The South African government considers public-private partnerships a fresh approach to funding and the delivery of transport services, but economic realities may make it difficult for other developing countries to follow suit.
The South African government considers public-private partnerships (PPPs) a fresh approach to funding and the delivery of transport services, but economic realities may make it difficult for other developing countries to follow suit.
During the Minister’s Session, held at the International Conference Centre in Durban on the second day of the World Road Congress, several African nations expressed reservations about the possible involvement of private enterprises in projects that could conceivably never become profitable.
According to a spokesman for the Ivory Coast government, former colonies struggle with problems of human capacity (lack of road development expertise), young democracies that are not yet transparent in its policy implementation and “budgets that are not sufficient to maintain roads, let alone build new ones.
“Governments find themselves at a stalemate with regards to infrastructure development. Roads cannot be constructed by PPPs, because there is not yet enough traffic capacity or economic activity to recover the costs of building them – a factor that was caused by the lack of infrastructure in the first place,” the spokesman said.
Spokesmen for Cameroon and Uganda said that although involvement of local authorities would play an important role in the maintenance of existing networks, the private sector would only be interested in profitable enterprises - thus making government subsidies the only viable alternative.
The Japanese government echoed the statement by the Ivory Coast delegate and said that in such cases, financial aid was crucial to renew infrastructure, assist in training and strategy implementation in developing countries.
”Ownership of road projects were the key to sustainability,” a spokesman for the government of Madagascar said. “Communities need to define their needs and wants in terms of sustainable development and forge partnerships with not only the private sector, if possible, but also public groups”.
In response to the previous statements, French delegate Patric Gandil said that the private sector could be involved in infrastructure construction to a lesser or greater extent, but never 100 per cent - and warned that profitability of a road project should not only be calculated by the amount of revenue it could generate, but also by the business that is generated as a result of the road being constructed.
British delegate David Jameson said that long-term stability, a long-term monitoring system and the opportunity to transfer economic risk to private companies would aid sustainable development. In his conclusion, Canadian spokesman Steve Mahoney reminded his fellow delegates that foreign funding, irrespective of its source, should be viewed as investment opportunities and not donations.