THE INEVITABILITY OF PPP

The authorities must ensure the enabling environment is attractive
Acting President Yemi Osinbajo last week underlined the necessity for collaboration between the public and private sectors if we must grow the national economy. “The real challenge is how to efficiently and faithfully implement these great ideas. I think for effective delivery, this partnership with the private sector is undoubtedly the way to go,” said Osinbajo while addressing the third quarterly presidential forum.

All over the world, countries are falling back on the private sector to deliver additional public services, particularly basic infrastructure projects, through public-private partnership (PPP). These projects are mostly long-term undertakings which had proven over the years to be one of the best ways to foster development. A PPP project is essentially a public service which is operated through a partnership of government, and private investors who take charge of the operational and technical risks. The funding of the projects could be partial or total, depending on the agreement, but the ownership remains with the government.

The PPP projects are particularly appealing because of quicker service delivery, besides reduction in upfront cost and operational risks. The execution of such projects is becoming increasingly popular among governments because of the growing pressure on public finances. For Nigeria, the task of providing new infrastructure or rehabilitating decayed ones is made more difficult with shrinking incomes from low oil prices at the international market. Even the routine service of paying workers regularly is becoming an uphill task for many states as well as the federal government.

Therefore, Osinbajo was apt in summing up the dire situation on ground when he invited the private sector to wit: “We will make ourselves accessible to you as much as possible.” But against the background that Nigeria is not just opening its doors for private sector investors for this alternative approach to infrastructural procurement, there are questions about whether government can walk its talk.

Perhaps the most noticeable of such projects is the domestic terminal, Murtala Muhammed Airport2 (MMA2) concessioned to Bi Courtney and which recently marked its 10th anniversary. The Federal Airports Authority of Nigeria (FAAN) has also concessioned many projects and services in the past. Projects like the Port Harcourt International Airport, Lekki-Epe International Airport, and the Fourth Mainland Bridge project in Lagos are reportedly in their planning stage of concession. The construction of the Second Niger Bridge in Anambra was awarded on PPP arrangement.

However, the trouble with many of these projects is with their implementation. Many concessioned projects in the past ended up in acrimony and disagreements while some have led to outright cancellation by the government. Indeed, some of these concessions are in court waiting to be decided while others have been forcefully terminated.The Lagos-Ibadan Expressway redevelopment project, for instance, suffered such fate. So was the recently rehabilitated Nnamdi Azikiwe International Airport, Abuja. It was concessioned to a consortium in 2006 on build, operate and transfer contract for 25 years. But few months after the company had paid some huge amount of money as non-refundable fees, the concession was revoked.

The challenge with many of the concessions was that the protection of public interest was most often not the overriding consideration and in instances where they were, those who represented the government did not pay attention to critical details. Yet it is absolutely essential that those entrusted with the duty to ensure that the government gets good bargain in any concession must be competent professionals with the requisite skills to understand the agreements they are entering into. And they must be above board in their dealings.
Whatever may be the excuses for reneging on some of the earlier concessions, they exposed the country to the charge of not respecting contractual agreements freely entered. Thus, if the new invitation is to be taken seriously, it is essential to reshape the prevailing perception about PPP projects in our country.