PPP Unit fails to bring results, oversight
Ministry of Finance has come under fire for lack of results and oversight from its PublicPrivate Partnership ( PPP) Unit.
The unit, which was established to facilitate the implementation of PPP projects in the country has been operating for a significant period of time without any tangible results to show.
A source has revealed to Botswana Guardian that a number of projects are being carried out in the country, especially by the councils, through PPP without any proper mechanisms and controls.
The new Public Procurement Act ( PPA) allows for Public- Private Partnerships but the lack of capacity in the various departments to execute such can lead to significant losses to government running to billions of Pula and put the government into serious debts”.
What makes matters worse is that the PPP Unit is a large organisation with significant overheads in terms of wages and operational expenses, yet it has failed to deliver on its mandate. Some PPP projects are being carried out by local councils without the involvement of the PPP Unit at the Ministry of Finance, effectively rendering the PPP Unit of no use.
Botswana Guardian has established that the lack of oversight and involvement by the PPP Unit has been a cause for concern, as it increases the risk of costly mistakes in the implementation of PPP projects. Globally, there have been instances where PPP projects have failed due to improper consultancy, lack of transparency and inadequate risk management. In light of this, the PPP Unit’s failure to oversee and guide PPP projects is a significant concern for Botswana. One such example of a PPP project that went wrong in Africa was the construction of the N2 Gateway housing project in South Africa. The project was a partnership between the South African government and private sector companies to build affordable housing units for low- income families.
However, the project was plagued with corruption and mismanagement, resulting in poor quality housing units being built and widespread protests from residents. A PPP deal in Ghana saw the government face significant losses due to poor contract management, resulting in cost overruns and delays. Similarly, a PPP deal in Kenya saw the government incur significant costs when a private company was unable to fulfill its contractual obligations, leaving the government to pay for the unfinished project. Without proper guidance, PPP projects can be a significant risk to governments and taxpayers, as they can result in costly mistakes and delays. A Procurement professional at the government enclave noted that “The failure of the PPP Unit to oversee PPP projects can be a costly mistake for the government. When PPP deals are not crafted carefully, they can result in significant financial losses for the government. “For instance, a poorly crafted PPP deal can lead to the transfer of too much risk to the government or the private sector, resulting in a suboptimal allocation of resources. Additionally, poor contract management can lead to cost overruns and delays, ultimately increasing the financial burden on the government.” He added that “Furthermore, PPP projects often require significant public funding and support, which can be a drain on government resources. When a PPP deal goes wrong, the government is often left to pick up the pieces, resulting in significant financial losses.
“Therefore, the proper oversight and guidance of PPP projects are essential for governments to avoid financial losses and ensure that public resources are utilised optimally.”
Sources have revealed that Botswana’s government must take swift action to address the lack of results and oversight from the PPP Unit. The government must ensure that the PPP Unit is properly staffed with skilled professionals and that it has clear guidance on its mandate and responsibilities, a source at the Finance Ministry said, adding that the government must also ensure that local councils are aware of the role of PPP Unit and are following proper procedures in implementing PPP projects. When quizzed on the cost of ineffective departments to the government, the Procurement professional commented that, “this situation is not unique to the PPP Unit, as many ministries have departments that produce no results but continue to consume public resources. “This results in a significant drain on government resources, which could be better utilised in other areas that would benefit the public. Government must take a more critical approach to assess the effectiveness of their departments and take appropriate action to improve their performance. “This could include restructuring or even dissolving departments that are ineffective and result in a waste of public resources.” Efforts to get a comment from the Ministry of Finance on the matter has been futile for the past two months.