Public Private Partnership is currently a risky arrangement, Daily Monitor has learnt.
Public Private Partnership (PPP) is a long-term contract between a public authority (government) and a private partner to provide infrastructure or services in which private sector provides finances and expertise.
Government has since come under fire from various quarters for seemingly trying to “mortgage” the country using the PPP initiative which was assented to by President Museveni in May 2015.
However, to the government, the biggest problems are not the fears expressed by critics but encumbrances restricting the operationalisation of the PPP law.
Not until 2015, the country did not have a distinct piece of legislation governing public private partnerships.
Despite the law which was enacted in May 2015, it is risky to enter join a grand partnership because the regulation that permits the PPP law to be used is not ready yet.
The law contains provisions regarding management, processes and procurement rules of PPP. For this to be binding in any partnership arrangement, the regulation operationalising the law must be instituted.
Speaking in Kampala yesterday at the sideline of the PPP workshop organised by the ministry of Finance and supported by the UK government, State Minister of Finance for General Duties, Mr Gabriel Ajedra, admitted that operationalisation of the PPP law is long overdue.
He said: “Putting up legal and institutional framework as required by the law took a lot of time. Currently, the regulation that should operationalise the law is still before the first Parliamentary Council. We also have a challenge with the funding for the PPP unit.”
Worse still, he said Uganda has a funding gap for her infrastructure projects alone of Shs83 trillion.
“We need to find partners who can close this gap,” Mr Ajedra said.
In the interview with Mr Ajedra, it emerged that the government is aware that borrowing for infrastructure projects is not tenable going forward. That is why it prefers partnering with the private partners rather than borrowing, a move suggesting that the country’s borrowing is getting out of hand. He believes PPP is the way to go because budget allocation alone cannot deliver the country to Middle Income status by 2020.