David Ofosu-Dorte, Senior Partner, AB & David: Viewpoint

Viewpoint: David Ofosu-Dorte

The provision of public infrastructure and services has typically been viewed as the responsibility of the government. This is premised on the fact that being the repository of taxes and other revenue, the state has a primary obligation to provide public services and infrastructure that are non-profit oriented, while the private sector concentrates on profit-making enterprises. Ghana’s interest in public-private partnerships (PPPs) has developed in response to the country’s infrastructure gap and the realisation that the government cannot assume the total cost for the provision of public infrastructure. The state has developed two policy guidelines for the implementation of PPPs in Ghana. However, it is recognised that a PPP law will engender predictability and institute the safeguards that the private sector requires to partner with the government on PPP projects.

The PPP Bill 2016 is likely to be passed in 2017. It will provide the legal framework for the development, implementation and regulation of PPPs and related matters. The primary objects of the bill are to promote private sector participation in the development of the country through PPP arrangements and foster the use of private sector resources for the provision of infrastructure and services through PPPs.

Under the proposed bill, PPP initiatives will apply to priority projects in every sector at all levels of government. These priority areas include transport, IT infrastructure, hospitals, office buildings, social infrastructure for the education sector, public housing and commercial facility. The considerations underpinning the bill include the need to ensure value for money, proper risk allocation, end-user affordability, accountability, transparency and competitiveness in the procurement process, promotion of local content and technology transfer, and compliance with environmental, climate and social safeguards.

The bill proposes the establishment of a Ghana Partnership Agency and a PPP fund. The agency will be vested with the mandate to promote and regulate the development and implementation of partnership arrangements for the provision of infrastructure and services, while the fund will provide financing to support partnerships including project preparation, capacity building, market research, education and training, and government support for partnership projects as determined by the minister of finance.

The bill sets out rules applicable to unsolicited bids. It outlines the criteria for which a PPP project will be considered as an unsolicited bid. The bill states that a PPP project will be procured as an unsolicited proposal if the proposed project is not listed in the National Development Plan, National Infrastructure Plan, Public Investment Plan or the District Development Plan or other approved sector plans.

A partnership agreement may consist of one or more agreements or a principal agreement with subsidiary agreements. The bill provides specific contractual obligations that the private sector is expected to assume. The bill requires that the assumption of functions of public authorities by private sector parties in a PPP arrangement should not divest them of the responsibility to protect the public interest, ensure that the relevant functions are effectively and efficiently performed and that public property is appropriately safeguarded. The bill seeks to provide a margin of preference in the evaluation of proposals submitted by private sector parties with majority Ghanaian ownership incorporated locally.

In Ghana, significant projects undertaken through PPPs include the development of the foreign identification system, production of potable water and delivery of health services. In addition, several projects in the transport sector, and health and commercial complexes are also at various stages of development and procurement. It is hoped that the passage of the PPP bill into law will garner immense potential for the country’s infrastructure development agenda.