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Springtime for infrastructure

By Ali BENSOUDA, partner at EDIFICE CAPITAL


Written by Frédéric Dubessy on Tuesday, May 24th 2011 à 14:55 | Read 683 times




Springtime for infrastructure
One of the side effects of the scent of jasmine drifting across North Africa is that people are becoming more aware of the importance of good infrastructure, especially social infrastructure. That is why we have seen calls for cheaper and better public services at the demonstrations and marches. 

Alongside these practical demands, local bloggers and journalists have shown more interest in all current public contracts and concessions. Corruption is being exposed and people are starting to speak out against any conduct that is not in the interests of the general public.

Whether this upturn in morality is being driven by people taking to the streets, as in Tunisia and Egypt, or by the present government, as in Morocco, the trend is irreversible and we can hope only that structural change comes about quickly. 

This reaffirmed sense of citizenship puts pressure on governments and ensures they have less room for manoeuvre. First, they face budgetary restrictions because they have had to free up resources (food subsidies, more civil servants, etc.) in order to placate their populations. Second, international aid is being squeezed as a result of the sovereign debt crisis in Europe. Finally, there is a desperate shortage of people able to manage several large-scale government projects. 

Public-private partnerships, and more specifically the Contrat de Partenariat, seem to be the best way of overcoming these restrictions while still meeting peoples’ expectations. This type of agreement allows the public sector authority to ensure that 
- high-quality social infrastructure is provided and maintained over the long term; 

- projects are completed on time and on budget; 

- project governance is improved. 
 
In order to implement such a system, southern Mediterranean countries should take inspiration from best practice to: 

- amend legislation with a view to implementing this new method of awarding public contracts through competitive dialogue;

- attach a PPP unit to a coordinating ministry (e.g. the prime minister’s office or the finance ministry) with the
aim of adding national government experience to the various public and regional authorities;

- stimulate local industry by encouraging foreign companies with an interest in the market to transfer their
expertise;

- strengthen government follow-up (technical, legal and financial consultancy) and monitoring (extending the
powers of national audit offices to include PPPs) processes.

The acceleration of these reforms, which are already well under way in the likes of Egypt and Morocco, will be the difference between a country enjoying a perennial springtime or sliding into a winter of discontent.


   



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