Business News of 2014-06-16

PPP law expected by close of year

The Ministry of Finance and Economic Planning (MOFEP) says it is confident Parliament will by close of 2014 pass the Public-Private Partnership (PPP) law that will help government leverage private resources to bridge the country’s large infrastructure deficit.

The limited resources of the public sector have hobbled efforts to reduce Ghana’s infrastructure financing shortfall, estimated by the World Bank to be more than US$1billion annually.

The deficit covers all the main infrastructure areas: roads, energy, water, aviation, housing, and ICT. In housing, for instance, the government estimates that the country needs to build about a million more units to bridge the demand-supply gap.

Through PPPs, government expects to attract private funds for public infrastructure, and the state has been working to establish a proper legal and institutional framework to ensure sustainability of the concept when rolled-out. To this end, Cabinet in 2011 approved the first national policy on PPPs.

The World Bank has also supported the groundwork for launching PPPs through a US$30million loan to government for financing feasibility studies on potential PPP projects, as well as sharpening the skills of public sector managers to manage the PPP process.

According to Mrs. Magdalene Appenteng, Chief Economics Officer and Director of the Public Investment Division of the Ministry of Finance, government is ready to follow-up with the PPP law to ensure the projects’ success.

“Following the PPP policy, we have put together a bill that will soon be sent to Cabinet. Once Cabinet gives its approval, it will go to Parliament for the enactment of the law. We are confident this process will not take that long; possibly, by the end of the year we should have the law in place.”

Mrs. Appenteng, who was speaking at the announcement of an upcoming PPP conference in Accra, said the Ministry and its transaction advisors have identified about 15 infrastructure projects, some of which are likely to be implemented from next year.

The conference will be held from August 18-21 under a partnership between the Ministry of Finance and C-NERGY Ghana, the local subsidiary of C-NERGY Global, a South Africa-based investment advisory firm.

The conference will have the theme “Addressing Ghana’s Infrastructure Deficit: Moving from Policy to Implementation -- The Public-Private Partnership Alternative”, and seeks to position the country as an attractive destination for PPPs.

Director of C-NERGY Ghana Michael Cobblah told B&FT that the essence of the event is to create a platform for PPP practitioners to engage with investors and countries which have been successful in PPPs.

“If we say PPP is an alternative way of financing key public infrastructure projects, we want to create a platform where all the key stakeholders will engage and deliberate on the way forward.

“The World Bank and other bilateral partners have given so much money for capacity development, and we need to utilise those funds to ensure that we structure PPPs in a way that they become bankable and attract other investors to come and put their monies in the country.”

The conference will have two parts. The first will feature a keynote address from government articulating its vision for the development and transformation of the economy, and the opportunity presented by PPPs.

The second part will focus on discussions about the mechanics of developing, implementing and managing Public-Private Partnership opportunities.

Source: B&FT
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