POSSIBLE BENEFITS OF PUBLIC-PRIVATE PARTNERSHIP

ABSTRACT In recognition of the relevant role played by Public Private Partnership (PPP) in the development of infrastructure the world over, the paper seek to find out how PPP initiative can bring about infrastructural development in Nigeria through proper policy formation and implementation. With the political will, regulatory and legal framework. PPP can bring about; Private sector growth and stability, prompt completion of projects, increase in infrastructure development as governments are able to implement more projects and so on. To overcome the challenges face by PPP globally, and in developing countries in particular. The paper recommends: The formation of the proper regulatory and legal framework, strengthening of the banking sector to be able to loan out long term finances to investors, also strengthening of the capital market which is the main source of long term finance so that funds can be raise for such projects, proper dealing with security challenges and also political office holders having the political will to tackle corruption head on then infrastructure development will be achieved in Nigeria. INTRODUCTION The importance of Public-Private Partnerships (PPP) as finance, management and maintenance option for development of infrastructure has been recognized in recent times. As governments the world over are looking for a better option of financing, management and maintenance of infrastructures for development. These forms of partnership bring public and private sectors together in a long term partnership for mutual benefit . This is brought about as a result of government’s recognition that there are some things which the private sector does best and others where the public sector has more to offer. The old argument, as to whether public ownership was always best or whether privatization was the only answer, is simply outdated. Now government the world over firmly believes it will only deliver the modern, high quality public services that the public want and increasingly expect if it draws on the best of both public and private sectors. And the starting point is, therefore, the recognition of the contribution that the public and private sectors can each bring to the partnership in other to bring about development in the society. The government go into Public Private Partnership with the objectives of delivering significantly improved public services, by contributing to increases in the quality and quantity of investment; to release the full potential of public sector assets, including state-owned businesses, and hence provide value for the taxpayer and wider benefits for the economy; and to allow stakeholders to receive a fair share of the benefits of the Public Private Partnership. The stakeholders in this aspect include customers and users of the service being provided, the taxpayers and employees at every level of the organization. Adekunle, (n.d) notes that, there are two basic assumptions underlining PPP initiative in Nigeria namely: more efficient social service delivery by the private sector which is imbued with better risk management; and declining revenue accruing to government occasioned by financial crisis currently troubling the global economy. POSSIBLE BENEFITS OF PUBLIC-PRIVATE PARTNERSHIP According to Colverson, (2011) & Colverson (2012), the following benefits can be derive from PPP initiatives: i. Value for money: Utilizing private sector skills and technology to deliver projects in a more efficient manner, resulting in either lower costs or a superior product for the same investment. ii. Optimization of design and operation: Using outputs based specification allows room for and promotes innovative solutions from the private sector on the design, operation and maintenance aspects of the project, with the intention of improving effectiveness while reducing costs over the whole life cycle of the project. iii. Quicker delivery of project: Private sector capacity and flexibility are seen to be superior to the public sector, and PPPs therefore allow projects to be finished more quickly and on schedule than those attributed to public sector provision. With PPP, the bureaucratic tendencies are reduce thereby makingprojects to be completed on time. iv. Risk transfer: Project risks (e.g., finance, timeframe, planning permits, community consultations) are transferred to the party best equipped to deal with it, both in terms of expertise and costs, to the stability and benefit of the project. v. Increased investment: In public infrastructure, governments are able to implement projects more frequently and on a larger scale because the private sector finance element reduces its need to raise or budget additional funds, as is the case in standardprocurement. vi. Increased budget/financing certainty: The transfer of responsibility (and risk) to the private sector for some of the project elements shields governments from unforeseen financial liabilities following cost overruns, delays, or operational difficulties that would otherwise impact upon the budget bottom line. CHALLENGES OF PUBLIC-PRIVATE PARTNERSHIP IN NIGERIA Public Private Partnerships in Nigeria are face with challenges such as: financial limitations, dominance of public companies, corruption, inability of private companies to access local currency and affordable long term loan. Others include: PPPs are face with the problem of definition, as itis not properly defined in the law permitting the used of the finance option. Incessant changes in relevant political office holders and the Chief Executives of Regulatory agencies is also a major problem with PPP projects. For example the MMA II concessionaire over a period of 7 years has had to deal with 6 different Ministers and 5 different Chief Executives of the Federal Airports Authority of Nigeria (FAAN), each with different policies, divergent opinions and perspectives on Concession Agreement and concession itself (Afolabi 2011). In the same vein, the sizes of the Nigerian banks pose a problem to the survival of such projects as they are unable to give a long term loan, when such loans are available the rates on them will be too high to cope with. Many of the banks officials also lack experience in project financing (Okpara, 2012). There is no sound legal and institutional frame work backing Public Private Partnership in the country, in a situation where there is problem with the arrangement(s) the private sector or investors are left to bear the brunt financially and otherwise (Okpara, 2012). CONCLUSION Public-private partnerships offer great value for money. They also meet high standards of excellence. PPPs have contributed towards the growth and development of the Indian economy in multiple ways. Combining the professionalism of the corporate sector with the welfare objectives of the state has resulted in projects such as the Mumbai airport which are known for their world class facilities and advanced amenities. RECOMMENDATIONS The public sector can be able to realize its objective of infrastructure development and the private sector to make her profit (that is the symbiosis relation not at the expense of the citizens after role) through complementing the government’s effort with finance, maintenance and so on. To realize this therefore, the research recommends that: PPP as a concept should be properly defined by government as it is not defined in the Infrastructure Concession Regulatory Commission Act (2005) Tackling insecurity in the country will go a long way to improve infrastructural development. As during crisis properties are destroy and as such no investor will like to invest his money in a place that it will not be save. The possession of political will by the agents and leadership of government to deal with corruption without any fear or respect for the position of the individual or body.