sound financial package is central to the viability of PPP projects. PPP
infrastructural projects usually resort to non-recourse financing and use
financial instruments such as equity, debt, supplier and buyer credit. A
guaranteed source of income is key to attracting investors to the project.
(Merna & Dubey, 2008).
A good financial package should
perform functions such as qualitative financial analysis, stable debt and
capital financing currencies, payment and dispositions; long-term debt
financing, which minimises the risk of refinancing. (Merna & Dubey, 2008).
Farhana (2010) argues that any
PPP project should have a sound financial package that encompasses factors such
as sound financial analysis; sensible schedules for investment payment and
drawdown; appropriate combination of financing sources and standby facilities;
stable currencies of debts and equity finance; high equity–debt ratio; low
financial charges; fixed and low interest rate financing; long-term debt
financing that minimizes refinancing risk; ability to deal with fluctuations in
interest and exchange rates; and appropriate payment structures.
involvement in PPP contracts through the provision of guarantee is of great
importance. It is the responsibility of the government to ensure that assets
are procured and services are supplied on time. Service benchmarks are required
to guide the contract. (Woodward, 2005). Government as a key player in the PPP
arrangement must focus on service regulation and provide strong support to the
private sector. (Abdul- Rashid et al., 2006).
2.8 The Problem of Successful PPP Implementation in Ghana
Bureaucracy in public institutions is a key challenge to PPP
implementation in Ghana. Approval and implementation decisions are taken at the
political level which usually makes it difficult to reach conclusions (Kwakye,
2008; Abubakari, 2012). Further to this, lack of political commitment and
reluctance are among some of the main causes of instability in PPP in Ghana
(Asamoah, 2012). Anytime there is change in government, PPP projects suffer (Flinders
& Pushak, 2014). Political corruption is also another challenge for the
implementation of PPP projects (Rockart, 2008). It occurs when public officers
obtain illicit personal gains whilst on duty. When officers tasked to represent
government on PPP projects illegally obtain favours (Tiong & Alum, 2007).
a problem of distrust exists regarding the private sector’s provision of
infrastructure. Some politicians are suspicious of
the intensions of some private sector players (Rockart, 2008).
leaders may oppose PPPs for fear of losing power or responsibility such as
having to delegate responsibility or authority over infrastructure assets (Qiao et al., 2011). The
private sector also has trust issues with public officials because they
perceive them as corrupt and lazy (Qiao et al., 2011).
Private enterprises lack financial resources to engage in huge PPP projects,
while others with the means are not motivated to commit to them (Jacobson &