Exploring the Challenges and Structural Changes for Effective Implementation of PPP in the Road Sector

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Ghana’s capacity to fund its infrastructural projects was seriously challenged in the early 1980s when the economy was hit by severe crisis, which resulted in the adoption of the International Money Fund (IMF) and the World Bank inspired Structural Adjustment Program (SAP). The way forward the Ghanaian government could partner the Private Sector in the provision of infrastructure and service such as roads, water, housing etc. has been discussed on national platforms across the country. The current global economic recession in addition to Ghana’s declining revenue base, makes sources of alternative means of funding road infrastructure very challenging. Public Private Partnership (PPP) presents a viable solution to the challenge posed by global financial crisis. The dilemma in adopting the PPP approach by road agencies and departments begins with a number of challenges which needs to be explored. The aim of the study was to explore the challenges of Public Private Partnership (PPP) model of procurement for road infrastructure in Ghana. The specific objectives included; to identify the key challenges that affect the implementation of PPPs in the procurement of road infrastructure in Ghana and to identify the structural changes required to improve the success rate of PPPs. The study made use of questionnaires as means of gathering useful data for the study. Developed questionnaires were administered through the use of snowball technique of sampling to collect data from the respondents. Statistical Package for Social Science (SPSS) version 16 was used to perform descriptive analysis whiles Relative Importance Index (RII) was used to rank the identified factors to determine the most pressing issues in order of importance. Analysis from the study identified these challenges to the usage of PPP models: Demand Risk (if traffic volumes do not turn out as expected); Design risk (improperly thought through output specifications); Construction risk (delays, contingencies); Legal risk (land acquisition issue); and Limited level of knowledge of PPP among Government institutions. In addition, the study revealed that some changes required to improve the success rate of PPPs are that: all contracting entities should ensure that the need to attain maximum Value for money is made paramount; every PPP arrangement should have a clear table or metrics showing the allocation of risk to the party best able to manage the risk; every contracting entity seeking to undertake PPP project should specify the expected output of each project; and also contracting entities should consider end-user affordability as one of the key considerations in making decisions related to the feasibility of PPP projects. It is therefore recommended that education and publicity is needed to increase the awareness of PPP model of procurement for road infrastructure.
A Thesis Submitted to the Department of Building Technology, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the award of a degree of Master of Science in Procurement Management.