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Schlettwein speaks public private partnerships

Schlettwein speaks public private partnerships

Being a vocal and active motivator of public private partnerships, the Minister of Finance, Calle Schlettwein said the role that public private partnerships plays in promoting investment, net economic gains and efficiencies can not be overemphasized.
“Private sector investments and partnerships in developing public infrastructure and the delivery of related public services as a result of public private partnerships formations are envisaged to be a key building block in the economic progress of the country,” Schlettwein said at the recently held Public Private Partnership conference.
The national annual conference aims at gaining a perspective on how the government wishes to shape the public private partnership environment in the country, among others.
Schlettwein stressed that there is a need to acknowledge and embrace the dichotomy that through public private partnerships, relatively expensive private capital for developing the projects that would serve the public at large can be channelled and thus where affordability will be an important consideration.
The minister added that given this key consideration, a public private partnership project will be a suitable solution only if there is an ability to derive substantial efficiencies from the involvement of the private sector.
“We believe that Value for Money can be further enhanced by the two fundamental principles of output orientation and competitive procurement,” Schlettwein said.
Given that the Ministry of Finance holds the mandate of promoting public private partnerships in the country, Schlettwein stated that the ministry is often presented with project proposals for consideration.
According to observations made by the ministry, in many such instances, the central premise for why the private party believes that it is proposing a public private partnership project to the ministry is purely because instead of the government paying for a given asset or service immediately, repayments from public funds will be modelled as periodic future payments.
Schlettwein stressed that contracts in most cases create financial obligations for the government in the form of ‘direct’ funding commitments or ‘contingent’ liabilities.
“Treasury is therefore interested in understanding the financial obligations and minimizing risk factors related to specific public private partnership project initiatives. Even more importantly, the Ministry is interested in the acceptance, proliferation and success of public private partnership projects in Namibia as these are the best opportunities to create public infrastructure with a minimal draw on limited financial resources from the treasury,” Schlettwein said.
The minister added that the public private partnership initiative in Namibia would bear fruit only if private investment are attracted by identifying and preparing public private partnership projects to a meaningful scale.
“At the same time, a critical measure of our success shall also be that public private partnerships provide tangible benefits to the population, and are undertaken in a manner that is sustainable and efficient. One can appreciate that these are several considerations that we must be cognisant of at the time of preparing a public private partnership project and this is an endeavour that requires diligent planning and persistence,” Schlettwein said.

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