The executive director of the Maputo Port Development Company (MPDC), Osório Lucas, argued last Wednesday, April 10, that Public-Private Partnerships (PPP) add more value to the port, since they make it possible to expand the infrastructure, contributing to greater efficiency by improving technology and hiring more labour (99% of Mozambicans).
The official was speaking during the workshop on “Public-Private Partnerships (PPP), an engine for growth”, organised by consultants Ernst & Young (EY) and JLA Advogados, which essentially discussed the business model’s opportunities and challenges for economic growth in Mozambique.
“It has been shown that the Public-Private Partnership at the Port of Maputo has added value in that it has increased handling capacity and generated jobs, net revenue for the state and even opportunities for small and medium-sized enterprises (SMEs), as we have a very extensive ecosystem of service providers to the port that, under normal conditions, would not be there if the infrastructure had not reached this level of development,” explained Osório Lucas.
Osório Lucas – executive director of MPDC
The man in charge of the port infrastructure in Maputo revealed that it has generated around 2,000 direct jobs and 10,000 indirect jobs, as well as considerable gains for the state coffers. “In fact, the renewal of the concession by the state should be an indicator that the government considers that there are reasonable gains in the concession,” he said.
“Right now, the biggest challenge is to connect the entire transport ecosystem, so that the port, the road, the railway and the border all work efficiently until they reach the exporter or importer who uses our infrastructure,” Osório Lucas pointed out, adding: “we are working with the various entities involved to develop solutions.”
On the same occasion, Zara Jamal, a partner at JLA Advogados in Mozambique and Abreu Advogados in Portugal – Mozambican and Portuguese law firms that provide their clients with services in various fields of law – explained that the PPP business model has been gaining more ground in the country among companies and public institutions.
“We’ve been advising on some projects in Mozambique, mainly in the private sector, facilitating their interaction with the public sector. What we have seen in relation to other countries where we work is that there is a growing appreciation or appetite for adopting this business model in various sectors. Of course, each sector of activity has its own specificities and it’s no different here.”
Zara explained that there are still a number of challenges in the country when it comes to applying PPPs, but from a legal point of view, “which is our profession, I think Mozambique is on the right track. We obviously need some sophistication in the application of the law, and that’s why we’re here to help investors and local and international players know how to interpret, apply and benefit from it.”
For her part, Mafalda Teixeira de Abreu, a partner at Abreu Advogados in Portugal, explained that, in general, the purpose of PPPs “is the efficient, qualitative and quantitative provision of public services or goods to users, as well as the economic valorisation of property and other national resources integrated into a given enterprise”.
Mafalda Teixeira de Abreu – partner at Abreu Advogados
The source explained that Public-Private Partnerships are a venture carried out in areas of public domain or service provision, in which, by means of a contract and with total or partial financing from the private partner, the latter undertakes to make the necessary investment and to operate the respective activity – the provision of services or goods, the availability of which is guaranteed to users by the state.
For Mafalda Teixeira de Abreu, “the implementation of successful PPPs is necessarily based on carrying out feasibility studies, which will allow the public partner to define the base case and the risk matrix”.
For his part, Carlos Lopes, executive director of EY, believes that “the PPP model can do a lot for Mozambique. There is a clear need and opportunity to bring in the private sector to support infrastructure development in the country,” he said, and then emphasised: “it would be important to have greater clarity at institutional level and an even stronger political will in this direction, to give the market the right confidence. There are clear examples, such as Mphanda Nkuwa, that the country is in a position to attract the best and biggest international investors and financiers”.
Carlos Lopes – executive director of EY
It’s important to note that with PPPs, the government can carry out public works and services with financial advantages, making it possible to control public spending and make investments. They are also used as an innovative form of financing, involving private management and risk sharing.
