The government of Bangladesh has provided for a number of incentives and benefits for PPP investors in its PPP policy framework. These include:
■ Viability Gap Financing: A budgetary fund to provide financial subsidy for PPP projects that have high socio-economic value but are not sufficiently commercially viable to be delivered on a PPP basis. Up to 30% of the total project cost can be subsidised either as part of a capital contribution during construction or in the form of annuity payments during operation. (Please refer to "Guidelines for Viability Gap Financing for PPP projects 2012" for more details.)
■ Fiscal Incentives: There are provisions permitting PPP investors to benefit from various fiscal incentives (for e.g. reduced import tax on capital goods, various tax holidays) to reduce the cost of implementing the project and to enhance viability of project.
■ Special Incentives (Non-Fiscal): Any specific project may get special incentives or other non-fiscal incentives to support the implementation of policy objectives or to enhance the ease and efficiency of delivering the project. These may include exemption from specific provisions related to insurance regulations, banking regulations, foreign exchange regulations etc.
■ Unsolicited Proposal: To encourage private investor participation and innovation in PPP projects, government has permitted the submission of unsolicited proposals for the delivery of PPP projects. However, to ensure openness and transparency unsolicited proposals are also subject to an open and competitive procurement process. The unsolicited bidder is incentivised through the application of either the Swiss Challenge System (where the unsolicited bidder is given the right to resubmit and enhance his bid) or Bonus System (where the unsolicited bidder is given a pre-agreed bonus to be applied during the evaluation).