Last Wednesday the news about the beginning of the tender process for the construction of a Two Billion United States Dollars Bridge over the Targrin River to connect Freetown to the North West of Sierra Leone was serenaded by the ruling party supporters while critiques in the country looked at the proposed construction with a thoughtful eye.
Questions regarding the cost of the bridge, environmental issues and whether the construction of a 2 Billion Dollars Bridge should be a priority in a country where majority of its people are living below a dollar a day have sprouted up.
Dr. Tambi, Head of the Presidential Infrastructure Delivery Team, a special unit at State House attempted to answer some of the questions by categorically telling the people of Sierra Leone that the 2 Billion Dollars was just for the construction of a bridge that will have provisions for a railway in the middle of it.
The people for whom the bridge will be constructed are yet to see the details of the survey and the financing model which Dr. Tambi said was done even though he only revealed some superficial stuff.
However, there are issues of the 2 Billion Dollars proposed Bridge that need to be trashed and panel beaten for the people to understand especially for a government that rides on the back of “transparency.”
WHO WILL FINANCE THE PROPOSED BRIDGE?
In the same interview, Dr Tambi said that the bridge will be financed by the investor that will do the bridge in a form of Public Private Partnership agreement.
Public Private Partnership is a term contract (a ‘PPP Contract’) between a public-sector party and a private sector party for the design, construction, financing, and operation of public infrastructure (the ‘Facility’) by the private-sector party with payments over the life of the PPP Contract to the private-sector party for the use of the Facility, made either by the public-sector party or by the general public as users of the Facility; and with the Facility remaining in public-sector ownership, or reverting to public-sector ownership at the end of the PPP Contract. (Yescome, 2007: p.1)
It is also a form of structured cooperation between public and private parties in the planning, construction and/or exploitation of infrastructural facilities in which they share or reallocate risks, costs, benefits, resources and responsibilities. (Koppenjan, 2005: p. 137)
In view of the above ideas of PPP, Dixon’s Pen sees PPP as a financial structure in project financing in which the government shares the liability or risk of a project with a private entity where the later takes majority of the liability or risk.
There are different models of PPPs and the most common ones are: Build, Own and Operate (BOO), Build, Lease and Transfer (BLT), Build, Operate and Transfer (BOT)and Design Build Finance and Operate (DBFO)
Amongst the above models, Dr Tambi said the government was going to do the BOT in which the investor is expected to take majority of the risk.
He said that there will be a Special Purpose Vehicle (SPV) which will include the various stakeholders as if it is a new thing in PPP arrangement- all PPP arrangements should have SPVs.
According to Public Financial Experts, it is misleading for government to say that in BOT model of PPP, government will not spend a dime or will not provide some form of security.
“No investor will come and invest 2 Billion Dollars in a developing country without a secured guarantee especially when the risks are so great,” a public financial expert says.
POLITICAL RISK GUARANTEE
Let me hasten to say that the very thought of a Lungi Bridge that will connect Freetown and the North West is a laudable one but the government needs to do more explaining.
To say that the financing model of the proposed bridge is an off-balance sheet is not just enough because in Management of Project Financing of large infrastructure projects, there is a fundamental principle called Political Risk Guarantee (PRG).
Therefore, one would like to know which agency will provide the PRG, and how much is that going to cost government because projects of this nature warrant some form of comfort or an assurance for the investor that in the event of any major political change, such would not affect the project or the project terms.
Thus, the government is under obligation to fully explain this to the public, and it must ensure that it is well put in place to attract contractors.
How would an investor pour huge money in a country where a sitting President will wake up one morning and slam an Executive Order No 3 to dissolve a parliamentary approved agreement with a private company without recourse to the due process.
This was seen by President Bio recently when he cancelled the Cargo Tracking Note (CTN) agreement with Transport and Port Management System (TPMS) by just the stroke of a pen on the 14th of February 2019 because according to him, they failed to pay 11 Billion Leones to government.
Just as recent as last week, the Minister of Mines, Rado Yokie by himself terminated a mining agreement that was approved by Parliament with Tonkolili Iron Ore Project without due process.
Even the cancellation of the Mammah Project is enough reason for investors not to invest in a large infrastructure without a guarantee because it may be seen useless by another government.
Because of major risks as the ones highlighted above, government is definitely going to provide some form of assurance for this project, if at all it will come to fruition.
ENVIRONMENTAL IMPACT ASSESSMENT
Apart from talking the politics of the projects, Dr Tambi failed to explain the potential environmental and social issue associated with the proposed 2 Billion Dollars Bridge and whether an Environmental Impact Assessment (EIA) is part of the survey that was done by the government.
Therefore, if at all the feasibility studies on the bridge has been concluded, one will want to know the findings of the holistic environmental impact assessment.
As it stands now, it is clear that there are many questions than answers for the government of Sierra Leone on this ambitious 2 Billion Dollars Lungi Bridge Project.