Since the enactment of the Public Private Partnership (PPP) Act of 2009, there has not been a single successful PPP transaction entered into between the Government of Zambia and any private sector entity under the PPP Act of 2009 (Zambia Development Agency, 2014: 7). According to the Zambia Development Agency (2014:7), 75% of the PPPs that were entered into by the government of Zambia prior to the promulgation of the PPP Act of 2009 were canceled. These include: the Kasumbalesa Border Post, Mpulungu Harbour and Railways Systems of Zambia with an exception of the 65 year concession of the Luburma Market (popularly known as Kamwala Market). These cancellations of PPP concessions coupled with revelations in the Zambian Parliament that concession documentation for the Luburma market which is the only surviving PPP had since gone missing, this led to the research problem statement with an assertion that risks associated with infrastructure project finance are endemic in Zambia. In seeking to explore the validity of this assertion, three research objectives guided the study, namely: assessing Zambia’s general infrastructure project finance and PPP framework in comparison to theoretical normative criteria and selected country experiences; identifying and rating risks through a questionnaire; and proposing an ideal project finance risk management model which can be used as a reference by sponsors in Zambia as they design and structure infrastructure project finance deals. On a scale of 1-5 which was guided by the overal risk score outlined in the study, the average mean score ranking for all the 40 risks under investigation was found to be 3.25 .This indicates that the sentiments among respondents is that risks associated with infrastructure project finance in Zambia are average and not endemic as was affirmed in the problem statement. Despite this ‘comforting’ statistical result, the little progress in terms of earmarked infrastructure PPP deals coupled with deal cancellations as outlined above may be an indication that even the average risks appear to impede on the development of project finance and PPPs in Zambia. There is therefore an urgent need for Government and other relevant stakeholders to begin paying attention to some of the risks discussed in this study especially those with a mean score ranking in excess of 3.50 (high risk). The study in chapter 9 provides recommendations which are grouped under four key headings: addressing the environment for PPPs; providing capacity to procuring entities; paying attention to critical success factors for project development; as well as exploring a variety of possible credit enhancement mechanisms such as guarantees as a way of wooing project investors and improving the bankability of planned infrastructure deals. The Government of Zambia is further advised to avoid using ‘political feasibility “as the core investment criteria in the infrastructure agenda for the country. The study encourages that conventional benchmarks which are a mix of technical soundness, economic viability, environmental and social sustainability, financial/commercial viability as well as market readiness remain the core guiding principle in the project identification process. This will be the only way to avoid developing “white elephants” that may perpetually be a burden to the treasury and tax payers.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:21081 |
| Date | January 2015 |
| Creators | Mweemba, Bruno N |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MPhil |
| Format | xiv, 143 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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