Africa-Press – Zambia. In the Chiefdom of Zambia,the only water well in the village was fast drying up.That was the only source of water for the entire village population.The Chief in the village was worried.The Chief knew that the lasting solution to the water problem was to reconstruct a solar powered water reticulation system.The Chief’s plan was to move away from drawing water directly from the well but instead connect water pipes to all the households in his chiefdom.To do that, the Chief needed to raise K2,112,000.00.However, the villagers were willing to be contributing a total of K8,000.00 per month towards this project of a public good nature.By implication, that meant to wait for 22 years to make the project sum.The Chief had no time to wait for that period.
The Chief approached his wealthy brother who was a businessman to borrow him the K2,112,000.00 to be repaid after a number of years with minimal interest. The brother was willing but he had reservations especially that the Chiefdom was already struggling to pay off the debt left behind by his elder brothers predecessor.Besides that,some of his concerns were as follows;
1.It would be difficult to penalize his elder brother in an event that he defaults because of the relationship.
2. The period of repayment was too long for him to expand his business but worse still in an event that there was change of leadership. However, the Chiefs young brother businessman had a proposal for his elder brother.
He told his elder brother that,to go round his concerns,he was willing to borrow the money direct to the contract because it would be easier to penalize the contractor than his own elder brother in an event of a default.The businessman assured his elder brother that the contractor would be accountable to his chiefdom to deliver a quality water reticulation system but when it comes to finances, the contractor would be accountable to him.
The Chief and his advisors took time to analyze the proposal. They looked at almost all the options, advantages and disadvantages. Amongst the options were;
1. To request his people to start contributing the K8,000.00 per month for the next 22 years before the water project is done.?
2. To negotiate with his brother to pick up the project and do it.This means that the brother should be willing to wait for 22 years to recoup his money.However,in an event that the Chief is replaced due to one reason or another, the continuity of the arrangement may not be guaranteed.
3.To find a willing contractor with enough resources to pick up the contract and recoup his money in 22 years
4. To find a contractor who would be willing to borrow funds from his brother on agreed terms. The Chief and his team settled for the fourth option.
They realized that what the people want was water.They picked up this option because water will not only be delivered to all of his people but the chiefdom would not contract any debt from this arrangement.To the contrary, the chiefdom would still retain a share in the K8,000.00 monthly contributions from the villagers which could be used on other communal needs.Besides that, the contractor would continue carrying out routine maintenance of the water reticulation system for the next 22 years at his own cost!
This is the PPP arrangement surounding the government,NAPSA and the contractor. The Chief in the story is the government, the young brother to the Chief is NAPSA.The third party remains the contractor.The water reticulation system is the Lusaka Ndola dual carriage road.
To construct this road, the government had the following options; 1. To borrow funds in form of loans,that was the route the previous regime opted. 2. To negotiate with NAPSA to pick up the project
3. To find a willing Zambian/foreign contractor to do the road and recoup his money after 22 years from shared toll fees between the government and the contractor ?
It’s easy for the government to borrow funds from NAPSA and finance this road project but there is no guarantee that NAPSA would get back it’s money from government without a fight, worse still in an event of change of leadership within the period of 22 years.
However, it’s easy for NAPSA to get it’s money from a private contractor.In my view NAPSA was very prudent. Secondly, the contractor would ensure that he delivers a quality product if he has to avoid the costs of frequent maintenance during the 22 years contractual period.
Thirdly, the complaint that the toll fees money people were paying was not being applied towards the maintenance of roads would be addressed. My question is what is wrong with this arrangement? The government will deliver this long awaited Lusaka/Ndola dual carriage way without either spending any money or incurring any debt at all. How I wish the government can find another PPP partner to work on the Lusaka to Lusaka road via Mongu, Livingstone route.
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