1st CHAPTER

Definition of PPP
A PPP is a government service or private business venture which is
functioned and operated through a partnership of government and one or
more private sector companies.

Importance of PPP

1. The implementation of high priority projects can be accelerated.

2. Through PPP projects the private sectors can provide specialized
management capacity.
3. Enabling the delivery of new technology.
4. PPP allows the reduction in the size of public agency.
5. Costs savings
6. Substitution of private resources and personnel for constrained public
resources.

Benefits:
Public sector benefits:
1. Maintaining economic stability.
2. Gains from private sector innovation and expertise.
3. Achieving desired growth rate.

Private sector benefits:

1. Expansion of business
2. Innovation

Public/User benefits:
1. Accountability

2. More responsive government

3. Guarantee of safety

Why government promotes PPP?

1. To attract private capital investment.
2. To increase efficiency and use available resources more effectively.
3. To reforms sectors through a rational of rules, incentives and
accountability.
4. Improved asset maintenance.

Types of PPP
1.
2.
3.
4.
5.
6.
7.
8.
9.

Built operate transport (BOT)

Built own operate transport (BOOT)
By built operate
Contract services
Design built
Design built operate
Lease/Purchase
Lease develop operate
Concession agreement

END OF 1 ST CHAPTER

2ND CHAPTER

Sectors of PPP in Bangladesh

1.
2.
3.
4.
5.
6.

Example need

Health sector
Education
Infrastructure
ICT
Industry
Tourism

Public sector partner

1.
2.
3.
4.
5.

National government
District administration
Municipal authorities
Local government bodies
State universities and research organization

Private sector partner

1.
2.
3.
4.
5.
6.
7.

Commercial profit enterprise

NGO
Community based organization
Religious organization
Professional organization
Trade union
Households

Judging effective partnership

1.
2.
3.
4.

Universality
Equity
Efficiency
Accountability

Spectrum of relationship in PPP

1.
2.
3.
4.

Parallel activities
Competitive activities
Complementary activities
Contractual services

5. Cooperation and collaboration

6 critical components for any successful PPP project

1.
2.
3.
4.
5.
6.

Political leadership
Public sector involvement
Wealth throughout plan
A dedicated income sting
Communication with stakeholders
Selecting the right partner

For ensuring successful PPP project in Bangladesh

Political commitment:
1.
2.
3.
4.
5.

Policy statement
PPP unit
Presence of focal ministry
Development of a PPP program
Integrate with planning

Regularity reforms:
1. Sectoral policy

Limitation of PPP
1.
2.
3.
4.
5.
6.
7.

Corruption
Politicization
Environmental hazards
Accountability transparency
Higher price
Overlapping
Contractual policy

Principles of managing PPP

1. The commitment principle

2.
3.
4.
5.
6.
7.

The
The
The
The
The
The

success principle
strategy principle
management principle
single point responsibility principle
cultural environment principle
triad of principle

Developing a c heck list to match opportunity with PPP option

Politics
1. Ownership
2. Potential
political deal
breakers

Law & Institution

1. Laws &
Regulations
2. Document &
methodology
3. Internal
organization
4. Transparency
&
accountabilit
y

Economic &
Finance
1. Business
case
2. Fiscal issues
3. Financing

END OF 2ND CHAPTER

3rd CHAPTER
Procurement process

1st method: Direct negotiation

2nd method: Competitive negotiation

Execution
1. Internal &
external
capability for
implementati
on
2. Procurement
3. Contract
management

Process of competitive negotiation

1.
2.
3.
4.

Request proposal
Review the proposal
Negotiates contact terms & conditions
Select a bidder

Advantages of competitive negotiation

1. Bidders are creative and innovative
2. Reduce the incentives for bidders
Disadvantages of competitive negotiation
1. Difficult to compare
2. Competition is less transparent
3rd Method: Comparative bedding
Process of Comparative bedding
1.
2.
3.
4.
5.

Public notification of tender

Contracting or marketing to potential bidder
Pre-selection
Tendering
Transition

Request for proposal (RFP)

Request for quotation (RFQ)

END OF 3RD CHAPTER

4TH CHAPTER

Risk management in PPP

Definition of Risk management

Risk management is the process of identifying, analyzing and addressing
significant risk on an ongoing basis.

Risk analysis:
Risk allocation:
Types of risk:
1. Retain risk
2. Transferable risk
3. Shared risk
Risk identification
1.
2.
3.
4.
5.
6.
7.

Establish the context

Identifying the risk
Analyzing the risk
Evaluating the risk
Developing the risk mitigation strategy
Maintenance and implementation of the risk mitigation strategy
Consulting and communicating the risk with management

Risk register

Financing of PPP
Sources of Private finance institution
1.
2.
3.
4.
5.
6.
7.

Commercial bank
Capital market / Bondholders
Equity fund
Collateral
Compensation of project company
Buying a service not an asset
Performance related rewards

Sources of public financing

1.
2.
3.
4.
5.
6.
7.

Government support
Development finance institution (DFI)
World bank
African development bank
Asian development bank
The European bank for reconstruction and development
The inter American development bank

End of 4th chapter