PUBLIC PRIVATE PARTNERSHIP
FRAMEWORK FOR E-SERVICE DELIVERY
September November 06, 2010
Background
• New Policy and Strategy for Public-Private Partnership
(PPP) was approved by the Cabinet and the gazette was
published on August 02, 2010 and replaced BPSIG
• The Guidelines for large, medium and small projects
have also been approved
Approach
• Definition: providing public goods and services using private
investment
• Office of the PPP: A strong and independent lead agency for PPP
under PMO, CEO directly reporting to the PM
• Streamlined and simplified process
– Formulation, appraisal, approval
• Empowered line Ministries/implementing agencies
• Flexibility: Generic Policy and Strategy has been proposed and
guidelines may be updated time to time based on the needs and
experience of implementation
• CCEA can specify guidelines
Policy and Strategy
• Sectoral coverage (SIC codes)
– BOTH infrastructure and service delivery
• Investment size
– Small (BDT <500 mil.), Med (BDT 500-2500 mil.), Large (BDT >2500
mil.)
• Financial participation by government
– 1. TA; 2. VGF; 3. Infrastructure Financing
• Linked components
– Implemented by government
– Financed by public and/or private funds
• Incentives to Private Investor
– Fiscal and Special incentives, particularly for pro-poor projects
Institutional Framework
Entity
Chair
ToR
PPPAC
Prime Minister
• Guide Office of PPP, line Ministries to expedite
• Break down bottlenecks
• Review progress at national level
CCEA
Finance Minister
• Approve guidelines, procedures, model docs
• Review contingent liability for Large projects
• Approve incentives
• Approve ‘In Principle’ for Med and Large; Approve Large
• Approve org. structure of PPP Cell
• Recommend PPP-related laws
Office of CEO
PPP
• Prepare model docs and guidelines for approval
• Promote PPP projects to investors
• To select a panel of experts and transaction projects
• Support line Ministries/impl. Agencies in formulation, prefeasibility, feasibility, technical and contractual parameters
• Build capacity of line Ministries/impl. Agencies on PPP
• Monitor PPP projects
• Prepare and manage budget of PPP Cell
Institutional Framework (cont.)
Entity
ToR
Line Ministry/
impl. agency
• Initiate, develop, pre-qualify, tender and award PPP projects
• Oversee implementation based on concession agreements
• Recommend incentives
• Proactively involve Office of PPP for own capacity building
Finance Division
• Issue procedures and guidelines for financial participation by the
government
• Approve funds for TA for proposed and VGF for selected projects
based on concession agreements
• Channelize funds for infrastructure financing
Planning
Commission
• Fast-track Linked Components (part of ADP)
• Review ADP to prevent duplication
Process by Size of Projects
Project
Identification
/ Unsolicited
Proposal
S: Line
Ministry/PPP
Cell/ Private
Investory
M: Line
L
Ministry/PP
Cell/Private
Party
M
L:
Line
Ministry/PPP
Cell/Private
party
Inprinciple
Approval
Feasibility
Study
Line
Minister
2-4 weeks
Line
Ministry/IA
4-8 weeks
CCEA
2-4 weeks
Transaction
Consultant
8 -20 weeks
CCEA
2-4 weeks
Transaction
Consultant
6-12 weeks
Request
for
Qualificati
on
Line
Ministry/ IA
4-8 weeks
Line
Ministry/ IA
4-8 weeks
RFP, Final
Approval
Negotiatio
n,
Contract
Award
Line
Minister
4-8 weeks
Line
Ministry/IA
4-8 weeks
CCEA
8-12 weeks
Line
Ministry/IA
4-8 weeks
OPPP
PPP Cell
Finance
Minister
6-10 weeks
Line
Ministry/IA
4-8 weeks
PPP Cell
OPPP
Monitoring
and
Evaluation
PPP Cell
OPPP
Process by Size of Projects
OPPP
Process by Size of Projects
OPPP
OPPP
PPP and e-Service Delivery
• The government has taken a two-pronged
strategy for building public-private
partnership:
– one is to attract investment for projects, where
building new infrastructure and expanding
existing infrastructure is the major component;
the
– second is to attract innovation and sustainability
of public service delivery to the citizens.
PPP and e-Service Delivery
• Service Delivery was focused
– Objective 2.a.: Spell out principles of partnership
with private sector for undertaking various
projects related to infrastructure as well as
public service delivery;
• Dominant role of private party is recognized
– Concept of PPP 3.d: In the PPP projects, the
private sector is the active party who undertakes
activities, depending on the model, starting from
the stage of conception and up to the stage of
operation and maintenance
Applicability of PPP
•
Any project that generates public goods and services may be
considered under the public-private partnership, if at least
one of the following circumstances exist for the project :
1.
2.
3.
4.
5.
The implementation of the project is difficult with the financial
resources or expertise of the government alone;
Private investment would increase the quality or level of service or
reduce the time to implement compared to what the government could
accomplish on its own;
There is an opportunity for competition, where possible, among
prospective private investors, which may reduce the cost of providing a
public service;
Private investment in public service provides an opportunity for
innovation; and
There are no regulatory or legislative restrictions in taking private
investment in the delivery of public service.
Sectoral Coverage
• Any project fulfilling one or more of above-mentioned
applicability criteria in any economic sector, according to
the International Standard Industrial Classification (ISIC)
of all Economic Activities, Revision 4, specified by the
United Nations, is eligible for PPP.
– 5.k: Telecommunication systems, networks and services
including information and communication technology (ICT) (ISIC
60-63)
– 5. n: IT park (ISIC 81-82)
– 5.o: social infrastructure e.g. health, education, human resource
development, research and development, and cultural facilities,
(ISIC 85-88)
– 5.p: e-service delivery to citizens (ISIC 85)
– 5. q.iii: Rural Internet projects (ISIC 61)
Eligibility Criteria
• Any for-profit or not-for-profit entity legally
registered in Bangladesh or abroad at the
time of submission of proposals in
response to Request for Qualification or
unsolicited proposals is eligible for
participation in PPP projects.
• However, at the time of contract awarding,
the foreign entity is required to be
registered as a legal entity in Bangladesh
Investment Size and Ease of Processing
• Small: ICT Projects fit mostly in this
category
– BDT <500 million
– Approval Authority: Line Minister
– No RFQ Stage
– Maximum 7 months for approval
Proactive role of a Ministry will be key
Financial participation of the Government
• Technical Assistance
–
–
–
–
Pre-feasibility and Feasibility study for projects
Preparation of RFQ and REP documents for projects
Preparation of concession contracts for projects
PPP related capacity building in the line
Ministries/implementing agencies and other relevant
agencies
– PPP related awareness building such as road show,
exhibition etc
Financial participation of the Government
• Viability Gap Financing
– Viability Gap Financing (VGF) is meant for projects
where financial viability is not ensured but their
economic and social viability is high.
– VGF could be in the form of capital grant or annuity
payment or in both forms
– VGF in the form of capital grant shall be disbursed
only after the private sector company has subscribed
and expended the equity contribution required for the
project.
Rural Internet, ICT Education, Public Access to ICT,
Poverty Alleviation Projects
Fiscal Incentives
• Reduced import tax on capital items under
PPP projects
• Tax exemption or reduced tax on profit
from operating/managing for a specific
time period
• Others specified by LM/ IA
Special Incentives
• Any specific project may get special
unique incentives with the approval of the
CCEA which shall be declared in the RFP
documents.
• Special incentives may be extended to
PPP projects targeted for rural or/and
underprivileged population
• Special incentives may be given to nonresident Bangladeshis (NRBs) to invest in
PPP projects.
Financial participation of the Government
• Infrastructure Financing
– The infrastructure financing is an arrangement
for extending financing facilities for the PPP
projects in the form of debt or equity through
specialized financial institutions
Suitable Models for ICT
• Swiss Challenge: Protecting IPR
Procurement Parameters of ICT Projects
under PPP
Revenue Generation
Potential
Services with full cost
recovery
Services with partial cost
recovery ( in many
cases,
fixed
cost
recovery
is
not
possible)
Public good ( citizens'
entitlement)
Selection Criteria
 Highest Composite Index on
KPI
 Lowest cost
 Highest revenue sharing
 Highest Composite Index on
KPI
 Highest fixed cost investment
by private sector
 Total lowest recurring cost
Business Models for PPP in ICT
E-service domain
Project financing mechanism
Returns to the private partner
Tax and Customs
User charges as fees for service enhancement
from citizens and businesses
% Share of the fees,
per transaction
% share of additional
revenues made possible
by improved audit and
collection programs
e-Procurement
User charges as fees for service enhancement
from participating government agencies,
subscription fees from prospective
suppliers
% share of the amount
of bid (with an
upper cap on the
total amount)
% share of the subscription
amount
Certification and
Licensing
User charges as fees for service enhancement
from citizens and businesses (in addition
to the usual fees charged for issuing
certificates and licenses)
% share of the service
enhancement fees
--
Social Benefits
Related
Viability gap funding
User charges as fees for service enhancement
from the government
% share of the service
enhancement fees,
per distribution
--
Health and
Education
Viability gap funding
User charges as fees for service enhancement
from the government
% share of the service
enhancement fees,
per distribution
--
Source: Evalueserve Research
Priority in PPP [WB, 2007]
ICT Projects
BCS
BASIS
Interested in PPP
Priority
Interested in PPP
Priority
Tax related

▲▲

▲▲▲
Social Benefits related

▲▲

▲▲▲
Property related

▲▲

▲▲▲
Agriculture related

▲▲▲

▲▲▲
Education based

▲▲▲

▲▲▲
Health based

▲▲▲

▲▲▲
Tourism related

▲▲
x
--
Tax related

▲▲▲

▲▲▲
Corporate Compliance related

▲▲▲

▲▲▲
e-Procurement

▲▲▲

▲▲▲
Auctions

▲▲

▲▲
Treasury Automation

▲▲

▲▲
G2C
G2B
Thank You