World Bank raises red flag on PPPs

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga

THE World Bank says a num­ber of gov­ern­ments across the globe fall short of the gen­er­ally ac­cepted good prac­tices re­quired for suc­cess­ful im­ple­men­ta­tion of Pub­lic-Pri­vatePart­ner­ships.

A pub­lic-pri­vate-part­ner­ship (PPPs) is a long term con­tract be­tween the pub­lic sec­tor and a pri­vate com­pany or a con­sor­tium of pri­vate com­pa­nies of­ten cov­er­ing con­struc­tion, main­te­nance and fi­nanc­ing of in­fra­struc­ture projects.

Zim­babwe has em­braced the model as part of the coun­try’s ef­forts to lure in­vest­ment and pro­mote eco­nomic growth and re­cov­ery in dif­fer­ent sec­tors such as in­fra­struc­ture, min­ing, tourism, agri­cul­ture and man­u­fac­tur­ing.

In its new Bench­mark­ing PPP Pro­cure­ment 2017 re­port, the World Bank Group re­veals that:

“Many economies are yet to adopt broadly recog­nised good prac­tices to pre­pare, pro­cure, and man­age Pub­lic-Pri­vate Part­ner­ships (PPPs)”.

The re­port flags po­ten­tial im­prove­ments that can help gov­ern­ments fill the gap in an ef­fort to pro­vide bet­ter PPP pro­cure­ment and en­able bet­ter in­fra­struc­ture ser­vice de­liv­ery to all.

It bench­marks gov­ern­ment ca­pa­bil­i­ties in 82 economies across four key ar­eas namely PPP prepa­ra­tion, PPP pro­cure­ment, un­so­licited pro­pos­als, and PPP con­tract man­age­ment.

Across the four ar­eas mea­sured, the data finds that most economies fall short of recog­nised good prac­tices.

The re­port points out that project prepa­ra­tion and con­tract man­age­ment are the two ar­eas where a sig­nif­i­cant num­ber of coun­tries per­form poorly.

The av­er­age per­for­mance of each of the cat­e­gories varies across re­gions and in­come level.

“The re­port aims to in­form de­ci­sion-mak­ing on the de­sign of PPP pro­cure­ment poli­cies and reg­u­la­tions by com­par­ing economies to recog­nised good prac­tices that en­sure trans­parency and en­cour­age fair com­pe­ti­tion,” says World Bank se­nior econ­o­mist Ms Fer­nanda Ruiz Nunez, quoted in the re­port.

“There is con­sid­er­able scope to im­prove prac­tices around PPPs, in­clud­ing around dis­clo­sure of in­for­ma­tion.”

The re­port high­lights that a trans­par­ent in­for­ma­tion sys­tem is es­sen­tial to mon­i­tor and man­age PPP con­tracts. None­the­less, only 16 per­cent of the economies mea­sured re­quire data to be pub­licly avail­able.

“This bench­mark­ing ex­er­cise is the first at­tempt to col­lect and present sys­tem­atic data on PPP pro­cure­ment on a large scale by pro­vid­ing com­pa­ra­ble data on the reg­u­la­tory frame­works govern­ing the pro­cesses,” said the World Bank se­nior pri­vate sec­tor devel­op­ment spe­cial­ist, Ms Ta­nia Ghos­sein.

“It analy­ses the reg­u­la­tory frame­work at the na­tional level us­ing a high­way trans­port project as a case study for com­par­i­son pur­poses and presents a pic­ture as of the end of March 2016.”

The World Bank stated that when de­signed well and im­ple­mented in a bal­anced reg­u­la­tory en­vi­ron­ment, PPPs can bring greater ef­fi­ciency and sus­tain­abil­ity in pro­vid­ing such pub­lic ser­vices as water, san­i­ta­tion, en­ergy, trans­port, telecom­mu­ni­ca­tions, health care, and ed­u­ca­tion.

“Ev­ery coun­try has its own unique chal­lenges, pri­or­i­ties, and fi­nan­cial con­straints. In some cases, PPPs can bring great ben­e­fit by lever­ag­ing the man­age­ment ca­pac­ity, in­no­va­tion, and ex­per­tise of the pri­vate sec­tor, while at other times a tra­di­tional pub­lic sec­tor ap­proach could be more ap­pro­pri­ate,” said the fi­nan­cial in­sti­tu­tion. — @okazunga

we put it to you that if we ad­dress this ad­e­quately we will be shocked at our po­ten­tial and max­i­mum util­i­sa­tion of re­sources there­after. Trust has be­come the cor­ner­stone for eco­nomic re­vival. It’s a value that brings a com­par­a­tive ad­van­tage to those that carry it as it brings an aura of great busi­ness acu­men. With­out trust we are noth­ing but in­di­vid­u­als with a fal­lacy of try­ing to achieve the same elu­sive goal. Pol­icy im­ple­men­ta­tion needs trust no mat­ter how painful they could be. And this trust prin­ci­ple has to be­gin as an in­di­vid­ual value sys­tem.

We sol­dier on trust­ing that things will be al­right. We go through tough times trust­ing af­ter this or­deal it will be happy days. One as­pir­ing en­tre­pre­neur asked me but “. . . but Mr Brown how do I trust them when they can’t even trust them­selves?” We trust this has not reached such lev­els be­cause they could be ir­re­versible to sal­vage any­thing in such an en­trenched sys­tem. In our­selves we trust. In each other we be­lieve. To­gether we do it with faith.



Mor­ris Mpala is the man­ag­ing di­rec­tor of MoB Cap­i­tal Lim­ited, a Bu­l­awayo head­quar­tered mi­cro­fi­nance in­sti­tu­tion with foot­print across the coun­try.

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