Bahamas ranked 51 on enabling PPPs in infrastructure
The Bahamas has been pegged as an emerging market for enabling public-private partnerships (PPP) in infrastructure, by forecasting and advisory services firm the Economist Intelligence Unit (EIU), ranking 51 overall on the index where 100 is best.
In the EIU’s report on PPP readiness and capacity building, where the project life cycle is broken into five components, The Bahamas ranks 51 in enabling laws and regulations, 35 in terms of its institutional framework, 52 in terms of its operational maturity, 83 in the investment and business climate component, and 34 for financing facilities for infrastructure projects.
Under the subheading “Main challenges in terms of PPP (infrastructure) development”, the EIU study explains that one of the first major hurdles that needs to be overcome in countries looking at PPPs is the development of capital markets and increased “participation of commercial banks and institutional investors, both domestic and foreign”.
This has traditionally been a hurdle in The Bahamas, as banks have taken a conservative stance to commercial loans.
“This will require further regulatory and institutional reforms as well as the adoption of modern practices in terms of risk allocation in contracts that meet international standards,” the report notes in its breakdown of Brazil’s PPP climate.
“The second challenge is associated with the development of technical capacity required to appraise and structure PPPs at the local level. Increased leadership by subnational governments associated with the diversification of PPP contracts has highlighted the complexities of the PPP project cycle, particularly in new sectors, for which most local governments are not yet prepared. Furthermore, transparency and accountability standards for PPPs must be further developed in order to shield the mechanism against the kind of corruption cases that affected the infrastructure market in 2016. Otherwise the procurement process will become less competitive and value for money will be challenging to achieve.”
In the Latin America and Caribbean (LATAM) region where the regional score for PPP advancement is 61, The Bahamas ranks 17 of 21 countries. Chile tops the list with a score of 80, while The Bahamas’ closest geographical neighbor on the list, Jamaica, holds a score of 74.
“This document is the fifth edition of an informational tool and benchmarking index that assesses the capacity of countries in Latin America and the Caribbean to carry out sustainable public-private partnerships (PPPs) in infrastructure,” the report states.
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