A best practice framework for public-private partnership implementation for infrastructure development in Ghana

Abstract

Public-Private Partnership (PPP) is a procurement method which brings the public and private sectors together in order to deliver 'value for money' public infrastructure. The concept has grown over the years with many governments particularly from developing economies/countries seeking to enhance infrastructure growth and development through this scheme. Similar to many other countries, the Ghanaian government is keen in utilizing the PPP concept to bridge the current huge infrastructure funding gap. However, in spite of the attempts and considerable efforts by the government since PPP introduction in 2004, few physical infrastructure projects (i.e. public construction projects) have been procured, with many others failing to proceed successfully to the implementation stage. The lack of understanding, skills and knowledge of local practitioners on the successful ways of procuring construction PPP projects within the local context has been the major setback towards the policy development. Against this backdrop, this research study aims to develop a practice framework for successful PPP implementation in Ghana drawing on international experiences specifically from the Hong Kong Special Administrative Region (HKSAR). In order to achieve the research aim, six objectives are derived; i) to develop a conceptual model for successful implementation of PPP projects; ii) to identify representative case studies from other countries to examine their approach to success and failure; iii) to investigate the evolution and experience of PPP in Ghana; and identify case studies to examine their implementation constraints and successfulness; iv) to identify and evaluate the reasons for adopting PPP, obstacles/constraints and risk factors of PPP projects in Ghana; v) to identify and evaluate the critical success factors (CSFs) for PPP in Ghana, and to develop a model for predicting the success of PPP projects; and vi) consolidate the findings to develop a best practice framework for PPP implementation in Ghana. The objectives are achieved through comprehensive review of germane literature, in-depth analysis of case studies in developing (i.e. sub-Saharan African region) and developed (i.e. Hong Kong) economies/countries, semi-structured interviews with experts from Ghana and Hong Kong and questionnaire surveys with relevant experienced PPP practitioners in Ghana and Hong Kong. Both qualitative and quantitative analytical techniques are used for analysis. Results show that reasons related to the economic and social benefits of PPPs are more important in Ghana, whereas reasons related to the efficiency and quality service delivery of public facilities are more important in Hong Kong. For the implementation constraints in PPPs, constraints related to the general investment climate of PPP projects (i.e. ecological conditions of PPPs) are ranked higher in Ghana, whilst in Hong Kong, implementation constraints related to the project organization and negotiations are ranked higher. On the risk factors in PPP projects, country risk factors are generally ranked higher in Ghana. The top five significant risk factors include corruption, inflation rate fluctuation, exchange rate fluctuation, delay in project completion and interest rate fluctuation. In Hong Kong, project-specific risks are generally ranked higher, with the top five significant risk factors being delay in land acquisition, operation cost overruns, construction cost overruns, delay in project completion and political interference. On the CSFs for PPP projects, factors related to the socio-political and economic conditions of PPP projects are very critical in Ghana. Whereas, organizational and relationship related CSFs are identified to be significant in Hong Kong. Only 'favourable legal and regulatory framework' is found to be very critical in both economic jurisdictions. Results from the MRA technique (stepwise selection) reveal three best predictors of PPP projects success in Ghana; these include appropriate risk allocation and sharing, sound economic policy and right project identification. The findings of the first five objectives are triangulated to develop a best practice framework for PPP project implementation in Ghana. The framework is further validated by PPP experts from Ghana to demonstrate its reliability, comprehensiveness, adequacy and objectivity. Overall, this research study informs practitioners in Ghana and other neighbouring developing economies/countries of the effective and strategic measures to employ when implementing successful PPP projects. It also makes substantial contribution to knowledge on the international best practices for PPP implementation.