Public-Private Partnerships (PPPs) offer an amazing array for any government looking to improve infrastructure and the delivery of social services to its citizens. PPPs can also help to accelerate economic growth and the eradication of poverty. For Bangladesh, PPP is an important tool to secure funding and expertise for infrastructure development. For over a decade now, the government of Bangladesh has invested greatly in building PPP frameworks to provide a conducive environment for the implementation of projects with private sector players. However, given the current PPP environment in Bangladesh, it is vital for the government to reconsider how it might interact with and manage private sector actors in the infrastructure sector. One of the main difficulties facing PPP projects in Bangladesh is raising private sector investment, particularly long-term funding. Although 17 infrastructure projects have PPP contracts, the majority of them have not yet reached financial closure. Additionally, there was little competition for several projects during the bidding process. Unfortunately, it will be increasingly difficult for the government to unlock private sector investment in the coming days if we do not get it right quickly.

Without a clear and stable framework of policies, laws, regulations, institutions, and procedures, the private sector typically hesitates to enter partnerships with the government. Although the government of Bangladesh is steadily building up the experience, knowledge, and institutions needed to foster a PPP climate favorable to partnering with the private sector, there still seems to be a gap between them. The business sector frequently lacks enough knowledge of government infrastructure plans. Even though some ministries have made their project pipelines public, some of this data is abstract and insufficient to support the private sector’s ability to make wise investment choices. By communicating with the private sector in a language they can comprehend, the government can perform better. The government might put its infrastructure projects together and advertise them to specific market players that are most qualified to take part in such projects. For instance, if a government wishes to build ports, roads, and bridges, these projects can be attractively packaged and given to the private sector, that are currently working on projects of a similar nature.

The government must give the private sector the freedom to create and propose infrastructure projects that are consistent with its strategic objectives. The private sector can be rewarded and compensated for innovative suggestions, and a dedicated fund can be established to assist in the drafting of infrastructure PPP project proposals. Most of the unsolicited PPP projects could not move due to lack of ownership by the government and for not providing the proper incentives for the private sector.

Since the government of Bangladesh is still implementing its first-generation PPP projects, it is crucial that it put up conscious effort to ensure the success of these pioneer initiatives. Governments must make sure that these initiatives establish a precedent that would make it easier for government to attract private investment at more favorable terms in the future. The PPP contractor (i.e., the private sector, including its investors, lenders, subcontractors, insurers, and so on) and the public entity entering the PPP contract are the only two parties to whom the risks can be transferred (ultimately, this risk rests with the users or taxpayers). Therefore, risks must be distributed fairly to be appealing to lenders and the private sector investors.

In order to determine how much it will cost private sector companies to prepare and submit a bid and whether it is worthwhile for them to participate in the process, they also need to have a thorough understanding of the bid process. All of the following information needs to be very clear and transparent: whether and when detailed designs are required; how long the bidding process will last; how workable, competitive, and transparent it will be; how the public authority will manage the partnership over time; what, if any, impact sector regulation will have on their contract; how the contract work will be supervised; and, most importantly, how committed the government is to the project.

Partnerships between the public and commercial sectors can significantly improve citizen living standards and boost competitiveness of the economy of Bangladesh. As crucial as pursuing privatization and restructuring of state-owned firms is creating an atmosphere that encourages competition in the private sector. Therefore, it is essential to keep decreasing the skewed regulations and interventions that affect the market, particularly in areas where state-owned corporations compete with private businesses. To prevent favoritism and reduce distortions in the competition for PPP projects, it is imperative to strengthen competitive neutrality and limit governmental help.