Letsholo bemoans lagging approach to PPPs
Challenges Govt to allow the private sector to take the lead
Member of Parliament for Kanye North, Thapelo Letsholo says it is disheartening that since the launch of Public Private Partnership ( PPP) Policy, 20 years ago, there appears to be no progress at all.
He said this slow progress has to be met with specific and urgent corrective actions. Minister of Finance and Economic Development, Peggy Serame has stated that as part of efforts to streamline the implementation of PPP, the new Public Procurement Act elaborates provisions to guide the execution of PPP projects. The guidance on the procurement of PPP projects, she said, has in turn been expanded in the PPP Regulations, which form part of the comprehensive Public Procurement Regulations.
“In addition, the planned review of the Public Finance Management Act ( PFMA) during the course of the next financial year, also provides an opportunity for improved implementation of PPPs in the country by addressing among others; issues of Government guarantees, fiscal commitments and contingent liabilities. All these should further improve the enabling environment for private sector participation in the provision of infrastructure and infrastructure- related services,” said Serame when presenting budget proposal for her ministry.
Letsholo has urged the ministry to accelerate the implementation of all the other stated projects including the reclamation and Treatment of Gaborone Wastewater for potable use, the SehithwaShakawe and FrancistownNata roads, cross border railway projects to South Africa and Zambia, as well as the construction of student accommodation and teachers’ housing.
“Another glaring opportunity in so far as PPP opportunities is concerned is that of a suitable hospital in Kanye. This hospital is such a significant and urgent need that we have to explore any and all possibilities to bring it to life. A PPP model for this exists in neighbouring South Africa as an example. The Nkosi Albert Luthuli Central Hospital is the PPP hospital situated in Durban. The value to Government of this hospital is about R4.5 billion in a 15- year contract. I agree with the Minister that it is essential for Government to fully evaluate the fiscal commitments and risks that may be entailed in long term PPP contracts. This is because not all projects lend themselves well to a PPP. Examples around the world have shown that typically large complex projects which are beyond the budget of a government and have the possibility of a recurring future income, best lend themselves to PPP programmes,” Letsholo told Parliament.
The MP pointed out that in identifying and earmarking potential PPP opportunities in Botswana, Government needs to understand and accept that PPP requires a different paradigm of business thinking and not the typical bureaucratic thinking of Government. On this basis, my view is that the current practice for PPPs, where Government identifies the PPP opportunities, does the feasibility study and then goes out to tender is not ideal, he argued. Letsholo explained that Government does not have the requisite business mind. According to the legislator, Government must allow the private sector to identify and articulate the opportunity that they see and make viable unsolicited proposals.
“After all it is their money. The only way PPPs can work and be implemented expeditiously is through unsolicited bids, but it is taking too long for the policy or the Act to be amended to include unsolicited bids. This is now more than urgent,” he said.