Government has issued guidelines to enhance quality of public sector investment preparation to improve bankability of key infrastructure projects to attract investors
The guidelines, issued by the Ministry of Finance and Economic Planning recently will help the government and implementing agencies to make sound investment decisions in selecting investors for mega infrastructure projects and minimize potential prejudice arising from issuing contracts, which lack evidence of bankability.
Zimbabwe is largely using an Engineering, Procurement, Construction model to finance infrastructure projects, but critics believe most of the deals are coming at a very huge cost as the country cannot adequately fund feasibility studies on its projects.
The guidelines also outline the set of relevant technical approaches and tools for economic, financial and social appraisal of projects, and provide guidance on various stages of the project cycle, including monitoring and evaluation of the projects.
Finance secretary Willard Manungo said even where there was sufficient access to finance, lack of evidence on bankability remained one of the bottlenecks to attract investments.
In coming up with the guidelines, stakeholders in Government and private sector were consulted.
Manungo said infrastructure projects were generally costly and complex, requiring much time to implement, hence the need for guidelines that ensure infrastructure delivery was sustainable, affordable and provide value for money. Also critical was the need for scheduled maintenance to be inculcated as an integral component of infrastructure investment to avoid current experiences where, once constructed, assets were frequently poorly maintained, thereby increasing costs and compromising performance.
“The adoption of these guidelines should enable implementing agencies to efficiently and effectively execute public sector projects, consistent with our national development objectives,” said Manungo .
“There is, therefore, need to strengthen the institutional, technical, and regulatory capacities of the public sector in the way public investments are analysed, selected and included in the budget, as well as how they are implemented, monitored and evaluated.
“Public investment decisions, which typically involve various levels of Government and serve multiple objectives, also require robust coordination mechanisms and should be undertaken on the premise of statistically-based assessments and evidence.”
This, he said was necessary to avoid committing public resources to wasteful “white elephant” projects prior to embarking on their implementation. Last year, Finance and Economic Planning Minister Patrick Chinamasa said most strategic projects in the Zim-Asset have failed to attract investors due to lack of evidence on their bankability.
Minister Chinamasa said a large number of projects in Zim-Asset Strategic Plan did not have feasibility studies, and hence, provide very little information for Government and potential private sector investors to make sound investment decisions.