Governor Babatunde Fashola of Lagos State Tuesday put the estimated amount required for infrastructure development of the state in the next 10 years at $50 billion.
This means that Lagos state requires an annual investment in infrastructure of $5 billion in the next 10 years to attain its vision of a megacity.
The governor revealed this in a speech presented at the 2013 stakeholders’ forum of the Bank Directors Association of Nigeria (BDAN), titled: “Public Private Partnership Innovation in Public Sector Financing,” where he was the guest speaker.
Fashola, however, said the required amount was a far cry from the total amount of the state’s annual budget which he put at about $3.125 billion (N497 billion).
In view of this, the governor pointed out that the state had embraced Public-Private Partnership (PPP) as a strategy for it to bridge its huge infrastructure deficit.
According to Fashola, “PPP allows us to tap into the private sector’s capital and leverage its managerial efficiency,
technology, innovation, entrepreneurial approach and expertise.”
Continuing, Fashola, who was represented by the Commissioner of Finance, Lagos state, Mr. Ayo Gbeleyi said: “The rationale for PPP is improved management of scare resources, better risk allocation and more efficient and cost-effective delivery of public services. In order to institutionalise this policy thrust and further bolster investor confidence, the Lagos State Public Private Partnership Law 2011 as well as the Public Procurement Law 2011 were enacted.
“There are number of good reasons for public sector using PPP to assist to develop its infrastructure. PPP offers both strategic and operational choices to government.
“Strategically, the use of PPP fosters economic growth by developing new commercial opportunities and increasing competition in the provision of public services, thus encouraging crowding-in of private sector or foreign investment.”
Furthermore, he stated that PPP allowed governments to set policy and strategy and where appropriate, to regulate economic activities, while leaving service delivery to the private sector. He also declared that operationally, PPP provided opportunities for efficiency gains (better quality and more cost-effective delivery of services), better asset utilisation and quality, clearer customer focus and accelerated delivery of projects.
“In addition, PPP is an instrument that government can use to reform and restructure certain strategic sectors of the economy to bring in competition, which will increase investment and efficiency, reduce prices and expand the range of services available.
“This has particularly proven to be true in our Independent Power Projects (IPP) and the concession of the operations and maintenance of some of our health facilities,” he added.