News (150)

Kenya in major policy shift on support for PPPs

In a major policy shift on support for PPPs, government support measures (GSM) will “only be issued in very exceptional circumstances for projects that are considered strategic and that are of public interest”. This decision was taken after it became apparent that private investors under the PPP framework have been abusing the government support measures exposing taxpayers to potential losses of millions of dollars.

Kenya in major policy shift on support for PPPs

Over 70 projects being implemented under the public-private partnership framework in Kenya face an uncertain future, after a government decision to withdraw financial and risk guarantees. Despite a push by the government for the private sector to be actively involved in cash-intensive infrastructure projects, the National Treasury has unveiled a new policy that is bound to have far-reaching ramifications for PPP projects.

IL&FS crisis may sound death knell for PPP

The default crisis that has struck IL&FS (largest Indian shadow banks), flagbearer of the public-private partnership (PPP) programme, may be the last straw for this once-promising avenue of infrastructureNSE -3.24 % development, experts and executives said, adding that the government will have to take over that role once more. The private sector’s enthusiasm for investment in infrastructure has in any case been waning for some time now, they said.

The World Bank is urging the government to promote public-private collaboration

The World Bank is urging the government to promote public-private collaboration to foster “inclusive urbanization.” Stephanie von Friedeburg, chief operating officer at the World Bank Group's International Finance Corporation, “said during the 2018 Annual Meetings of the International Monetary Fund and World Bank that mayors and their local administrations could not face the challenges alone. (…) Von Friedeburg explained, while the government could enforce smarter regulations, the private sector could also finance infrastructure projects through instruments such as green bonds or public-private partnerships.” National Development Planning Board head Bambang Brodjonegoro advocated for “responsive” regulations. “Research organization McKinsey Global Institute director Jonathan Woetzel concurred, saying that technology could be a tool and an enabler to reduce negative externalities caused by urbanization.”

"The PPI fits into a vision for the state"

Retired general Oswaldo Ferreira, who is “tasked with debating infrastructure policy proposals for the campaign of Jair Bolsonaro (Social Liberal Party, PSL) campaign,” and is likely to be transportation minister should Bolsonaro win the elections, says “he would continue the Investment Partnerships Program (PPI) to help develop privatization projects. ‘The PPI fits into a vision for the state.’” Fernando Haddad, presidential candidate of Brazil's Workers' Party (PT), says that investors prefer his far right opponent because they see quick gains in the privatization of state companies that he would pursue.”

Local government authorities are moving away from public services outsourcing

A new report has revealed that local government authorities are moving away from public services outsourcing. “The survey of local government leaders, chief executives and mayors, published by the New Local Government Network (NLGN), found that 39% say they will outsource less over the next two years. It also showed that only 15% say they intend to outsource more over the next two years, while 46% indicate no change from current levels.” [Report: From Transactions to Changemaking: Rethinking Partnerships between the Public and Private Sectors]

Government seeks more PPP funds

Finance Minister Sri Mulyani Indrawati says the government is pursuing ‘public-private partnerships’ “The Finance Ministry has decided to enhance the role of public-private partnerships (PPP) to boost the construction of public facilities and export financing as it announced on Monday infrastructure projects set to be financed through the scheme. Sri Mulyani, a former WB managing director, assigned four of the Finance Ministry-backed financing firms to help mediate funds from the government and the private sector, and plan their utilization for eight infrastructure projects.”

Six PPP contracts came under heavy fire from the Minnis administration

The government has unveiled its framework for ‘public-private partnerships,’ which contains a number of safeguards for the public interest. “This came after six PPP contracts entered into by the former government came under heavy fire from the Minnis administration, which inherited them upon being elected to office on May 10.” Deputy Prime Minister K.P. Turnquest said “we have created a streamlined process that is fair and transparent with essentially only three stages: Project Identification and Screening; Business Case Analysis; PPP Procurement. The oversight and management structure has four reasonable tiers: Sector level/project specific management teams; overall PPP operational unit at the Ministry of Finance; oversight bodies responsible for all approvals in the PPP steering committee and Cabinet. This creates the needed checks and balances for responsibly managing public money, and protects the return on investment for the Bahamian people.” But these safeguards did not satisfy elements of the corporate community, who are complaining that it is “overly bureaucratic” and arguing that “opening up projects to bids from international companies and investors was ‘detrimental’ to the needs of small and medium-sized (SMEs) Bahamian enterprises.”

ECA's forthcoming “Healthcare and Economic Growth in Africa” report

On the sidelines of this year’s UN General Assembly meeting, a meeting took place to discuss the preliminary findings of the ECA's forthcoming “Healthcare and Economic Growth in Africa” report, which addresses ‘public-private partnerships’ and calls for more African private sector involvement in healthcare. The full report is due for release next year. The sideline discussion was organized by the Economic Commission for Africa’s executive secretary, Vera Songwe, the Aliko Dangote Foundation (the corporate social responsibility arm of the Dangote Group), and GBCHealth, whose board includes Coronation Capital Nigeria Limited, Becton, Dickinson & Co., Chevron, Johnson & Johnson, Merck, Deloitte Consulting, and MTV Networks International). ECA reports that “the preliminary report finds that neither government nor existing public-private partnerships are effective enough, and that existing PPPs disproportionately focus on a small number of countries. The preliminary report recommends a new model, one in which PPPs prioritize around the most significant disease burden and broaden their scope to benefit the health of the whole continent, which the ECA deems critical to driving long-term economic growth in Africa.”

Ministry offers Komodo Airport for private concession

The transportation ministry has offered Komodo airport for a private concession. “Wisnu Wijaya Soedibjo, acting deputy for investment at the Coordinating Investment Board (BKPM), said the government was offering a 25-year concession contract worth Rp 1.17 trillion (US$78.5 million) and an additional Rp 1.83 trillion for operational expenditure. ‘The PPP will not only help solve the government's budget limitations, but will also allow private firms with more experience and expertise to manage infrastructure projects more efficiently,’ he said during Komodo Airport's market sounding seminar in Jakarta.”

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