Seddon: PPP vital for growth

By BOSORINA ROBBY
IMPROVED infrastructure such as roads and power system lowers the cost of doing business and is essential for sustained economic growth.
Port Moresby Chamber of Commerce and Industry president Ron Seddon said yesterday that this would allow Papua New Guinea to evolve from a largely resourced-based economy to one where its industries were competitive on a global scale.
To do this, there needed to be a good partnership between the government and the private sector, leading to a public private partnership or PPP.
Speaking at a workshop on PPP hosted by the POMCCI and Institute of National Affairs at the Holiday Inn, Seddon said PPPs were designed to allow the public sector to contract the private sector to deliver infrastructure and related services in a way that maximised the private sector’s incentives to operate efficiently.
“This allows the government to do more with less,” he said.
Seddon explained the PPP concept as a method to procure and deliver infrastructure and services through cooperation between a public institution and one or more enterprises.
“PPPs involve the use of private sector capital to fund an asset which is used to deliver outcomes for the public sector,” he said.
“Under a PPP, the asset may not be ultimately owned by the public sector, however, PPPs involve a long-term financial commitment by the public sector through payments to the private sector, to allow the private sector to recoup the cost of their investment.”
He said the objective of PPP was mainly to enhance infrastructure and services delivery by utilising private sector capital, management, innovation, technology and other resources.
Seddon said PPP would work very well in PNG due to a vibrant private sector with the capacity to deliver infrastructure and related services.
“What we need is a commitment from the government to prepare and tender PPP projects in a systematic and transparent way,” he said.
“The government signalled its intention to do this in 2008, with the adoption of the national PPP policy.
 “The policy outlines best practice principles for developing and running a PPP programme that would attract good quality investors and allow the government to access the expertise required to prepare robust PPP arrangements.
 “The policy, unfortunately, has never been implemented, nor have any new PPP transactions.”
Seddon said the POMCCI was hopeful that Treasury Minister Don Polye would be the champion of the PPP as highlighted during his budget speech last year to finalise and submit a PPP bill to parliament in the March 2012 session.
The workshop was attended by many private and public sector organisations to discuss the pros and cons of the concept.