SOURCE: The Boston Consulting Group
ABUJA, NIGERIA--(Marketwired - May 7, 2014) - Policy makers have high ambitions for regional infrastructure. In Africa, leading organisations set up the Priority Action Plan of the Programme for Infrastructure Development in Africa (PIDA PAP) in 2012, encompassing 51 programmes with an investment need of $68 billion. Such programmes can make a vital contribution to social and economic welfare by boosting intraregional trade, connecting landlocked countries to world markets, or encouraging the sharing of water resources across borders. Implementing such programs is far from easy, however.
"The management of any complex infrastructure programme -- a railway system, for instance, or an electricity production and distribution network -- is difficult enough within an individual country," says Philipp Gerbert, a senior partner at The Boston Consulting Group (BCG) and coauthor of the report. "With transnational programmes, the challenges can be tremendous, especially in Africa, owing to the continent's wide variations in languages, cultures, financial capacities, and maturity of public institutions."
PIDA PAP's original target date for completion, 2020, now appears unrealistic. The question is how PIDA PAP can ever be realised in its entirety. Potential answers are provided in a new World Economic Forum report on the African Strategic Infrastructure Initiative titled Managing Transnational Infrastructure Programmes in Africa--Challenges and Best Practices. The report, developed together with BCG, identifies the key hurdles to be overcome and presents a best-practice framework to guide policy makers, sponsors, and managers and to facilitate the delivery of transnational programmes on schedule, at cost, and at high quality.
Identifying the Challenges ...
The challenges relate to financing, to technical and regulatory alignments (agreeing on the gauge width of a cross-border railway network, for instance, or aligning national axis-load regulations), and to matters of governance and human relations. Things get really complex when you have to coordinate the responsibilities and processes across several countries and the risks posed by political changes are multiplied. So, too, are the delays caused by red tape. The difficulties might also have a historical dimension: a legacy of mistrust or even conflict can jeopardise cooperation between participating nations, and many countries lack a tradition of conducive environmental measures, such as enforcement of anticorruption laws and stringent regulations on public-private partnerships.
... and Overcoming Them
Having outlined these challenges, the report goes on to enumerate the best practices that have been brought to bear in response to them at the programme's various phases. They include: a joint strategic vision for regional infrastructure; a comprehensive cost-benefit analysis assessing the impact in all affected countries; the issuing of a single transnational concession rather than several intranational concessions; a precise allocation of the costs, risks, and benefits to the participating countries; a rigorous and transparent tendering process; harmonisation of regulations; and coordination of demand profiles and maintenance schedules. "This coordination is especially important where consumption and production are located in different countries," explains Tenbite Ermias, a partner at BCG and a coauthor of the report. "If a power plant in one country fails, the main victims might be in the neighbouring country, which can suffer from significant losses due to interruptions in production. Strong and enforceable coordination mechanisms are required to manage such situations."
Another key success factor is to institutionalise cross-border collaboration. The ideal is a strong programme-management unit, established through a special treaty between all the participating countries. Whether based on public or private resources or a mix of the two, it would oversee most of the phases of the programme, and coordinate all the stakeholders.
The relevance and applicability of the various best practices have to be determined on a programme by programme basis. Adopted and applied appropriately, they should remove roadblocks to the implementation of regional infrastructure programmes generally and help make PIDA a reality -- with all the benefits that will bring, such as improved public health, a boost in local prosperity, and greater regional integration.
A copy of the report can be downloaded at www.bcgperspectives.com.
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