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Lovemore Chikova-Development Dialogue

When President Mnangagwa commissioned the modernised Beitbridge Border Post two weeks ago, we all marvelled in excitement at the new infrastructure and facilities that have been installed there.

The other importance of this project is that it is not only concentrating on the actual border entry and exit points, it is revamping the whole of Beitbridge town, modernising its outlook.

The completion of the modernisation of the Beitbridge Border Post brought with it a fresh perspective on public private partnerships (PPPs) in Zimbabwe.

This is because the work done and still being done in Beitbridge is a result of a PPP between the Government of Zimbabwe and Zimborders Consortium. The project gives Zimbabweans a glimpse into what PPPs can achieve when done expertly.

It is a good example of how PPPs, when given priority, can have a huge impact in enhancing economic development through improvement in infrastructure. With the modernised border post now fully functional, Beitbridge has become an exhibition on what a well structured PPP can achieve within a short time. The US$300 million PPP has already changed the border post, upgrading it to international standards so that locals and visitors can now enjoy the services.

The project is being implemented in three phases, with the freight, roads and information communication technology being in phase one, the bus terminal in phase 2 and the light vehicles and out-of-port works in Phase 3.

PPPs are realised when the public sector enters into a contract with a another party on the provision of services or on a project. One of the reasons why it has become much easier to achieve projects such as the Beitbridge Border Post modernisation under PPPs is that this involves legally-binding contracts that give confidence to both the Government and the contracted entity.

The contract is clear on the responsibilities of each side and the risks that each of them have to carry.

This often results in clear-cut operation procedures which then ensure everyone gets value for money and the project cycle is mostly faster.  

It is a well-known fact that sometimes governments lack enough funds to carry out projects beneficial to the people at particular moments, and this is where private partners can come in with their financial capabilities to carry out the projects.

The success of the PPP for the Beitbridge Border Post modernisation project should open doors for projects in other sectors to be undertaken under the PPPs model.

The transport sector, for example, can benefit immensely in the development of roads, railway lines and airports through PPPs. These are intense projects that the Government may find itself with limited resources to implement at a fast pace because of the load of work that obtains.

With the economy stabilising, it is expected that there will soon be an increased demand in the movement of goods and services and an upgraded transport sector is necessary to facilitate a smooth flow. An example of where the PPPs worked in the transport sector is the Plumtree-Mutare Road that was constructed by Group Five, a South African company.

It is also possible that the revamping of the railway infrastructure can be done through PPPs, boosting the transportation of bulk goods that is at the moment mostly done through roads. 

Another sector with the potential for PPPs to be effected successfully is power provision, where demand for electricity is increasing as farming and industrial activities increase on the back of an improved economy. The struggle which the Zimbabwe Electricity Supply Authority is facing in supplying adequate power is also a result of ageing equipment which needs to be revamped.

Contracting private partners through PPPs can help solve this problem as these partners can bring in new equipment and new technologies in the generation of electricity. New power stations can be constructed through PPPs, with the eventual beneficiaries being the people.

The other idea is to engage in PPPs for the establishment of solar energy farms where private operators can build, operate and eventually transfer the projects to the Government.

PPPs in the power sector can include generating electricity by independent power producers, hydro power generation, thermal power and using coal bed methane gas.

It is most welcome that the Government has embarked on the construction of dams throughout the country as it strives to ensure improved livelihoods through the establishment of irrigation projects. More dams could be constructed through the implementation of PPPs in various parts of the country to compliment what the Government is already doing in this sector.

Related to water, PPPs can also be fashioned in water and sewer treatment plants, irrigation and the creation of economic hubs around water sources.

The health sector can also result in the establishment of new health facilities and the rehabilitation and expansion of the existing ones through PPPs.

Learning facilities and the construction of student accommodation can be done through PPPs, as well as the establishment of bulk infrastructure in housing.

Models of PPPs

There are a number of types of PPPs that Government can consider, depending on their suitability on particular projects. The Build-and-Transfer (BT) entails the private sector sourcing the funds and doing the work, before handing over the completed infrastructure to Government.

In this arrangement, the partner would be paid its dues, while a Government agency takes over operations of the completed project.

For the Build-Operate-and-Transfer Scheme (BOT), the private sector gets a certain period of operating the infrastructure project after using its resources to construct it.

The operation of the project includes collection of fees or rates, but the partner eventually hands over the management to the responsible Government agency after an agreed period. 

Under the Build-Own-Operate-and-Transfer (BOOT), the private player actually owns the infrastructure project for some time, while recovering its investment through charging and collecting the fares. 

The infrastructure is eventually handed over to Government or its agency after expiry of the agreed period. 

With Build-Lease-and-Transfer (BLT), after constructing the project, the private player leases it to Government, and the project would be wholly-owned by Government after an agreed period. 

Effectiveness of PPPs

PPPs have been proven to be effective in the development of infrastructure, and are like a joint venture between the Government or its agencies and the private sector. 

It is a business venture between the private sector and the public sector, with the aim of ultimately benefiting the public when the project is completed. 

The aim of PPPs is to unlock financial resources and new technologies that the private sector can bring on the table as part of the joint venture deals.

The Beitbridge Border Post modernisation project has successfully demonstrated that PPPs are a noble developmental tool which can assist in the setting up of infrastructure.

It is imperative that Government opens up more areas to PPPs, especially where it feels it needs more financial resources. Already, PPPs are on the government’s developmental agenda as confirmed by the Zimbabwe Infrastructure Investment Programme that was launched recently by the Ministry of Finance and Economic Development, which recognises them in the development of infrastructure.