If a given nation requires increased project quality, sustainability, innovation and myriads of ways to quench public thirst, it is better for them to entertain a popular approach to run large scale government projects and immense undertakings as well as development strides like management of transport infrastructure, such as highways, railways, and waterways, bridges, hospitals, among others.
This approach is termed as a public-private partnership, also called a PPP (3P). It is indeeda long-term cooperative agreement between a private company and the national or regional governments. Being eager to know the whereabouts of this approach in Ethiopia, The Ethiopian Herald talked to Ascahlew Gaudie, graduated from Addis Ababa University in Marketing Management.
He said, “Public-private partnership (PPP) is collaboration between the government and private enterprises, most of the time on large infrastructure projects that the private partner may finance, plan or execute. It allows large-scale government projects, such as roads, bridges, or hospitals, to be completed with private funding, and this association works well when private sector technology and innovation combine with public sector incentives to complete work on time using the fixed budget.”
It is also a funding model for public infrastructure projects and initiatives such as a new telecommunication system, public transportation system, airport or power plant, he said. “Though government agencies represent the public partner at a regional, state and/or national level and private partners can be a privately-owned business, public corporation or consortium of companies with a specific area of expertise, PPP is a broad term that can be applied to anything from a simple, short-term management contract to complicated mega projects,” he said.
PPP projects are helpful for large ventures that require the procurement of highly skilled workers and a significant cash outlay to get started. While they can cover a range of projects across various sectors in the country, there are several sectors most associated with them. To mention but a few, transportation (roads, bridges, tunnels, airports, seaports, railway systems and public transit), power and energy ( electricity generation plants such as nuclear, electrical transmission lines and natural gas pipelines, Water and waste water to construct and operate water treatment plants, desalination plants and sewer systems, telecommunications, healthcare, education and other related social infrastructure.
The government of Ethiopia has recently started to adopt major infrastructure development through public-private partnership (PPP) initiative. It has adopted this model to provide insights to the sector players. As to Aschalew, Ethiopia has enacted a new Proclamation No. 1076/2018 facilitating Public-Private Partnership (PPP), recognizing that the private sector is essential to support the country’s economic growth and improve the quality of public services, particularly in infrastructure.
He said, “The Public- private- partnership has been introduced as an alternative strategy to resource mobilization and as a way of embedding efficiency gains in building the infrastructure and delivering public services. Ethiopia is pursuing an ambitious transformational change involving huge public investment to address infrastructural deficit and public services delivery gaps.”
As to him, the private sector in Ethiopia is ready to get involved in PPP arrangements provided that the government puts in place the necessary policies and regulations. Hence, the government should consider putting in place a legal and institutional framework to foster the establishment of PPPs. It is also important that the development of appropriate legislation and regulatory frameworks factor in the public interest to ensure win-win arrangements.
The Ethiopian government should therefore be encouraged to mainstream PPP arrangements in the future. The extensive public financing for infrastructure guided by the state-led development policy has crowded out private sector participation for infrastructure development in Ethiopia. Although public-private partnership (PPP) has been used by many countries, the Ethiopian government has started to adopt it for major infrastructure development recently.
As this paradigmatic shift has made an imprint on official development policy universally, continentally or regionally, the government of Ethiopia has tapped into this discourse to stimulate the business sector and create job opportunities to a number of fellow citizens. In the nation, the shift is reflected in the government’s commitment and firm determination for development policy and operationalized strategic association trends, which aim at fostering greater public–private development attainments.
The inclusion of private actor has changed the meanings, processes and mechanisms of national growth and development when the shift towards increased public–private partnerships is given due emphasis. Hence, the changes, challenges and opportunities the initiative offers has to be well emphasized as entertaining development cooperation and practice is of paramount importance in bringing about real change following the amalgamated finance, resource and labor coupled with workable policies and viable strategies.
It is also equally important to note that different forms and renderings of public–private partnerships and how the involved actors perceive navigate and implement the already set up conglomerations. Taking the insights of post-development yields and actor-oriented moves to come up with change, the Ethiopian government has been exploring public–private partnerships practical outcomes. To this end, the government, development partners and the private sectors have to capitalize on the successful joint partnership formation and policymaking processes with a view to grasping how the framed policies shape development practice and paved the way forward.
True, he underscored that it is an incomparable fashion to focus on the practical encounter of different actors allow the government to study the intersection of different actors’ interests, mandates, practical engagements and how this shape the formation of joint partnerships and the completion of efficacious projects. Such a remarkable step also helps both parties explore the complex relationship between development policy and practice, including how actors employ strategies of brokerage and translation to manage and maneuver policy–practice and public–private interfaces.
According to Aschalew, the close tie and financially amalgamated pattern the government and private sector have been doing since recent past coupled with the new aid regime and public–private partnerships is important to understand and improve how bold Sustainable Development Goals strategies and objectives are converted into practice; the government also posits that doing so will reveal larger processes of governance, power and social change that are shaping the nation in a meaningful way.
Abraham Totoba is a company owner, a private company dealing with consultancy services of course, who has a recurrent connection with government bodies due to the very nature of his work. He said, “A public-private partnership, also called a PPP, P3 or 3P, is a long-term cooperative agreement between a private company and the national or local government. A public-private partnership is a long-term cooperative agreement between a private company and the national or regional governments.”
As to him, PPP is a form of alternative service delivery that involves a formal collaborative arrangement between the public and private sector in several initiatives, typically of a long-term nature. It has been widely used for the development and management of transport infrastructure, such as highways, railways, among others. It is also popular, particularly for the development and management of transport infrastructure. Core motivations to opt for PPPs have been off-balance sheet financing of infrastructure projects, the transfer of risks to the private sector, and increasing the efficiency and effectiveness of infrastructure development and management.
In general, one successful model for improving and maintaining infrastructure cost-effectively relies on public-private partnership, which gives private enterprise a greater role in financing and building roads and other large public projects. The Ethiopian government needs to use PPP agreements in its revitalization efforts to build roads, university buildings, new hi-tech infrastructure and other immensely-financed ventures. It has also helped the country build largely financed schemes like better roads, improve airports and enhance mass transit systems without always sticking taxpayers with the bill. PPP projects can be made more cost-effective as they have all the time relied heavily on local union contracts and collective bargaining agreements.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD FRIDAY 30 JUNE 2023
