Egypt has invested $10.3 billion in public-private projects (PPPs) infrastructure since 1990, ranking second after Algeria in the Middle East and North Africa (MENA) region, stated a recent report by Mashora Group.
The sum has been concentrated mainly in four sectors: electricity, natural gas, ports, and water and sewerage, the report said.
The report pointed out that the COVID-19 crisis has pushed international institutions to shed light on PPPs in MENA, which have been grappling with growing budget deficits, searching for alternative forms of financing, and delivering infrastructure projects.
Yet PPPs investments in the region are facing serious challenges, according to the report, as the level of private sector contribution in financing and delivering infrastructure services differs notably across MENA countries.
“While Morocco tops the list in terms of total investment, exceeding $22 billion, the West Bank ranks at the bottom
with a total investment of only $239 million. Furthermore, the regulatory and legal frameworks in MENA countries differ in their readiness to adopt PPP projects,” the report said.
Moreover, PPP sectors in MENA differ from international practice, where PPPs have been used in both economic and social infrastructure projects, such as train stations, bridges, and highways, as well as hospitals, schools, prisons, and social housing.
By contrast, PPPs in MENA are often restricted to high-tech and technology-intensive sectors, particularly airports, independent water and power plants, as well as ICT, with no focus on the most-needed social infrastructure projects.
The report sets two key factors behind the lack of PPPs in a wider range of social services in the MENA, including state dominance in the provision of these services, and the insufficient capacity of the private sector.
Amid the current global circumstances that also affect the MENA region, the report said that PPPs can act as an effective engine to address the infrastructure deficit that hinders economic and social development in the region and to fill the current PPP pipelines with sustainable and much-needed projects that can contribute to the provision of social services and the necessary infrastructure.
The report called for revisiting the traditional roles of the private and public sectors in infrastructure delivery. The local private sector in MENA countries needs to be empowered by the government to design and construct mega-infrastructure projects. This can be achieved by enhancing the capacity of and trust in the private sector’s credentials.
It also urged MENA countries to streamline government services and bureaucratic barriers to support the uptake of PPPs.
The report noted that in most MENA countries, heavy bureaucracy impedes the private sector’s role to function or do business. In addition, lengthy procedures cost the private sector its two most valuable resources -- time and money --increasing chances for corruption and unethical practices.