Jun 11, 2018 News
By Kiana Wilburg
Government has expressed its commitment to “a fully transparent process” on all Public Private Partnerships (PPP) projects.
The APNU+AFC administration made this known in its policy framework which was recently released by the Ministry of Finance.
The document notes that the government intends to ensure that information about all of these projects and the performance of the programme, is publicly available. It said that this will enable independent auditing entities and the public to hold the Government accountable for its management of the programme.
To this end, the Government said that it will disclose project and programme information in several regards. It said that information on each potential project and invitation for Expressions of Interest will be published as part of the tender process.
The Government said that Public Private Partnership contracts will be published as soon as they become effective, along with a summary of the key project features and commercial terms. It said that certain contractual details may be excluded to protect commercially sensitive information—but, considering the output-based characteristics of such contracts, commercially sensitive information will not generally be included, creating an expectation of full contract disclosure.
The Government articulated that contract changes will also be published as soon as they become effective. With respect to performance data of each active Public Private Partnerships project, the Government said that it will be publicly available.
The APNU+AFC administration said that Public Private Partnerships projects and the Public Private Partnerships programme as a whole, may be periodically audited to assess whether the provisions of this policy have been followed, and whether the resultant projects are achieving the stated aims of the policy.
It said, too, that external advisors may be contracted to provide appropriate expertise in assessing project quality.
PUBLIC PRIVATE PARTNERSHIP POLICY
Finance Minister, Winston Jordan recently explained that the framework provides a structured platform for the local and external private sector to meaningfully engage the Government in achieving its national development agenda.
As Guyana rapidly approaches oil producer status, with the attendant massive inflow of new resources, Jordan said that the inclusiveness of all stakeholders in national development becomes a pressing imperative.
As such, Jordan noted that the document is a timely one.
According to the document, it is Government’s intention to encourage innovation in as many areas as possible. The Government noted that traditionally, Public Private Partnerships have been applied to the infrastructure sector in particular, in infrastructure, electricity, telecommunication, water, transport and solid waste sectors, and increasingly in the social (health and education) and Information sectors.
In the early stages of developing Public Private Partnerships, Government said it will focus on the following key areas of development: the Demerara Harbour Bridge, the Linden-Lethem road link, the Deep Water Harbour and Container Port, the Mini and Maxi Hydro Plants and Energy Farms, Plantation Agriculture, the Modernization and Dredging of Port Georgetown, the Milk Plant for Guyana, the Information Technology farm; and Agro-industrial and Small Manufacturing arks.
Further to this, the Government notes that the benefits and advantages of Public Private Partnerships can be significant when they are well designed and implemented in a balanced regulatory framework.
It noted however that those positive outcomes have to be earned through projects that can catalyze development, are financially viable, will minimize impact on the national debt and can favourably affect Gross Domestic Product (GDP) growth.
To achieve this, the Government said that creative, competitive and transparent procurement processes as well as clearly articulated policies and procedures followed by thorough due diligence, must be applied. It said that there are, therefore, certain key pre-conditions that need to be present in the policy framework for Public Private Partnerships, as they are critical to delivering successful outcomes.
It said that these preconditions have been identified as affordability, the legislative environment, institutional arrangements and capacity building.
On the issue of affordability, the Government pointed out that this is a key requirement of all Public Private Partnerships projects. It said that the options must be affordable both to Government, and the public, given competing priorities and commitments. The Government said that the rationale for Public Private Partnerships is improved management of scarce resources, better risk allocation and more efficient and cost-effective delivery of services.
The Government said however, it should be noted that while the private sector may be willing to finance and deliver infrastructure and services through Public Private Partnerships, only users or taxpayers can pay for these goods and services. It stressed that affordability, therefore, acts as a real constraint, and public bodies will need to give considerable thought to the selection of potential Public Private Partnership projects, ensuring always that their choices are in line with Government’s policy priorities and objectives.
With respect to the legislative environment, the Government said that Guyana already has many of the ingredients required for a successful Public Private Partnership programme: a stable administration; an independent judiciary; a robust Procurement Act and mechanism; and reasonably well-performing public institutions.
“However, political and regulatory risks can be potential barriers to effective Public Private Partnership implementation. A new regulatory framework will be approved to provide further and concrete evidence of Government’s commitment to a Public Private Partnership policy and to establish the principles and rules with which all public bodies will be required to comply.”
As for institutional arrangements, the Government contended in its policy that international experience suggests that identifying and establishing clear and unambiguous institutional functions at the onset of a county’s Public Private Partnerships programme, greatly assists in successful implementation.
It said that while institutional roles and responsibilities may change over time, as Government’s experience with Public Private Partnerships grow, the following public institutions will have integral roles in the programme: the Ministry of Finance, Ministry of Public Infrastructure, and the Ministry of Business.
The Government said that strategic direction of the Government’s Public Private Partnership programme will be the responsibility of a Steering Committee. A PPP Core Team, within the Ministry of Finance will act as the Secretariat to the Steering Committee and as a focal point for the day-to-day management of the programme.
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