Zambia Development Agency - Public Private Partnerships

INTRODUCTION
The Government of the Republic of Zambia has recognised that the national treasury has limited resources for economic programmes which include infrastructure development and delivery of social services. Infrastructure development is a key factor in linking business activities that contribute to the growth of an economy and there is need, therefore, to urgently facilitate the provision of infrastructure development through Public-Private/Partnerships (PPPs). In an effort to make Zambia a hub of economic development in the region, Government has taken steps to improve infrastructure and services. The intention of Government is to engage the private sector in the development of infrastructure and services through Public-Private-Partnerships. Government will continue with its facilitative role of encouraging and enhancing private investment in the sector. Most construction, rehabilitation and maintenance of infrastructure is being contracted out in order to further increase private sector involvement. The development of socioeconomic infrastructure through PPP’s will be tailored to enhance Zambia’s strategic and geographic position in the sub-region as a hub of socio-economic activity. This policy outlines the framework for the implementation of public-private partnerships in Zambia

PPPs have been identified as a viable means of infrastructure development that can effectively address the constraints of finance and management faced by the public sector. Further, PPPs enable the streamlining of Government’s functions to that of facilitation, monitoring and evaluation; ensuring efficiency and accountability. Reliance upon a delegated management framework by whatever form of PPPs as a means of improving the quality of public services has come to the fore as one of the basic tools of economic modernisation.

A PPP is an arrangement between the public and private sectors (consistent with broad range of possible partnership structures) with clear agreement on shared objectives for the delivery of public infrastructure and/or public services by the private sector that would otherwise have been provided through traditional public sector procurement. PPPs are therefore a contractual arrangement between a public entity and a private party for the provision of assets or services. In return, the private entity receives a benefit/financial remuneration according to predefined performance criteria, which may be derived entirely from service tariffs or user charges, entirely from Government budgets, or a combination of both.

Government retains a significant role in the partnership as main purchaser of services or main enabler of the project. The PPP concept allows the public sector to source private sector providers for the delivery of public infrastructure and related services which the private sector can provide more effectively and efficiently. It is also worth noting that PPPs do not only signify reliance upon the private sector for financing capital investment projects on the basis of revenue streams to be generated by the future facility, but also incorporates the use of private skills and managerial expertise in building and operating public service projects more efficiently throughout the project life-cycle. In this respect, the core of PPPs encompasses more the notion of service provision than simply infrastructure financing and construction.

PPP’s also offer opportunities for local authorities to adequately address their infrastructure and service delivery requirements. PPPs are therefore, a viable tool for development in a decentralized system. To this end Local Authorities will be able to engage the private sector to undertake PPP type projects for local infrastructure. PPPs would thus be one of the most effective means of achieving this..