The government on Monday approved a proposal to form a Tk 1 billion fund to provide technical assistance to the projects being implemented under public-private partnership (PPP).

The approval came at a meeting of the Cabinet Committee on Economic Affairs with Finance minister AMA Muhith in the chair.

The meeting also approved a set of guidelines, prepared by the Finance Division, for some mega projects including deep-sea port, metro rail and elevated expressway.

Besides, the cabinet body also okayed a proposal to spend up to 30 percent of the projected expenditure of Viability Gap Funding (VGF) under the PPP projects.

The government, however, failed to spend any budgetary allocation for the PPP projects in the last three fiscals.

“Since coming into power, the government has allocated more than Tk 35 billion for PPP projects. But in the last three and a half years, the finance ministry failed to spend a single taka from the fund other than making a policy and setting up an office in this regard” a finance ministry official said.

According to the draft technical assistance guideline, the revolving fund will be managed by the PPP office. Financial assistance from development partners will be accepted in the fund.

The assistance to be given to PPP projects will later be deducted partially or in full from successful bidders.

The technical assistance may be used in pre-feasibility and detailed feasibility studies, purchase processing, tender document preparation and evaluation, completing technical, financial, commercial and legal assistance activities of the project.

Besides, the VGF fund will be released on the basis of the equity of private entrepreneurs and will be given on a month, quarter, half-year and yearly basis.

According to the draft guideline, the VGF assistance will be given to only those projects which will be completed on build, operate and transfer basis.

For getting such assistance, the bidder must be selected through competitive bidding and the economic rate of return of the project must be equal or more than the level fixed by the PPP unit of the Finance Division.

The Finance Division will change the level time to time through issuing circulars.

An official of the Finance Division said the guidelines were prepared after consulting with the technical assistance team of the Asian Development Bank, taking opinions of the stakeholders and reviewing the guidelines of different countries.

The government earlier adopted a public-private partnership (PPP) policy. As per the policy, a separate PPP office was established under the Prime Minister's Office. A chief executive officer was also appointed to the PPP office.

Besides, a PPP unit was formed at the Finance Division to facilitate technical assistance the PPP projects.

The government launched the PPP initiative in fiscal 2009-10, allocating Tk 25 billion in the budget in a bid to involve the private sector in big infrastructure, power, and energy projects.

The cabinet committee also gave its nod to a proposal of commerce ministry to exempt Trading Corporation of Bangladesh from public procurement rules for another three years to facilitate import of seven essential items quickly to keep the prices stable.

The exemption will allow the state-run TCB to import edible oil, sugar, pulse, gram, onion, date and baby foods quickly without following the mandatory PPR to speed up the process of market intervention ahead of the Ramadan, officials said.

TCB has been enjoying such exemption since 2009, which will expire on May 26 this year.

The Daily Sun/ Bangladesh/ 15th May 2012