Public-private partnerships to ‘pump-prime’ the economy

Senior public sector officials from Africa, Asia, the Caribbean and the Pacific were exposed to a “broader menu of options” on how to fund hospital, school and public utility infrastructure projects with the private sector at a Commonwealth seminar last week.

In total, 22 officials specialising in infrastructure development from 15 Commonwealth countries and territories, including Botswana, Lesotho, Malaysia, Tonga and the Cook Islands, attended the week-long leadership training seminar in Singapore on public-private partnerships (PPPs) from 12 to 16 October 2009.

“With PPP you get value for money in terms of avoiding cost and time over-runs,” noted one of the participants, Michael Ohiani, General Counsel at Nigeria’s Infrastructure Concession Regulatory Commission.

“You are also able to get better service delivery - it’s a ‘win-win’ situation.”

Improving efficiency and delivery

Since its emergence in the 1990s, public-private partnerships have been widely used around the world to help fund social infrastructure projects such as hospitals, schools, prisons, water and sanitation.

The model is especially relevant for countries grappling with reduced spending power amid the current economic crisis, according to Hee Kong Yong, Public Private Partnership Adviser at the Commonwealth Secretariat.

“There is a huge demand for funding for infrastructure projects around the world,” Mr Yong, who led the workshop programme, explained. “Many of these countries, especially the developing economies, lack the public funds to implement many of these projects and hence have to rely on funds from the private sector.

“This mechanism has become more important in this present global credit crisis, when many countries look to pump-prime their economies whilst working hard to reduce their budget deficits.”

Sharing experiences

The seminar, held at Singapore’s Nanyang Technological University, was designed to allow the group to take part in panel discussions with experts - a lawyer, a banker, a project developer and an investor - involved in PPP procurement and delivery.

Site visits to a local desalination plant and the light rail transit system helped the group gain practical insights into the operation of public-private partnerships in Singapore.

Many of the participants presented reports on their own country’s experiences with PPP, examining differing legal frameworks, government support mechanisms and various setbacks they had encountered.

Ambassador Joan Underwood, Antigua and Barbuda’s Chief Implementation Officer, working directly for the Prime Minister, noted after one session that the training had exposed her to a “much broader menu of options” in the financing of infrastructure projects at home.

‘Value for money’

It was especially valuable given her government’s recent election pledges to part finance infrastructure projects using private funding, Ambassador Underwood added.

“We are at the beginning of the curve on this, but PPP is now part of the policy agenda. In the telecommunications sector we have the Antigua Public Utilities Authority, which provides landlines and is the internet services provider - it is at a point where new investment would be required to ensure it remains competitive,” she said.

“Traditionally we would be looking at government to provide that capital, but given the fiscal restraints that might not be as viable. It could be advanced as a PPP so the necessary improvements can be obtained and government can still have some control.”

Professor Robert Tiong Lee Kong, who helped tutor the participants, praised PPP as a way of gaining “higher levels of value for money” for government-backed infrastructure projects as well as boosting jobs during the global economic crisis.

“Governments can use PPPs to create jobs when most workforces are affected by economic crises,” he said.

“But above all they allow governments to keep control on output quantity and quality. A public-private partnership enables considerable leveraging of each partner’s resources and strengths, and results are often attained in less time, at lower cost and with greater sustainability.”

The seminar was organised and sponsored by the Commonwealth Secretariat through the Commonwealth Fund for Technical Co-operation (CFTC), and Singapore’s Ministry of Foreign Affairs and Singapore Co-operation Programme.

Key Links:

• Country Profile: Singapore
• Public Sector Development