A book useful not only for undertaking new public enterprise projects but also for expanding existing ones

After independence of Bangladesh in 1971, the country has come a long way on the path of social and economic development passing a non-linear path of ups and downs facing several challenges and resolving those in a pragmatic way. 

The current state of Bangladesh's economy provides a 'model case' of development that other aspiring underdeveloped countries can use as a 'learning experience.' Many economists have referred to Bangladesh as a 'development surprise,' while others have referred to it as a 'development paradox,' but in my opinion, Bangladesh's experiences offer some valuable lessons to be learned, and as such, it is a 'model case.'

Models offer a framework and some 'stylised facts' to study a particular aspect, be it a physical infrastructure or a soft project like education, health, and information technology. The book under review written by Fouzul Kabir Khan, based on real life experiences, narratives of actors, beneficiaries, regulators and funding agencies is an important addition to our development discourse. 

The author in his preface rightly mentions that the book consists of good case studies for the students of marketing and finance. The author depends for data and information mainly on a public enterprise named "Infrastructure Development Company Limited (IDCOL)", where he was the CEO for a long time (1998-2007). 

His practical experience, formal education and training in economics, and analytical ability, particularly in the financial aspects of enterprises, have made this book an interesting read with some suggestions for future actions.

As the author emphasises the efficacy and breadth of services provided by public entrepreneurship in this book, he distinguishes between public entrepreneurship and public service. Public goods like education, health services, vaccination, roads, and highways are a bit different from services like gas, electricity, energy, water, and sanitation services, which are supplied by public entrepreneurs as well as private entrepreneurs at some prices (market and/or cost plus prices). 

But the distinction mentioned by the author is a little bit blurred because many public goods like education, health, water supply (bottled water) are also supplied by private enterprises. In contrast to private entrepreneurs, the main characteristics of public entrepreneurs are the absence of a high-profit motive (normal profit may be justifiable), the impact on a larger number of people, the reflection of felt needs (not necessarily based on market signals), the improvement of quality of life, and, most importantly, sustainable socio-economic and business development.

The book has 12 chapters. In chapter 1, the author describes the beginning of the Infrastructure Development Company Limited (IDCOL) activities. It started with the initiative of the World Bank to encourage private sector infrastructure development activities which have been tried in Pakistan and Sri Lanka. The initial focus was on Solar Home System (SHS). The long-term impact of IDCOL was intended to be the encouragement of the private sector to step in infrastructure projects.

In chapter two, the process of recruiting professional and support staff is discussed. The basic materials on training and project financing prepared in the second stage of IDCOL establishment are discussed. The author's idea and impetus for writing a separate book on financing modes for large projects (published in 2002) are also mentioned here.

In the third chapter, the author describes some processes of fundraising and financing of some energy projects with a special focus on hurdles and challenges IDCOL faced. It serves as a wake-up call for other project implementers because it provides examples of problems encountered during the course of a project. The roles of donors like Islamic Development Bank, World Bank, and another organisation set up by the government namely Infrastructure Investment Facilities Centre (IIFC) have been described here. 

In chapter six, the partnerships with various organisations have been discussed. Chapter seven is quite enlightening because it describes the diverse nature of the projects that IDCOL began financing, namely Solar Irrigation Pumps, Solar Mini-Grids, and Domestic Biogas Plants. I am not aware of any large-scale replications of these projects, which appear to be an important aspect of energy-related projects.

In chapter eight, the author compares two different projects funded by the same donor agency, namely, the World Bank. As per the author, IDCOL's design, implementation process, and pricing policy were better positioned to succeed than the Private Sector Infrastructure Development Project (PSIDP) for medium and large infrastructures. To my mind, a proper methodology could be used to pool longitudinal and cross-sector data from these two projects in order to go into greater detail.

In chapter nine, the nature, challenges, and prospects of public entrepreneurship have been discussed. This chapter is quite useful not only for undertaking new public enterprise projects but also for expanding existing ones. 

In chapter ten, the author gives a macro view of IDCOL activities in relation to other similar projects. The roles of partner organisations like Grameen Shakti and BRAC have been highlighted. Such partnerships with implementing agencies, as well as the government and donors, are required for a project to be successful and sustainable. There were some private partners like Rahim Afroz and some other NGOs who also played vital roles. 

Chapter eleven provides some post-mortem findings on the decline of IDCOL's activities and performance following its peak in 2013. The author attributes the decline to free SHS distribution, rapid expansion without market assessment, and an unregulated private sector market.

The author's observations about the successes and failures of the projects of IDCOL are quite appropriate for the future of such endeavours, be it public or private. He rightly points out that the management board, donor, regulatory authority, government, and stakeholders all should work with shared views and common goals to make a project successful. 

It is not destiny or chance which should be blamed. William Shakespeare rightly said: "… when we are sick in fortune, often the surfeit of our own behaviour, we make guilty of our disasters the sun, the moon, and the stars."

There are many other successful public enterprises in Bangladesh, such as PKSF, LGED, and REB. Behind their success was a dedicated and efficient team of professionals, a strong governing body, support from government and donors, and most importantly, a transparent and accountable process of operations.

The book will be useful for teachers of business schools, business students, other academicians, researchers, and practitioners. This book, I believe, can be used by project designers, implementers, and evaluators. The print quality, binding, and cover page are all of very high quality.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.