The Practical way PPP works | Infrastructure Development and Financing
Public Private Partnership process to financial close, especially with the Africa context, where little or no track record exists is cumbersome and takes a while. As earlier discussed, PPPs are contractual arrangements via which the public and private sectors collaborate together on a risk-sharing basis, to deliver infrastructure.
Recall: PPPs are contractual arrangements via which the public and private sectors collaborate together on a risk-sharing basis, to deliver infrastructure
The below is the typical process for procuring infrastructure financing in public assets. I will also write on the Nigeria Legal and Regulatory Framework as it applies to Public-Private Partnership for infrastructure development and financing soon.
The Public and Private sector each have responsibilities and change the risk under the PPP arrangement. I have schematically highlighted some below.
Recall, we had mentioned that there are different method of government procurement contracts and PPP (through Infrastructure concessions) is just one of it. There is also the traditional method of public financing. For ease of understanding, I have highlighted difference in both structures below.
The different parties involved in the PPP have continuing obligations for different aspects of the projects….
Typical State Government Responsibilities. The below were Lagos State Government responsibilities on Lekki Toll Road Project
Provides the land for the Right of Way (RoW)
Resettlement & compensation of affected persons
Remove obstructions from the RoW
Relocation of services (eg, PHCN pylons and other infrastructure) from RoW
Construction of Access Roads, and Alternative Routes to bypass Toll Plazas
Traffic management & security
Typical Project Company responsibilities. The below were Lekki Concession Company responsibilities in the Concession
Raise the financing for the project
Handle the construction, project management, and execution of the project
Operation and maintenance of the Toll Road infrastructure
Transfer assets to Lagos State at the end of the concession term