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How Namibia innovates in the field of PPPs

By Martin Inkumbi
The term 'Public Private Partnership' (PPP) has come into vogue again with references made to the form of enterprise as a tool for economic development at the UN Conference on Sustainable Development in Rio in 2012. The PPP is defined as a joint venture between the public and private sectors, in which the public sector achieves certain social goals and the company achieves a profit.

Examples of the fields of endeavour with which the PPP is associated include power generation and distribution, water and sanitation, refuse disposal, pipelines, hospitals, school buildings and teaching facilities, stadiums, airports and air traffic control, prisons, railways, roads, information technology and housing.

Unfortunately when the term PPP is mentioned images spring to mind of men and women signing important contracts for major capital projects, and the opportunities for these are few and far between. However, taking a different view, that of private projects which achieve social goals, and involve government participation, shows the field in a different light.

Perhaps the most obvious example of successful PPPs can be found in the field of mobile telecommunications and data. The government has the social goals of widespread communication and spread of internet access.

Mobile telecommunication companies in Namibia achieve these goals, while generating a return for shareholders and yielding the reserves with which to develop their operations.

NamDeb is another obvious example. Its sound business approach ensures that it is viable in the long term, and it has made a significant contribution to development and employment, and is a contributor to state revenues.

These are larger projects. There are a huge number of smaller projects that go unnoticed. A lodge built on conservancy land involves an agreement between the community and the lodge operator.

The agreement has to be ratified by the Ministry of Environment and Tourism, so this too is a form of PPP. TIPEEG involves multiple PPPs where companies tender to deliver infrastructure. Viewed in a different light, PPPs are evidently thriving in Namibia, however there is room to further develop the field of enterprise, particularly with regard to revenue streams for projects which entail more than the initial capital projects.

One of the core aspects that challenges the concept of PPPs is the idea that the state should be the sole provider of services that are traditionally considered to be public services. By accepting that certain capital projects and services can be developed and rendered by the private sector, public sector resources can be directed elsewhere. Examples of this at work can be found in private education, and private medical facilities.

As illustrated by the examples above, it is quite possible for the public and private sectors to coexist, provided that agreement can be reached on quality and pricing of services between the sectors. The areas where PPPs can operate is as diverse as developmental need.

One of the areas which immediately springs to mind is the need to develop serviced land for housing, with the participation of local authorities and town councils. Health services are a field that can also benefit from long-term partnerships between the public and private sectors. Education is another field which may be considered.

For capital projects, DBN has a very specific and tailored approach to PPPs and regards this option as an important developmental tool in the development of the country's infrastructure.

In its mandate, DBN undertakes to consider financing the development of infrastructure projects undertaken either by local authorities or state owned enterprises together with private sector operators within a Public-Private Partnership arrangement. Finance options by DBN include direct loans for PPP enterprises, subordinated debt, or participation in syndication facilities.

I strongly believe that public- private partnerships will progressively play a vital role in closing the development gaps.

When managed effectively, PPPs not only provide much needed new sources of capital, but also bring significant discipline to project selections, construction, and procedures.


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