Kevin85ify
JF-Expert Member
- Apr 6, 2019
- 2,684
- 3,429
Actually I take a different view, private sector is more efficient at allocating resources where needed than governments. Competition among private entities driven by the profit motive ultimately is good for the consumer because it lowers costs and puts more commodities in the hands of ordinary individuals. Private interest and individualism is a key driver of economies even in China. Private sugar factories in kenya are thriving and growing while government owned millers are dying under crippling politics and bureaucracy.You, at least, seem to understand the rules of the game regarding PFI/PPP. It's good that you mentioned about a study on willingness to pay. Also the study on ability to pay is important.
Again being financed by private party does not mean that the GoK has no liability on that arrangement. Yes GoK has a responsibility, this's why during the financial closure, the SPV needs a guarantee from the GoK to avail it before the bank so as to be given the money. The guarantee assures the financier of the project that once the project company fails to honour its obligations to service the loan, the GoK will step in to pay without any further notice.
The cash motivation is only thing that makes people to feel that money is not coming from GoK. Yaa it's true, the GoK will not set aside any budget for this project like other conventional or traditional procurements. But it has big commitment regarding the project.
Hata hivyo PPPs are good way of providing public assets. But it should not make the public to relax and leave everything to private party. If left to private sectors, then in future we will witness a good number of public assets to be owned by private comparator in expense of citizens.
Private milk factories have already overshadowed government owned KCC, while making milk production cheaper and more affordable.
In my view governments are the bottleneck to development and we should reduce government interference in the lives of citizens by reducing control of government in the economy ie. Lower taxes, less regulation, letting the market decide how best to allocate resources.