Political will needed to pursue PPPs, says CDB official
Friday, June 19, 2015 | 12:36 PM, Source
ST JAMES, Jamaica (CMC) – Caribbean governments are being told they could learn from Jamaica’s example in pursuing partnerships with the private sector to undertake infrastructure development projects, but first they need to embrace the initiative.
Coordinator of Public Private Partnerships (PPP) at the Barbados-based Caribbean Development Bank (CDB), Brian Samuel, told the Caribbean Media Corporation (CMC) Jamaica is probably the most advanced country in terms of the PPP agenda.
“Jamaica has done quite a lot of PPPs in privatisation transactions which have been very beneficial to the country. Here in Montego Bay you’ve got Sangster International airport which is the poster child for PPPs in the airport sector in the Caribbean.
“So I think very soon other governments are going to look to the successful examples of what’s been done in airports, in renewable energy, in telecommunications and so on,” he said.
Samuel, who is among delegates attending the third annual Infrastructure Conference of CIBC First Caribbean International Bank here, also noted that governments would first need to embrace the idea of PPPs as a tool for infrastructure and economic development.
“A lot of Caribbean governments talk in theory but in practice they actually don’t embrace the public private partnerships,” he said.
“I think if you ask a lot of politicians would they rather do something on their own or would they rather do something with the private sector as a PPP, a lot of them would simply go like ‘I’d rather do it on my own. So in a sense PPPs have been given a boost in the Caribbean by the challenges faced by the governments.”
The CDB representative added that besides the lack of political will, governments also lack the capacity to understand the requirements for structuring and implementing the PPPs.
“It’s a very complicated process. It’s much more complicated than doing an ordinary government procurement so you have to make sure you structure it right, you have the incentive to the private sector right, you have the allocation of risks right between the private sector and the public sector. And I think a lot of the times governments simply do not have the capacity, they don’t have the technical knowledge to do this thing properly.”
The CDB is therefore working with regional governments, he said, in addressing those concerns, through training workshops for officials and public sector employees.
Samuel added there are other benefits to pursue PPPs, apart from a lack of government’s financial resources.
“The better reasons are that the private sector can do it better, cheaper, more efficiently, more effectively than the governments can. I’ve worked in governments and I’ve worked in the private sector and in the governments there just isn’t that discipline in getting thigs done on cost, on time and delivering efficiently,” he said.
Outgoing chief executive officer of CIBC Fir
st Caribbean, Rik Parkhill,old the conference now is an opportune time for countries to focus on public private partnerships, as most Caribbean economies are showing signs of growth in the post-recession period.
Parkhill, who is stepping down as at the end of the year and has hailed the institution’s ability to increase its profitability, said many regional governments, with their relatively fragile economies, cannot undertake major capital projects alone.
Parkhill will be succeeded by senior executive of the Canadian Imperial Bank of Commerce
(CIBC), Gary Brown, who will take up the post on January 1, 2016.