Dr Wale Babalakin, Pro-Chancellor and Chairman, Council, University of Lagos has identified inadequate funding among others as obstacles to the success of Public-Private Partnership (PPP) scheme in Nigeria.
Babalakin made the observation on Monday in Lagos while speaking with the News Agency of Nigeria (NAN), on the side-line of “Construction Summit 2018’’ organised by the Faculty of Environmental Sciences, University of Lagos.
He told NAN that PPP scheme would be more effective if provisions were made for the necessary financial and other requirements for its success before embarking on it.
According to him, once a project is wrongly procured, such project is bound to fail.
Babalakin stressed the need for more commitment of the public and private sectors during the project life circle.
“Many PPPs have failed in the past due to unavailability of viable financial market.
“Once the necessary financial requirements for a project are not made available before starting the project, such project is bound to fail,” Babalakin said.
The Pro-Chancellor also said that human attitude was another factor hindering the success of PPP scheme.
Babalakin said that governments should respect contractual agreements with private firms to enable PPP schemes to be successful.
He called on government to build confidence among investors, respect contractual agreements with private firms and provide special incentives to encourage private investments.
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According to him, government, most times, breach contractual agreement by failing to pay the contractors as at when due.
He added that this posed a great challenge to effectiveness of PPP programmes.
“Companies agree to take on risk and management responsibility in exchange for profits linked to performance.
“But once private firms/individuals notice that government does not keep to its promise in PPP projects, they will not be willing to partner,” he said.
“Private individuals and firms are not charity organisations. Most times, they borrow money to execute projects and need to pay back.”
Chairman of the council called for the right policies, legislation and regulatory framework that would guarantee stable macroeconomic
environment for success of PPP scheme.
“If government will put in place favourable legal framework to guarantee investors’ confidence, assuring them that there will not be challenges with their profits/dividends, there will be respect for contractual agreements.“
He also called for the stability of the macroeconomic environment so that PPP scheme could thrive.
Babalakin noted that Public–Private Partnership (PPPs) had become popular tool to deliver infrastructure, housing and public services around the world.
