Economic appraisal of Public Private Partnership arrangements for four fish receiving centers in Sierra Leone
Baio, Andrew and Marr, Ana (2012) Economic appraisal of Public Private Partnership arrangements for four fish receiving centers in Sierra Leone. Project Report. Natural Resources Institute.
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Final_Report-Baio-Marr.pdf - Accepted Version
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[Executive Summary] The fisheries of Sierra Leone is usually subsumed under agriculture but contributes about 10% of GDP which is considerably higher than the African average. Thus, the subsector is generally considered as having the potential to significantly contribute to poverty reduction/societal wellbeing. The artisanal fisheries sector with an annual catch of about 120,000mt is the focus of this investigation. The subsector has been plagued by disorganization and lack of post-harvest infrastructure which meant huge losses either in the form of low prices or outright putrefaction of harvest. As a means of overcoming such problems, the GoSL and ADB conceived and implemented AFDEP which provided fish receiving and processing facilities at Goderich, Tombo, Shenge and Bonthe. This study sets out to gauge the economic viability of these facilities under a PPP arrangement. In carrying-out the study, we examined the ‘Commercial’; ‘Cooperative’ and ‘Hybrid’ options of PPP arrangements concluding after extensive consultation with stakeholders that the ‘Cooperative’ approach fits better in the Sierra Leone context. This is so because under this arrangement, the interests [equity stake and capacity rights] are allocated to participating private sector parties at the time of ‘Shareholders Agreement’ execution and it’s more flexible in terms of upfront cash flow needs on the part of the private sector participants at the time of initial investment. Having undertaken an appraisal of the status quo and needs assessment for additional investment, we compared the cooperative PPP option and a scenario wherein the facilities were run by Government as a ‘service provision outfit’ following the Net Present Value financial cash flow analysis method. The results in Table 6 show huge margin in NPV and annual profit between the ‘PPP’ and ‘service provision’ approaches in favour of the PPP arrangement. We have also specified the range of possible commercial and economic opportunities; examined a business model for the PPP arrangement and discussed the benefits of the PPP and possible impact on communities.
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