The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government yesterday moved to seek ‘Expressions of Interest’ from private sector bidders on $175 million worth of public infrastructure contracts, signalling its interest in expanding public-private partnerships (PPPs).

Among the potential projects being put out to tender are $40 million worth of work on North Andros’s roads; $25 million worth of Acklins’ roads; $40 million to refurbish some New Providence schools; $40 million to upgrade the main Post Office building; $15 million to enhance the Government’s East Hill building; and $15 million in upgrades to different Family Island airports.

The Expression of Interest (EOI) document issued by the Ministry of Finance did not detail the PPP terms and conditions, or the business models to be used, presumably leaving this open to negotiation with the preferred bidder.

The EOI, though, said: “A partnership (PPP) is a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies.

“PPP involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project.

“An example can involve the private sector building offices and leasing them back to government with an option to buy at the end of the lease.

It appears that the Government’s fiscal woes, and financial constraints, have finally forced it to embrace the PPP concept, which is widely used elsewhere in the world.

With capital scarce, and the Government weighed down by an existing $5.5 billion national debt, it has almost been forced to turn to the private sector to finance and build infrastructure projects.

The KPMG accounting firm has previously pegged this nation’s infrastructure needs at between $2-$2.2 billion, a sum that dwarfs the Government’s roughly $350 million annual capital expenditure budget - which is also being pegged back.

However, K P Turnquest, the Opposition’s finance spokesman, told Tribune Business that the EOI sent “mixed signals” to potential PPP partners and investors.

He questioned whether the Government was looking to the PPP model to generate efficiencies and savings in public procurement and infrastructure projects, or if it had been forced down this route by an inability to access debt financing.

“I have no doubt that it’s vital and necessary spending, but is it vital at this time. Is it in the Budget,” Mr Turnquest said of the proposed contracts in the PPP tender.

Informed that the Government was seeking private sector involvement in the PPP model, he added: “It will be interesting to see what terms are offered. You are at least talking about contingent liabilities.

“Are they having difficulty borrowing in the open market, or are there significant savings by doing it through a PPP? At the end of the day, it’s a mixed signal.”