Sustainable infrastructure is a moving target. For many developed economies, there is no end in sight for their infrastructural needs. In March 2020, the UK government announced that it will splurge £640bn on infrastructure over the next five years. Much of that money will be channelled into roads, railways, telecommunication infrastructure, schools and healthcare facilities.
With so much infrastructure on the ground already and a population of about 70 million people (less than 1% of the global population) one would expect that the UK should be the least worried about infrastructure deficit. But that is hardly the case. The dire for infrastructure is more pronounced in emerging economies — especially in Africa, where basic infrastructure such as energy, water, rail and road transportation is grossly inadequate for the exploding population. Potable water, for instance, is in such short supply that over 320 million Africans have no access to it. With little or no access to proper sanitation, that leaves the rivers and streams contaminated; thereby raising major health concerns.
Infrastructure is a primary driver of economic development as the quality of daily life and business growth depends on it. However, it does not come cheap. The African Development Bank (AfDB) revealed that Africa needs between $130 and $170 billion per year to meet its infrastructure needs. Between 2020 and 2025, the UK government will spend £640bn on infrastructure. More than ever, governments are devising mechanisms to deliver better results than is obtainable from the good old’ loans. Today, governments continue to explore arrangements that allow private entities to design, fund, build and operate public infrastructure for a defined period. Public-Private Partnerships (PPPs), we call them. In most quarters these arrangements have proven successful.
When done well, PPPs provide a win-win opportunity for both private entities and governments. These private entities then assume management responsibility and shoulder much of the risk in exchange for performance-based profits. From the upgrade of Sacramento’s airport—in partnership with Verizon—to the modernisation of India’s airports, there are many success stories. On the flip side, there are sad tales too. The failed London Underground upgrade project in the late 1990’s is a case in point.
When they work, PPPs are a huge win. When they fail, however, PPPs can be a pain to the parties involved. The good news is, there are ways to make them work. Over the years I have spent working as a development specialist, I have seen 3 patterns in many successful PPPs. This list is not exhaustive, it only provides a peek into the dynamics of successful PPP arrangements.
- Know your partner
This seems obvious, however, many failed PPPs involve partners who barely understood each other’s priorities, decision-making processes or capabilities. Partners of successful PPPs on the other hand have a deep working knowledge of each other.
As a PPP player, you must do your due diligence to know enough about your partner’s overall strengths, this will prevent unnecessary strife in the future. Private partners must realise that government is not driven by bottom lines, they tend not to be swift in decision making and are accountable to a citizenry. Likewise the public sector must also realise that private partners are out for profits.
- Cast a shared vision
Unlike traditional arrangements where project developers are at liberty to define the project’s vision, PPPs are different. Both public and private parties must find middle grounds for their individual agendas, this takes consensus.
Although reaching a shared objective is not so easy, it is the backbone for any successful PPP. Instances where this works tend to uphold active engagement among stakeholders. More so, the host community must buy into the vision if at all the project will enjoy long-term success.
- While Building Your Team, Go for the Best
Most private sector players who are new to the PPP system often overlook expertise when building their development team. While some do so unconsciously, others simply want to hire cheap. This route often results in a deadlock. It is best to hire specialised expertise and if you’re not familiar with the terrain, hire local expertise too.
Depending on the geopolitical, legal and socio-economic context, PPP arrangements can be both simple and complex. Therefore, there is no single model that works for every clime. Nevertheless, these 3 points I have discussed can serve as a solid foundation for a successful public-partnership that yields more favourable outcomes than either party could have achieved alone.
