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Public-Private Partnership and Infrastructure Provision in Nigeria

1320 words (5 pages) Essay in Engineering

18/05/20 Engineering Reference this

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This paper presents a review of public-private partnership and infrastructure provision in Nigeria. It defines PPP,the prospect and Constraint of PPP, its application Types of PPP procurement system ,This paper will assess the  challenges of PPP in infrastructure provision principles involved, drawing on practical experience of evaluating such projects to present a framework for assessing the risks, and using Nigeria as a case study and also proffer suggestions for its usage.

Keywords: Infrastructure Development, Public Finance , Public-Private Partnership and Risk Management.

 

1.       Introduction

Overview of Public Private Partnership (PPP)

Public Private Partnership (PPP) is a government and private sector partnership in funding and developing government products and services (agriculture, communication, facilities, etc.).

The term infrastructure is described as “the facilities on which any procedure or system is based.”  Developing countries ‘ infrastructure refers to highways and transport infrastructure.

Government and private sector cooperation in the manufacturing of public goods and services is based on the concept that government has no company in manufacturing certain products and services to guarantee value for cash (vfm).

The experience of PPP in  Nigeria has not been a thing to write home about. Concessioning of Lagos-Ibadan Expressway, Kuto-Bagana Bridge, Lekki-Epe and Maervis management of Airports have been sour. This paper will look into the factors that make PPP unsuccessful in Nigeria and will suggest recommendations for adoption.

1.1      The nature of infrastructures in 3rd world [Nigeria]

Developing infrastructure is one of the criteria for evaluating democratic leaders ‘ accomplishments and is the framework for excellent democratic governance. In developing nations, agitation for infrastructural development is higher in democratic government than in or compared to developed countries in military dictatorship.  This is because infrastructure demand funds are always scarce. Ethnic agitation and lobbying in developing nations are prevalent things in democratic governance than in military dictatorship, compared  to developed countries .

2.       The Literature Review

The various issues were not addressed as they ought to.  It is already understood that Nigeria lacks fundamental infrastructure to promote sustainable development and trade–both regional and global –and to sustain competitiveness. In particular, farmers produce have no access to markets for the wide number of local governments, particularly rural ones, and are not stored, hampered by poor transportation and energy infrastructure. With PPP as an alternative method of infrastructure project financing, the public sector will concentrate on providing the most cost-effective infrastructure development, rather than directly owning and running infrastructure.  Many PPP models are feasible, including joint ventures, strategic alliances to make better use of public resources, lease and operate, design-build-operate, and design-build-finance-operate (Hood and McGarvey, 2002).

 Governments have created PPP to guarantee a lasting connection between the private and public sectors, to build trust between project managers and project executors and to decrease project delivery costs.

Green Techniques Prospects of PPP in Infrastructural Provision in Nigeria

3. Prospects of PPP in Infrastructural Provision in

PPP’s main objective is building infrastructure by  allocating economic, technical, and management hazards to the party best positioned to handle it at the lowest price, acceptable quality, and appropriate time. PPP has been effectively used in infrastructure provision in the United Kingdom, Ireland, the United States of America and India. The infrastructure gap in Nigeria is very broad due to the irresponsibility of past and current infrastructure supply leaders (Oyeweso, 2011, Oyedele 2012).

PPPs have helped governments carry out a lot of projects that would not otherwise have been carried out.  The Scottish Executive created a Private Finance Unit in Scotland that offers help on PFI in Scotland for both the government and personal industries (Hood and McGarvey, 2002).

4.       Private Public Partnership in public procurement

Concession its a cooperative agreement between a government and private developers to design and create equipment by combining respondents including financiers and contractors and/or consultants. The designers may not be the project’s financiers necessarily. 

Build, Own and Transfer (BOT) Under Build, Own and Transfer, contractors who may be a developer (financial) and not necessarily the builder, create and own the property that the customer will use with the contract that the customer will own the property in the future. This process is mostly used for specialized procurements like hospitals, schools, social housing and markets

Build, Own, Operate and Transfer (BOOT) The client has no agreement of using it in Build, Own, Operate and Transfer and allows the developer to own it for a period of time. Example is Bicourtney Aviation Management’s development of Murtala Muhammed Airport II.

Design, Build, Finance and Own (DBFO) This is a Public Finance Initiative (PFI) in which a private company designed, designed, built and perpetuated an concept of growth.  For instance, Salini Construction Company Limited intended and created the Millennium Park, Maitama.

4.1     Essential Features of PPP

  • The legal framework must be sound ,
  • There must be efficient/ effective costing.
  • The costing must take into consideration all the  risks  involved. 
  • The source of finance must be assured, accessible and sustainable.
  • Both parties must have technical knowledge of the infrastructure being developed though it may be at different levels.
  • It must be based on value for money (vfm), must be economical, efficient and effective.

5.       Cost effectiveness of PPP in Nigeria

The most criticized issue about constructing environmentally friendly buildings is the price. Photo-voltaic, new appliances and modern technologies tend to cost more money. Most green buildings cost a premium of 2%  yield 10 times as much over the entire life of the building. The stigma is between the knowledge of up-front cost vs. life-cycle cost. The savings in money come from more efficient use of utilities which result in decreased energy bills. Also, higher worker or student productivity can be factored into savings and cost deductions. Studies have shown over a 20 year life period, some green buildings have yielded considerable amount of money per square foot back on investment. It is projected that different sectors could save billions of rupees on energy bills.

6.       Conclusion

Partnership is a win – win agreement where communication is open and risk-takers are all parties. Representatives of the government see development partners as partners, not entrepreneurs. Their gains are agreed between 15-20% and guaranteed regardless of operating circumstances.  The jobs are performed under the close supervision of officials of the public sector. There is a budget for the public infrastructure to be procured that is estimated and not corrected. It may be smaller or greater, but all sides agree. In Nigeria Infrastructure Procurement Committee should be made up of people of integrity who have constructed names for themselves and who can live above board.

7.       References

Onibokun, A.G. and A .J. Kumuyi, 1996. An Evaluation of Informal Sector Activities and Urban

Landuse. Available at www.fig.net/pub/fig2006/papers/ts35/ts35_02_adeyinka_etal_0641.pdf.

Accessed on March 3, 2012.

Hagen, E.F. (1983). On the theory of Social change. Chicago: IIPA Journal.

HM Government (1999) Modernising Government. London: HMSO.

Hood, J. and McGarvey, N. (2002) Managing the Risks of Public-Private Partnerships in Scottish

Local Governments. Jounal of Policy Studies, Volume 32, Number 1.

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