Botswana can achieve more from PPPs � IMF
Pauline Dikuelo | Thursday July 20, 2017 18:00
The latest report, which was completed in February this year, states that the 2009 PPP policy is comprehensive and reflects many good practices, but also has some weaknesses, mainly that it does not explicitly apply to parastatals.
It states that a small number of PPPs were procured in recent years under the Public Procurement and Asset Disposal (PPADB) Act, even though the latter does not refer to PPPs and does not provide adequate guidelines on quantifying the fiscal implications of PPPs.
“More importantly, these PPPs were procured without the full involvement of the Ministry of Finance and Economic Development’s (MFED) PPP unit, which might expose the government to unquantified fiscal risks,” read the report.
However, the report suggested that government needs to strengthen the MFED’s oversight role in monitoring and assessing PPP projects as well as in reporting data on PPPs in a budget annex and by increasing and training staff in the PPP unit. Further, the report called for clarity on the legal and regulatory framework for PPPs either by amending the PPADB Act or by enacting a dedicated legal framework.
The report also noted that the development budgets of ministries are ring-fenced, although funds may be reallocated between recurrent and capital in the budgets adding that this sometimes results in ongoing projects being ‘squeezed’ for funding thus contributing to delays.
“There is sufficient cash available to fund all projects and any shortages are addressed through the Pula Fund (savings fund).
PPADB Act provides a framework for transparent and competitive procurement procedures for central government tenders and complies with good practice as the World Bank continues to provide support to procurement reforms,” read the report.
According to the report, adequate project management often undermines project implementation.
It states that the current project development management system, which is meant to track progress in implementing projects, is not functional and reports are generated manually sometimes with significant delay. It states that project managers for mega projects are not identified at the design stage, which could contribute to implementation delays and possibly cost overruns during implementation.
“The mission has learnt that in some line ministries, recently qualified and inexperienced engineers are managing large projects that require significant skills and knowledge.
The lack of experienced engineers could put government at risk of developing infrastructure, which needs to be replaced or repaired at significant cost,” stated the report.
The report also noted that a number of agencies are responsible for monitoring project implementation, but their roles are not clearly identified in policy documents leading to duplication and uncertainty.
While the National Strategic Office (NSO) monitors the implementation of all mega projects, and the GICO (Government Implementation Coordination Office) monitors implementation of priority projects, the report states that there is currently no definition of mega projects and it is not clear how the ministry plays a role in monitoring the financial aspects of large or mega projects.