DESPITE the well-documented link between high-calibre infrastructure and economic expansion, Government which is operating on a razor-thin budget following current economic turmoil may not be equipped to make the necessary investments.
In response therefore Government must tap into the private sector for capital, technology, and expertise to finance, develop, and manage public-sector infrastructure projects and this is because when coupled with the right sets of policies and institutional environments, these public–private partnerships (PPPs) can also become catalysts for economic growth.
Essentially Government has made steady progress towards the PPP agenda. The National PPP Policy was approved in 2012. In line with the policy, the Public Private Partnerships Directorate (or the PPP unit) has been set up at the Ministry of Finance. The formulation of the PPP legislation is also at an advanced stage, the Draft Bill is finalised and due for tabling in Parliament.
The overarching intent of the PPP legislation is to ensure that best practices are followed during all phases of a PPP project development cycle. To ensure this, the legislation contemplates that a sequence of reviews are made and corresponding approvals provided by a PPP Committee that is constituted as per provisions of the legislation.
Quite fairly, PPPs are a relatively new discipline in Namibia, and to this end the PPP unit facilitates a number of capacity development initiatives. This is done through a combination of structured training programmes, knowledge sharing discussions with both public and private sector organisations, as well as forum presentations and media publications. Through these capacity building initiatives Government attempts to emphasise that core principles of value for money, affordability, and competitive procurement must be adhered to in order to ensure PPPs that are successful and are in public interest.
On the other hand and in order for PPPs to work Government needs to always ensure that clear and upfront articulation of project output parameters is a pre-requisite to ensure that all initiatives are aligned to the public needs. This is also important to facilitate competitive procurement, such that financial offers from various competing bidders are truly comparable. Finally, a clear articulation of project requirements is essential for inclusion in to a PPP agreement such that responsibilities of the private sector are unambiguous.
Lastly, it must be highlighted that PPPs are not the best approach in every instance, and that poorly conceived PPP projects may lead to excessive or unintended fiscal burden. Government needs to ensure that in cases where a PPP approach is contemplated, project development and operation risk is optimally allocated to the private sector. A value for money check is also a requirement while assessing the feasibility of a PPP initiative – to test that such an approach shall be cost effective as compared to direct Government financing.
Confidente. Lifting the Lid. Copyright © 2015