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BIBM Seminar: Banking experts highlight 5 challenges to PPP implementation

2017-12-21 ppro


Banking experts on Wednesday pointed out five major challenges, including time and cost overruns, to implementing public private partnership projects. Separately, they also called for development of homegrown core banking software for more convenience, during a seminar held at the Bangladesh Institute of Bank Management.
While two research papers titled ‘Financial and non-financial issues in implementing PPP in Bangladesh’ and ‘An evaluation of core banking software in banks of Bangladesh’ were presented, banking and economic experts of the country also discussed about ways to overcome the challenges. Dr.Toufic Ahmed Choudhury, Director General of BIBM chaired the seminar. Bangladesh Bank deputy governor Abu Hena Mohd Razee Hassan, who was present at the seminar as chief guest. Dr.Prashanta kumar Banerjee, Professor & Director (RD&C) , BIBM delivered inaugural speech.

Deputy Governor said, PPP was a complex model and its success depended on a number of critical factors, constraints and challenges.

Razee Hassan said that two to four years were required to implement a new CBS and frequent changes often created problems. He called for adoption of quality software and improving quality of local software.

Bangladesh Infrastructure Finance Fund Limited executive director and CEO SM Formanul Islam said statistics show unsatisfactory success rate for PPP because the concept was still in its early stage of implementation as project results spanned from 15 to 100 years.
PPP would not be successful without a vibrant public sector and unless the government took more ownership, he added.
Former Meghna Bank MD Mohammed Nurul Amin said although PPP was a big part of the economy, lack of corporate governance existed in the projects.
The report also listed 10 constraints toward PPP implementation included five financial and remaining non-financial constraints. The major constraints included immature bond market, lack of long term financing, high cost of project financing, difficulties in raising adequate fund and high project costs.
Former Sonali Bank MD SA Chowdhury said more reforms were needed in PPP guidelines because the last decade was spent in learning corporate governance. He said, the institutions of PPP were shallow and there was no more than 50 per cent implementation of the projects due t lack of synchronization and coordination between public and private sector. Universal fund, bond creation and mix of loan and equity were needed to help the projects and lessons ought to be learnt from the successful implementation of mega projects in India, Sri Lanka and Malaysia, he added.


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