Bugesera International Airport, the biggest PPP

In recent years, the government of Rwanda embarked on infrastructure development through Public Private Partnerships (PPPs), as one of the ways to accelerate the country’s economic development.

Sunday, August 13, 2017

In recent years, the government of Rwanda embarked on infrastructure development through Public Private Partnerships (PPPs), as one of the ways to accelerate the country’s economic development.

PPP is the most recent addition in the world of economic development and growth.

As such, the government started a number of schemes in joint collaboration with private sectors in order to give national economy an impulse and thus enhancing the pace of economic development.

PPPs have become a prerequisite in every dynamic and developing country. Currently, the government has engaged with private sector in many areas of PPPs, such as infrastructure, tourism, energy, ICT, mining to name but a few.

It is in that context that the government of Rwanda entered in PPP agreement with Mota Engil Group, a Portuguese company specialized in the sectors of civil construction, among others, to finance and construct the Bugesera International Airport.

President Kagame, in laying a foundation stone on the massive project, said "the Bugesera International Airport is an important part for Rwanda’s strategy for socio-economic transformation, it is key to our ambitions to grow tourism and trade, aviation, finance and ICT sector”.

With the first phase valued at over $400 million, Bugesera International Airport is the country’s biggest Public Private Partnership.

Since the adoption of legal frameworks of Public Private Partnership, a number of PPP schemes have considerably proliferated.

These pieces of legislation illuminate the importance of PPPs to the country’s socio-economic development and growth.

Over and above, these laws legitimise the demonstrable need to engage private enterprises in financing infrastructure development.

In that pursuit, there’s also a shared-risk by private enterprises. Traditionally, such a responsibility was rested squarely on the State. There’s now a paradigm shift anyone would welcome.

Private sector is equally responsible to contribute fundamentally to the overall development and growth of the nation.

The present undertaking between the government of Rwanda and Mota Engil Group is an incredibly enormous investment designed to build a new terminal and expand facilities to accommodate an increasing number of passengers per annum.

The kind of agreement entered between the former and the latter can described as "Build-Operate-Transfer (BOT)”. Here, a partner finances, designs, constructs an infrastructure facility or other asset to provide services and maintains it for an agreed time period after which a transfer of the infrastructure facility or other asset is made to the Government.

In other countries, it is known as "Build, Own, operate and transfer (BOOT)”. It means the private company builds the project, they then get to own and operate it for some period of time (like 20 or 25 years) during which they collect revenues.

At the end of that duration, the project is handed back over to the government. By the BOT model it is aimed at increasing the contribution share of the private sector in the infrastructure investments, to relieve the burden of public finance and to increase efficiency in the provision of services.

Undoubtedly, the construction of the new airport will bring the prestige to the country on the international plane, a more prestigious position both in terms of the splendid terminal and the runway, as well as the comfort and facilities they present.

The Bugesera International Airport will obviously bolster aviation sector at the highest level in terms of efficiency and beauty. As a result, the country will be able to respond to the current intensity of permanently increasing demand in the aviation sector from year to year.

New airport is a huge investment that will positively impact various sectors, as earlier noted. What a prestige to have a modern terminal and the runway like those we have seen elsewhere! Rwanda looks forward to attaining a new airport that meets international aviation standards.

Ultimately, the government is steadily committed to going into PPP with private sector for a couple of obvious reasons. First, it does that as a way of searching more resources to do more projects and therefore speed up infrastructure development.

Second is to transfer risk to the private sector and gain private sector delivery efficiencies. Third, to integrate the design, build, operation services leads to innovation.

Last but not least, the PPP approach, which incorporates performance criteria and quality and durability requirements, leads to a focus on service delivery which ultimately benefits customers.

On the whole, the present undertaking spins around improved public services. Public services should accommodate the features of being rendered regularly and continuously, being oriented towards proving public benefits, and providing for social needs.

The State, which is unable to provide adequate financial and technical resources necessary for the established and operation of public services, has started to look for ways and methods of ensuring them to be realized through corporate bodies.

And one of the basic services, which are acknowledge to be important in terms of especially economic growth and progress of a country, are public building services.

The writer is an international law expert.