPP Budget in 2009. The third generation PPP policy & starategy with guidelines have recently been approved by Government in Aug. 2010 PPP Development Phases in Bangladesh