Successful project development and the design of a contract agreement fair to all parties are extremely important for the motivation of the private sector in infrastructure development. However, these tasks require special skills and expertise that may not always be available to public sector agencies. The procedural matters in the selection and approval of private infrastructure projects should also be clear to all parties. Furthermore, the planning and implementation of private sector infrastructure projects need to be integrated with the national planning process. There is a need for an inside sponsor or a special unit for the accomplishment of these objectives.
In its first three years of operation, IIFC has gained considerable experience as an inside sponsor for the promotion of private sector involvement in infrastructure development in Bangladesh. Based on its experience, the following observations may be made which could be of relevance to other countries:
(a) The concept of a special PSP/PPP unit as the inside sponsor of private sector infrastructure projects needs to be discussed and understood more thoroughly. The discussions should include the prospective private developers or outside sponsors;
(b) Project recognition skills are extremely important for an inside sponsor and this can be ensured through a commercial focus. Success would depend greatly on the ability to manage risks in Stages 0 to IV;
(c) The concept, with some revisions based on the lessons learned, may be of assistance to countries which are facing difficulties in increasing private sector participation in infrastructure development;
(d) Pro-poor infrastructure activities are possible in the power, transport and water sectors. Pro-poor private sector projects should be given special attention to gain wider social acceptability of private infrastructure projects;
(e) The inside sponsor should match the technical, financial, commercial, legal and negotiation skills of the outside sponsor.