Understanding the Feasibility for FSM PPP Contracts and Reviewing Existing PPPSLA Contracts

PPP in the FSM sector is a relatively new phenomenon in Bangladesh and perhaps in other parts of the world as well. As a result, its important concepts such as the role of the government agencies, business risks allocation, performance targets, etc. will evolve over time as the sector matures. This relatively short study has attempted to look forward into the future of the industry and made some propositions with respect to the commercial and technical nature of the PPP business in the FSM sector. However, much more discussions need to take place with technical experts in the area, potential investors, government institutions and the lending institutions. The proposed nature of target collection ratio (FSCR), solids KPI (SKPI), liquids KPI (LKPI), risk analysis, allocation and mitigation, capital provided by LGI are all concepts that will evolve over time. Thus, the purpose of this report on understanding the feasibility for FSM in PPP contracts is to provide a likely direction that PPP may take in the FSM sector rather than a prescriptive answer for any particular LGI or situation in FSM.