PPPs: Threats and opportunities for Botswana
Pauline Dikuelo | Friday March 4, 2016 12:41
But critics have always thrown to the fore questions such: Is the economy ready to foster into such partnerships; do we have the necessary expertise and experience? BusinessWeek Staff Writer PAULINE DIKUELO caught up with experts at a recent PPPs seminar organised by the British High Commission and tapped their views on Botswana’s potential to fully exploit such partnerships
A PPP is a contractual arrangement between a government entity and a private firm in which the private firm designs, builds, maintains and finances public infrastructure or the other way round. It is intended to transform government departments from being owners and operators of assets into knowledgeable purchasers of services from the private sector.
Efficiency gains that could be realised by entering into PPPs, will be an opportunity to develop citizen entrepreneurship and also leverage on the abundant liquidity in the domestic market especially pension funds.
Whilst PPPs can provide efficiency in the use of public resources, they can also negatively affect public financial management if not properly monitored especially as issues of incompetence, efficiency and lack of quality have rocked the construction industry. This has been attributed to government not taking their role in monitoring of projects especially as it appears that contractors see their involvement only as a profit motive and nothing beyond that.
Chairperson of UK PPP Advisory Board, John Davie argues that Botswana is not ready for PPPs. He says the country is rushing into the concept and feels that the society still needs to understand the PPPs concept first as most of the entrepreneurs feel the PPPs are just about finance, involving the private sector, privatising simple concessions or outsourcing. “This is where they are getting it all wrong, instead PPPs are about better procurement, better strategic planning, public sector reforms as well as sharing of risks between the parties,” he reveals.
“The government needs to explain the PPPs policy to the public as it seems like citizens do not understand it and its benefits but rather see the involvement of the private sector as a profit motive coming in government service delivery. In order for people to back it, it needs to be discussed and understood,” he says.
According to Davie, public sector training is needed locally to help improve technical knowledge about the PPPs, its operations and how to implement it successfully.
He suggests the public sector should have a distinct role with clear responsibility, be stable and prepared for a long term commitment as well as have policies in place ready to deal with corruption.
“The country needs to implement mechanisms for citizen participation to ensure citizen consultation, transparency and community representation on key decision regarding the PPPs.”
However Business Botswana president, Leta Mosienyane is adamant that PPPs should be implemented now, as they would reform the economy, help in the efficiency of procurement as well as create jobs.
“Whether we are ready or not, it has to be done, we have to go through it to learn. Mind you, most of the countries that have successfully implemented it started like us,” he says.
Mosienyane says the country needs the right expertise and experience, noting that until they acquire that, the country will rely on consultants. Locally there are some PPPs examples, which include the upcoming leather park in Lobatse as well as the government has been involved in the development of the facilities management strategy, independent power producers’ transactions and some staff housing. Others include the SADC headquarters building in which government has a huge stake, management contract for the central medical stores as well as output and performance-based roads maintenance.
According to secretary for development and budget at the Ministry of Finance and Development Planning (MFDP), Cornelius Dekop the government only started making serious pronouncements on the need for private sector participation and public-private partnerships from NDP 8 onwards.
“Government took a significant step forward in PPPs when the policy and implementation framework was adopted in 2009. The objective of this policy was to ensure that the policy and legal landscape is amendable to PPP and also give guidance to implementation,” explains Dekop.
A decision was taken to establish a PPPs unit in the MFDP and the set up of such body is ongoing with the appointment of a head imminent. In the meantime, there is a PPPs Appraisal Committee within the MFDP comprising officials of the ministries, which include, Ministry of Infrastructure Science and Technology (MIST), PEEPA and the Attorney General’s Chambers as members.
The brief of the Committee is to appraise any PPPs proposals from implementing agencies.