1st Edition
Public-Private Partnerships in Emerging Economies
Over the years, a shortage of funds has resulted in a huge deficit in government budgets for infrastructure, especially in developing economies. It is no longer feasible for governments to bear the entire burden of funding public infrastructure. Given that an inadequate supply of public infrastructure poses a challenge for the economic development of any country, partnerships with the private sector to fund public infrastructure procurement has started to be relied on as an alternative to traditional public procurement. Public-Private Partnerships are an arrangement that allow private entities to fund, design, manage and operate public infrastructure for a term in exchange for the payment of tolls by users or the government may well be the solution to the infrastructure crisis in many developing economies.
This book examines the role of law in the adoption, implementation and regulation of Public-Private Partnership in selected developing economies including Brazil, India, Nigeria and South Africa to address how to deal with overlapping laws and how the law can protect assets invested in PPP in order to attract private sector interests in infrastructure financing in developing market, showing how law can be used to create, sustain and promote PPP frameworks that take into account local circumstances in developing economies.
LIST OF ABBREVIATIONS
LIST OF STATUTES
LIST OF CASES
PREFACE
ACKNOWLEDGEMENT
CHAPTER ONE
INTRODUCTION TO PUBLIC-PRIVATE PARTNERSHIP
1.1 Background
1.2 What is a PPP?
1.3 Definition of other Terms
1.3.1 Infrastructure
1.3.2 Public Sector
1.3.3 Private Sector
1.3.4 Greenfield and Brownfield PPPs
1.3.5 Terms used in place of PPP in Some Jurisdictions
1.4 Rationale for Adopting PPPs
1.5 Types of PPPs
1.5.1 Concession
1.5.2 The Private Finance Initiative (PFI)
1.6 PPP Distinguished from other Similar Types of Procurement
1.6.1 PPPs vs Public-Sector Procurement
1.6.2 PPPs vs Privatisation
1.6.3 Outsourcing vs PPP
1.7. Advantages and Disadvantages of PPPs
1.8. The Critical Success Factors for PPPs
1.8.1 A Favourable Framework for Public-Private Partnership
1.8.2 Transparency and Anticorruption
1.8.3 Ensuring a Healthy Investment Environment for PPPs
1.9 The PPP Project Cycle
1.10 Selecting the Right Projects for PPPs
1.10.1 The scope of the Project and Requirements
1.10.2 Is the Project PPP Viable?
1.11 Affordability, Risk Allocation, Bankability and Value-for-Money
1.12 Conclusion
CHAPTER TWO
THE FRAMEWORK FOR PUBLIC PRIVATE PARTNERSHIPS
2.1 Introduction
2.2 The Need for a Framework
2.3 Policy and PPP
2.3.1 Policymaking in Brazil, India, Nigeria and South Africa
2.4 Legal Framework for PPP
2.4.1 Key Issues for a PPP Legal Framework
2.5 The Institutional Framework
2.5.1 A Role for State Institutions
2.5.2 How the Institutional Framework Can Be Designed to Support PPPs
2.6 Creation of a PPP Law
2.7 Setting Up the PPP Unit
2.8 Regulation of PPP Contracts
2.9 Resolution of PPP Disputes
2.9.1 The Challenge with PPP Disputes
2.9.2 The Choice of Law
2.10 Protection for PPP Assets
2.11 Conclusion
CHAPTER THREE
THE PPP CONTRACT
3.1 Introduction
3.2 The PPP Procurement Process
3.2.1 The Stages in a PPP Project
3.3. The Elements of a PPP Contract
3.3.1 The Concession Agreement
3.3.2 Sub-Contracts
3.4 Designing the Main Concession or PFI Contract
3.5 PPP Arrangements and Sanctity of Contract
3.5.1 Classical Approach to Sanctity of Contract
3.5.2 A Modern Approach to Sanctity of Contract
3.6 Conclusion
CHAPTER FOUR
BRAZIL
4.1 Introduction
4.2 Introducing Brazil
4.3 PPP in Brazil
4.4 The Framework for PPP in Brazil
4.5 Stable Political and Social Environment
4.5.1 The Socio-Political Environment and Public-Private Partnership in Brazil
4.5.2 Public Agencies Administering PPP in Brazil
4.6 Sponsored and Common Concessions
4.7 The Parties to a Brazilian PPP Contract
4.7.1 The Public Authority
4.7.2 The Project Company
4.7.3 The Guarantor
4.7.4 The Investor *
4.8 Well Organised and Committed Public Agency (ies)
4.9 Scorecard for PPP Projects in Brazil
4.10 Brief Case Studies of PPP Projects in Brazil
4.10.1 PCH Figueirópolis and PCH Ludesa
4.10.2 Hospital do Subúrbio
4.10.3 Belo Horizonte Schools
4.11 Good Governance and PPP In Brazil
4.12 Conclusion
CHAPTER FIVE
INDIA
5.1 Introduction
5.2 Introducing India
5.3 Legal Framework for Public Private Partnership in India
5.4 Land Acquisition for PPP Purposes
5.5 Stable Political and Social Environment
5.6 Well Organised and Committed Public Agency (cies)
5.7 Scorecard for PPP in India
5.8 Brief Case Studies of Flagship PPP Projects in India
5.8.1 Bhubaneswar Street Lighting
5.8.2 Berhampur Solid Waste Management
5.8.3 The Tuni Anakapalli Annuity Road Project
5.9 Good Governance and Public-Private Partnerships
5.9.1 Strong Public-Sector Capacity
5.9.2 Community Involvement
5.9.3 Adequate Funding
5.9.4 Efficient Risk Sharing
5.9.5 Sustainability
5.10 Conclusion
CHAPTER SIX
NIGERIA
6.1 Introduction
6.2 Introducing Nigeria
6.3 Nigeria’s Federal System and PPP
6.3.1 The Exclusive Legislative List versus Necessity
6.3.2 Items in the Exclusive Legislative List
6.3.3 Items in the Concurrent Legislative List
6.4 The Essence of a Framework
6.5 How PPP is Administered in Nigeria *
6.5.1 Regulations under the ICRCA 2005
6.5.2 Conventional Public Procurement versus PPP
6.6 Other Laws to be Considered
6.6.1 The Public Enterprises and Commercialisation Act 1999 (PECA)
6.6.2 The Utilities Charges Commission Act 1992 (UCCA)
6.6.3 The Environmental Impact Assessment Act 1992 (EIAA)
6.6.4 The Debt Management Office Establishment (Etc.) Act 2003 (DMOA) *
6.6.5 The National Inland Waterways Act 1997 (NIWA)
6.6.6 The Highways Act (Laws of the Federal Republic of Nigeria No.35) 1971
6.6.7 The Fiscal Responsibility Act No 31 2007 (FRA)
6.7 Regulations at the Sub-National level
6.7.1 Lagos State
6.7.2 Rivers State
6.7.3 Ekiti State
6.7.4 Cross Rivers State
6.8 Laws Regulating Foreign Direct Investments (FDI) for Infrastructure
6.8.1 The Nigerian Investment Promotion Commission Act (NIPCA) 1998
6.8.2 Provisions Relating to Investments
6.8.3 Protection for FDI Under the Foreign Exchange (Monitoring and Miscellaneous) Provisions Act (FEMMA) 1995
6.9 Case Studies of PPP Projects in Nigeria
6.9.1 The Lagos Ibadan Expressway Project
6.9.2 Lekki-Epe Concession Toll Road Project
6.9.3 Murtala Mohammed Airport
6.9.4 Cross River State Hospital
6.9.5 Tinapa Project
6.10 Conclusion
CHAPTER SEVEN
SOUTH AFRICA
7.1 Introduction
7.2 Legislative Framework for PPP in South Africa
7.2.1 The Constitution of the Republic of South Africa
7.2.2 The Public Finance Management Act 1999
7.2.3 Treasury Regulation 16 (2004) to the Public Finance Management Act (Act 1 of 1999) *
7.2.4 The Municipal Finance Management Act (Act No. 56 of 2003)
7.3 South Africa’s PPP Policy
7.4 Institutional Framework for PPP in South Africa
7.4.1 The National Treasury’s PPP Unit (PPP Unit)
7.4.2 Institutions of Government
7.5 PPP Practice in South Africa
7.5.1 Inception Phase
7.5.2 Feasibility Studies *
7.5.3 The Procurement Phase
7.5.4 Implementation Phase
7.5.5 Dispute Resolution
7.5.6 Funding of PPPs in South Africa
5.5.7 Protecting Funds Invested in PPP Projects
7.5.8 The Protection of Investment Act No. 22 of 2015
7.6 Case Studies of PPP Projects in South Africa
7.6.1 The N4 from South Africa to Mozambique
7.6.2 The Pelonomi and Universitas Hospital Co-Location, Bloemfontein
7.6.3 The Prison Contracts
7.6.4 South Africa’s Gautrain
6.7 Challenges to the implementation of PPP In South Africa
7.8 Conclusion
CHAPTER EIGHT
A COMPARATIVE EXAMINATION OF THE REGULATORY ENVIRONMENT FOR PUBLIC-PRIVATE PARTNERSHIP FOR BRAZIL, INDIA, NIGERIA AND SOUTH AFRICA
8.1 Introduction
8.2 The Establishment of an Adequate Legal Framework
8.2.1 Brazil’s PPP Framework *
8.2.2 India’s PPP Framework
8.2.3 Nigeria’s PPP Framework
8.2.4 South Africa’s PPP Framework
8.2.4 Similarities in the Framework of the Selected Countries
8.2.5 Dissimilarities in the Framework of the Selected Countries
8.3 Innovations and Good Practice
8.3.1 Brazil
8.3.2 India
8.3.3 Nigeria *
8.3.4 South Africa
8.4 Weaknesses of the Framework in the Selected Jurisdictions
8.4.1 Brazil
8.4.2 India
8.4.3 Nigeria
8.4.4 South Africa
8.5 Conclusion
CHAPTER NINE
CONCLUSION: THE FUTURE OF PUBLIC-PRIVATE PARTNERSHIP IN EMERGING ECONOMIES
9.1 Introduction
9.2 A Clear Understanding of What PPP is and How it Works
9.3 The Challenge Facing Emerging Economies
9.4.1 Regulating PPP
9.4.2 Unlocking the Domestic Financial Market
9.4.3 Respect for Rule of Law and Sanctity of Contract
9.4.4 Offering Incentives
9.4.5 Regular Training of Public Officials
9.4.6 Making Guarantees Available
9.5 Conclusion
Index
Biography
Dr Augustine Arimoro is a Lecturer in Law at Nottingham Trent University, Nottingham, UK. He is also a Barrister and Solicitor of the Supreme Court of Nigeria.
