The private sector invests little in the country's infrastructure with their reluctance mainly stemming from the prevalence of corruption and a lack of governance, said speakers at a roundtable in Dhaka yesterday.

Other factors include high project costs, implementation delays and slow returns, Mirza Azizul Islam, former adviser to a caretaker government, told the event jointly organised by Bangla daily Prothom Alo and Keystone Business Support Company at the CA Bhaban.

Infrastructure development projects are implemented very slowly, said Humayun Rashid, a director of the Dhaka Chamber of Commerce and Industry.

“The government will have to act properly to improve its project development process,” he said.

Rashid, also the managing director of Energypac, suggested that the government form an infrastructure regulatory authority to monitor management of relevant projects.

Before searching for the financing, the issues holding it back should be addressed, said Faisal Ahmed, chief economist of the Bangladesh Bank.

He said the present environment is favourable for investment in Bangladesh compared to that in other developing countries because of high national savings and reasonable inflation.

The economist suggested that banks assess the nature of risk of infrastructures before providing finance. He emphasised developing the bond market and strengthening the primary market to finance the infrastructure sector.

The government should formulate rules allowing the insurance sector to invest life funds in infrastructure development projects, said Nizam Uddin Ahmed, chairman of Meghna Life Insurance.

He said the insurance sector is holding life funds worth Tk 30,000 crore which can be a source of financing for infrastructure development.

This huge amount of money remains idle in banks from where insurance companies get only interest, he added.

Ahmed said government guarantee was also needed to use the life funds because returns from infrastructure investment was very slow, which might put insurance businesses at risk.

The government will need $100 billion in the next five to seven years for infrastructure development and private banks have the capacity to come up with the finance, said Sohail RK Hussain, managing director of City Bank.

He too stated of the necessity of government guarantee to woo funds.

“Local banks can also play an intermediary role to bring foreign investment,” he said.