PPP law ready by mid-year

A Public-Private Partnership (PPP) law is expected to be passed by the middle of this year to leverage public and private sector resources and expertise in order to close the infrastructure gap and deliver efficient public infrastructure and services.

The law will support the implementation of the national PPP policy that was launched by the government in 2012. It is expected to give confidence to both local and international investors who would want to participate in PPPs with the government.

The law will also ensure that the gaps in the Public Procurement Act in relation to PPP procurement practices and processes are addressed, and provide a clear definition of PPP projects and structures in a way to distinguish them.

Under the legislation, Parliament shall be the final approving authority for PPP projects -- subject to the provisions of the policy -- to ensure the protection of the public interest.

The National Development Planning Commission (NDPC) has been mandated to prepare a national infrastructure plan for Ghana, and every PPP project initiated by contracting authorities shall emanate from this plan.

The Attorney-General’s Department, with the assistance and advice of the Legal Division of the Ministry of Finance and Economic Planning (MoFEP), shall ensure the conformity of all project agreements with Ghanaian law.

The country’s development partners, including the World Bank and DFID, are supporting a project to move the PPP process forward with a total of US$30 million over a five-year period. This is to assist in the improvement of legislative, institutional, financial, fiduciary and technical frameworks for PPPs and develop bankable projects.

The focus of the project is to build capacity in the various government agencies and assist them in developing and delivering PPP projects in the various sectors, making them bankable and sustainable.

Ghana is presently faced with a huge infrastructure gap averaging US$1.5 billion per annum for the next decade. This is required to bring the nation’s infrastructure to the recommended status of a middle-income country.

“The constraint of available resources provides the government with the ability to look for other innovative means of financing and procuring these projects, thereby expediting the delivery of the required infrastructure,” Mr. Paul Victor Obeng, Chairman of the National Development Planning Commission (NDPC), told journalists at a workshop on PPPs in Accra.

He explained that the law has been designed by a private legal firm with a lot of stakeholder consultations aimed at meeting best international standards to attract the needed investment for the country's development.

Mr. Obeng said over the years, governments have been unable to provide adequate infrastructure due to lack of resources, technology and entrepreneurship.

“The PPP policy is expected to encourage and facilitate investment by the private sector by creating an enabling environment for PPPs where value-for-money could be clearly demonstrated -- as well as to increase availability of public infrastructure and services and improve service quality and efficiency of projects.

"It is also to encourage and promote indigenous Ghanaian private sector participation in the delivery of public infrastructure and services.”

He was confident that there would be continuity and commitment to roll-out PPP infrastructure projects for socio-economic development.

Mrs. Magdalene Apenteng, Director of the Public Investment Division of MoFEP, said: “PPPs have become one of the important tools to facilitate the implementation of the nation’s critical investment programmes. The adoption of a PPP framework therefore reflects the government’s desire to improve the quality, cost-effectiveness and timely provision of public infrastructure and services in the country.

“The government is mindful that PPPs are not a panacea for all public infrastructure investment needs, and therefore the PPP framework should be viewed as a complement to, and not a substitute for, the government’s continued commitment to open up key services markets to competition.

“PPPs should only be considered where they can provide greater value for money than other fully-private or fully-public service delivery options.”

She added that the private provision of public infrastructure enables the government to use the private sector’s delivery and project completion expertise and capabilities for the benefit of the people. It also helps the government better understand the whole life-cycle cost of investments and enables more rigorous project assessment.

Mr. Ekow Coleman, PPP Adviser/Financial Analyst at the Public Investment Division of the Ministry of Finance, said: “PPP initiatives are intended to apply to all sectors and levels of government and shall be pursued where they represent priority projects, are affordable to government and consumers, represent value for money and allow for appropriate risk transfer.

“Sector-specific PPP policies may be developed to accommodate the needs of specific sectors consistent with the overall government PPP policy.”

A PPP is a contractual arrangement between a public entity and a private sector party with clear agreement on shared objectives for the provision of public infrastructure and services traditionally provided by the public sector.

Ghana’s first attempt at PPPs was in 2004. However, some inadequacies, including the absence of a policy framework, led to difficulties in carrying the idea forward.