Three infrastructure projects next in line

The public sector is gearing up to participate in public-private partnership (PPP) projects that are expected to commence by the end of the year. Three projects are next in line in the sectors of information technology and transport. In parallel, the Higher Council for Privatization and PPP (HCP) is laying the groundwork for these projects and many more.

THE RIGHT IDEA

‘Partnership’ in PPP projects refers to partnership in profits, revenues, or investments. However, it is also a partnership in risks. In management contracts, the type that are currently used in all public administrations at present, the risk is borne by the public sector alone. “It is the most corrupt and inefficient type of contract that we should never adopt,” said , Chairman of the HCP. The other extreme, when all the risk is transferred to the private sector, is referred to as ‘privatization’. In this case, the government would only have a supervisory role. “Privatization is the right model in certain industries, like telecoms,” Hayek said. PPP falls in the area between privatization and management contracts. According to Hayek, there has not been a single successful PPP project locally. “We have had a series of PPP contracts and all have been either marginal or extreme failures because we never adopt a best practice approach,” he