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Why PPPs

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Why PPPs

Benefits of PPPs to the General Public and Government

There is a massive need for Malawi to augment the existing infrastructure, extend public services to those who are currently not receiving them, and improve the quality of services received by all of society. Whereas traditional forms of contracting utilise the private sector for specific services to the government, PPPs are intended not only to provide government with a service, but to do so in a way that improves the long-term sustainability of the service through enhanced efficiency, stronger human and institutional capacity, greater accountability and/or improved technology. PPPs have the potential to offer Malawi the following benefits:

  1. Acceleration of infrastructure provision through mobilisation of private sector capital, Faster implementation of development projects because government would not have to wait until it can afford to address the matter;
  2. Reduced whole life costs, because of private sector efficiencies; Better allocation of risk, because the private sector has experience in handling commercial risks, while government typically does not;
  3. Better incentives to perform, because a failure to perform by the private sector means payment would not be issued, Improved quality of service, again because quality of service would be a key performance indicator (KPI) upon which payment would be based;
  4. Generation of additional revenues as a result of the technical expertise possessed by the private sector and the efficiencies that would result, Strengthened accountability, due to contractual provisions that would link the private operator’s remuneration with performance, and;
  5. Enhanced public management, because government now would have the time to manage, rather than be distracted by operational and service provision requirements.

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