Paul Victor Obeng, Chairman of the National Development Planning Commission (NDPC), has observed that public sector developed infrastructure suffers from delays, cost escalations, quality challengers and financing hiccups in Africa.
“Many infrastructure development projects by the public sector alone go beyond the standard tenure of four years of many governments, and many suffer from policy and budgeting instability as governments change; mainly in countries going through democratic transitions and learning experiences.
“In the process infrastructure development, delays incur avoidable excessive contract costs including pressures from labour and material prices indices,” Mr. Obeng told participants at the African Investment Forum 2012 held in Accra.
Making a presentation under the topic “Public-Private Partnership for Infrastructure Development,” Mr. Obeng said: “With the right policy and facilitating frameworks in place it should be possible to tap into the resources capacities of both the domestic and external private sectors to complement that of sovereign states.”
This, he suggested, will create a greater pool of financial, technological, human capital and entrepreneurial resources to aid the development of national infrastructure.
“In the midst of available world-wide pool of investable human and material for infrastructure development, there should be no reason why countries should squat over poor infrastructure and remain behind in the global race for competitiveness and development in the global village environment.”
He indicated that the partnerships the public and private sectors are forging, and should continue to forge, in the area of infrastructure development will require the two sectors to enhance the efficiency of human and material resources mobilisation and development, avoidance of waste, and efficiency of projects and management.
Outlining some innovative funding strategies for regional infrastructure projects, he explained development of vibrant capital markets in the sub-Saharan African countries is meant to serve as a platform for mobilisation of funds for investment in infrastructure.
“Considering that the poor suffer more from the infrastructure gap, countries may negotiate for grants and soft loans from development partners to go into financing infrastructure which benefits the poor such as water, social housing, and transport among others.
“The infrastructure needs of countries are of various types within the economic and social sub-sector; these include energy, multi-model transport systems, ICT Backbone, water management and supply systems, social housing, health and educational facilities, and justice facilities and many more.
“The sum total of the investment costs for all the components are very high and go beyond the capacities of national; public sector budgets,” Mr. Obeng remarked.
Sir Alan Collins, Director General Commonwealth Business Council who was chairman of the session, urged African countries to focus on the development of infrastructure, small-and medium-scale enterprise development as well as skills, and access to financing to make African countries more attractive to investors.
Mr. Marc Whittingham, President and CEO of the Canadian Commercial Corporation, explained that the benefit of employing PPP will include cost savings in efficiency and innovations from the private sector: public money does not begin to flow until the asset is fully operational, well-maintained and efficiently operated at the lowest cost possible.
He revealed that the Canadian government has established a PPP with US$1.2billion to help promote the development of the its PPP market, and that Canadian expertise in the PPP market cuts across a wide variety of sub-sectors, with particular emphasis on healthcare, education and transportation.
“PPPs create bilateral partnerships built on projects of mutual economic significance. This allows for development and prosperity of industries surrounding the project. It also helps in the opening up of non-traditional sources of supply, facilitating the creation of new markets, and creating and sustaining new employment with long-term implications on GDP,” Mr. Whittingham remarked.
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