Transparency and PPPs

In an unexpected move the Government has decided to put up Sri Lanka’s highways for Public-Private-Partnership. Having kept the move under wraps it began to roll out Cabinet papers in January to establish a dedicated company that will be able to enter independently into PPPs with external parties raising concerns of due process and transparency. 

Highways are a precious public asset and how they will be managed, developed and used is a matter that is extremely relevant to citizens. As such the Government has to engage openly and frequently with stakeholders to make such a project successful.  

The Government has a pipeline of PPPs, which it is hoping to roll out this year with a wide range of state enterprises earmarked for what is essentially privatisation. Some of these State-Owned Enterprises (SOEs) are already being looked over by international companies resulting in workers becoming insecure about proposals and deeply concerned about their jobs. Four hotels, the Mattala Airport, SriLankan Airlines and a host of plantation companies have been listed by top Government ministers as being next in line. 

In theory PPPs make great sense. Today, PPPs are considered “creative alliances” formed between a Government entity and private developers to achieve a common purpose. But what Government ministers must remember is that this partnership is a process not a product. Successful navigation through the process results in net benefits for all parties and without buy-in from employees a successful PPP is impossible. 

The Sri Lankan Government has managed successful PPPs such as Sri Lanka Telecom (SLT), when each member of the staff was sent letters clearly explaining the point of the foreign investment and what the company as well as the staff gain from the change. Repeated rounds of meetings made workers a key part of the transfer process to ensure that the PPP could be sustained, a worthy example for policymakers to remember as they mull dozens of new projects.  

The vision for the program should be the result of a consensus-building process that identifies the opportunities, objectives and ultimate goals for the community. The local government must consider and establish its long-range public interest goals and resolve any conflicts that it might have for the specific project in question. It is essential that the overall development strategy is described both verbally and graphically to ensure that both the public and private partner understand the program.

It is also important to manage expectations. During this stage of the process, establish a schedule that clarifies the expectations of the public decision-makers. It is a good idea to craft a public awareness program to inform stakeholders of the goals of the development strategy and the specific projects that are identified.

Given Sri Lanka’s chequered privatisation history, where a slew of State companies such as the Ceylon Steel Corporation, Pugoda and Thulhiriya textile mills, Kanthale and Sevanagala sugar plantations, Valaichchenai paper mill and Kankesanthurai cement factory went bankrupt shortly after privatisation, the Government would have to work extra hard to ensure public support. Public enterprises are viewed by many people as being indirect assets of the people with few understanding their losses actually cause deeper hardship for the public. 

Tabling agreements in Parliament, getting independent valuations and dealing with credible companies would be essential steps to ensuring that PPPs are done in the best interests of the country. In addition, the nexus between public jobs and votes is a deep one that should not be underestimated by any Government.