PUBLIC PRIVATE PARTNERSHIP (PPP): Context of Enterprise Dev

PUBLIC PRIVATE PARTNERSHIP (PPP): Context of Enterprise Development for Inclusive Growth

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 19th ANNUAL RESEARCH WORKSHOP

Ledger Plaza Bahari Beach Hotel

Dar es Salaam, Tanzania April 09-10, 2014

By 

Prof. Samuel Wangwe, Mr.

Godwil

Wanga

and

Mr. Johansein Rutaihwa

Introduction and ContextExplicit Recognition of PPP for SMEsPPP DialogueCapacity BuildingContractingPerformance MonitoringCommunication StrategyConclusion and Way Forward

Outline of the Presentation

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Recent Decade reforms: shift to the market economy and of private sector led economy.Public Private Partnerships (PPPs) are viable means to address constraints of financing, management, technology and maintenance of public goods and services.The implementation of PPP is guided by Vision 2025 and Five year Plan. the government will promote high and shared growth in society by harnessing the power of the market and promoting the dynamism of the private sector and communities as well as through wide participation of the citizens in the economy. The public-private-community partnerships should be harnessed creatively and innovatively as may be appropriate in specific circumstances.

Introduction and Context

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Big Results Now priority sectors: Energy, Transport Sector (roads, airports, ports and railway); Agriculture Education Sector; Water , and Resource Mobilization.PPP is expected to contribute to bridging the financial gap in BRN budget.Recent developments to make the PPP process more efficient:Restructuring PPP into one cohesive unitPutting in place policy and legal frameworkDecision to set up a PPP facilitation fund to facilitate undertaking of pre-investment processes (Feasibility studies, etc) and guarantee framework.Launching a National Transport Infrastructure Trust.

Introduction and Context-2

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Current situation and Challenge: the achievement of enterprise development for inclusive growth requires active participation of SMEs in the economy. PPP policy and Act put emphasis on large PPP projects and does not pay adequate space for SMEs directly of indirectly through encouragement of linkages with the large scale PPPs . Recommendations: The PPP legal and regulatory framework should give adequate space for SMEs. Recognizing the different requirements of Large PPPs and SMEs there should be two distinct windows: window 1 for large PPPs and window 2 for PPP with SMEs.

Explicit Recognition of PPPs with SMEs

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Current Situation and challenge: The private sector is not provided space in discussions between MDAs especially PMO-RALG and LGAs on the one hand and PPP Division .Recommendations:Harness existing avenues of public-private dialogue (e.g. TPSF, TNBC) by establishing problem solving mechanisms with respect to PPP covering all sizes of the private sector for realising inclusiveness.Institutionalize explicitly the participation of the private sector including SMEs at key stages of the PPP process:discussions between MDAs/LGAs and PPP Division Ministerial Steering Committee and Transformational Delivery Council.

PPP Dialogue

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Current situation and challenge:Low capacity LGAs where many small and medium size enterprises are operating to interpret government strategies for harnessing opportunities for PPP with SMEs. identify PPP projects, negotiate, supervise execution and undertake monitoring and implementation.Recommendation: Build and develop the capacities for identification of PPP opportunities for SME participation

Capacity Building

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Current situation and challenges: It has not been appreciated that the contracting public and private actors need to :operate in the spirit of cooperation and transparency.Be brought together at an early stage and with clear rules of engagementBe credible players.Operate according to agreed indicators of performance as a basis for monitoring and evaluation

Contracts

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Current situation and Challenges:The government has not put clearly the M&E procedures for PPPs with clarity on what it takes for the private sector players to act in line with public interest and to achieve all this at reasonable cost and government to honour its commitments and obligations.Recommendations: Monitoring and evaluation mechanisms should be instituted to ensure:Public interest and value for money that pricing is appropriate quality of service is competitive. that commitments and contractual obligations are honoured and sanctions are applied accordingly.Risk Management Plan is jointly developed progress towards lowering risk.

Performance Monitoring

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Current situation and challenges: The current situation depicts a very low level of awareness of PPP opportunities and effective communication. As a result many opportunities are not harnessed effectively.Recommendations: It is recommended that the government should have a programme of effectively communicating the PPP policy and encouraging every sector, region and district and even lower levels to identify and harness opportunities for PPP in the context of their specific circumstances.Government should develop a clear communication strategy.

Communication Strategy

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provide adequate space for SMEs and think of PPP in terms of two windows: window 1 for large PPP projects and window 2 for SME PPPs.Harness existing avenues of public-private dialogue to ensure continuous dialogue on PPPs and establish PPP problem solving mechanisms which will operate regularly between the public and private sector especially the SME window. Build and develop the capacities negotiating, managing and supervising PPPs

Conclusion and Way Forward

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contracting must be given high priority with obligations and commitments specified for all parties involved.PPP Projects should be subjected to comprehensive socioeconomic analysis (public interest, bankability and value for money investment criteria) and monitoring of their performance should be done on that basis and mechanisms for monitoring and evaluation should be put in place based on agreed indicators from the beginningdevelop a clear communication strategy. Institutionalise continuous learning from experience by developing research capacity in government complemented by capacities in existing research institutions.

Conclusion and Way Forward-2

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THANK YOU FOR YOUR KIND ATTENTION

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