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Sunday, September 22, 2013

What is Public Private Partnership (PPP) and why is it important for a developing country like Bangladesh

Public Private Partnership (PPP) is the most important topic among developing countries of the world. Without infrastructural development it won’t be possible for a developing country to switch from developing to developed country.  For rapid infrastructural development public private partnership is the most. Public Private Partnership is the collaborative work of Government and Private Companies. A contract has been made between Private Party and Government where the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. Public Private Partnership is being considered worldwide as a unique window for the development of infrastructure sector for the countries.

Bangladesh is the latest country that has entered into the new investment paradigm of the PPP over last 4 years. Bangladesh Govt. has allocated lots of funds for implementing PPP projects for the last several years but has failed. The example of PPP projects are Dhaka Elevated Expressway and Gulshan- Jatrabari fly over. In PPP model, public and private sectors jointly undertake large projects on partnership basis. Through this model the private is encouraged to participate in large and long term infrastructural development. In PPP model, private sector arranges resources or bears the cost of building infrastructure. Under this model project are usually long term in nature and private entrepreneurs get recovery of their investment through toll revenue collection. The government, the private sectors investors and public can get all benefit if private sector can be enticed into infrastructure development under PPP. Since the private sector invests in the infrastructure development, there is no need for the government to take loans and pay interest. 

This does not excess pressure on money market, thereby diminishing upward pressure on interest rate and inflation. PPP facilitates the expansion of business. The private sector can engage in sectors where conventionally public sector invests. Since the private sector has to bear the cost resulting from accidents and damages, they use reliable and quality materials to ensure safety. Like many other successful government of different countries, our govt. should take more initiatives to make PPP programmer successful.   

3 comments:

  1. I hope this public private partnership definitely make development in many countries to grow higher in their infrastructure.

    ReplyDelete
  2. Short note are very easy and well decorated which given here, plz provide this type of important short note more .

    ReplyDelete