Public-Private Partnerships in transport: a critical assessment of the Caribbean

Abstract

PurposeThis article critically analyses the extent to which selected Public-Private Partnerships (PPPs) transportation projects in the Caribbean subregion embrace good practices and how they benefit the public sector.Design/methodology/approachThe article begins with the general rationale of PPPs, leading to a discussion on the specific challenges of the Caribbean subregion and an assessment of certain critical projects. The sample cases include the L F Wade International Airport in Bermuda, the cruise berthing and cargo port redevelopment project in the Cayman Islands, and the Sanger International Airport in Jamaica. There are five aspects to the critical assessment: (a) an evaluation of the type of PPP arrangement used; (b) the legal/policy framework; (c) financial implications; (d) accountability; and (e) miscellaneous data. Desk-based research is conducted as supported by both international and local sources to convey a uniquely local perspective in this under-researched area of scholarship.FindingsPPP frameworks in the Caribbean are improving quickly but remain a work in progress. Jamaica leads the region. Bermuda trails behind. Problems of legal compliance with frameworks and limited market engagement persist, leading to risk management problems.Originality/valueThis article fills a literature gap on critical analysis of individual Caribbean PPP transportation projects. Previous reports, mostly by international organisations, cover regional or sectorial trends. Other sources take a descriptive but not critical approach.

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“…The Caymans have PPP regulation but rely on general procurements for PPPs. Their main PPP port is a 25-year redevelopment PPP contract, a Design-Build-Finance-Operation [5]. Verdant Isle Port Partners, as part of a consortium of four companies led by Carnival and Royal Caribbean, won this contact in 2019 [5].…”

“…Their main PPP port is a 25-year redevelopment PPP contract, a Design-Build-Finance-Operation [5]. Verdant Isle Port Partners, as part of a consortium of four companies led by Carnival and Royal Caribbean, won this contact in 2019 [5]. The project is a contractual PPP, detailing the regime of rights and obligations of the parties.…”

“…The project is a contractual PPP, detailing the regime of rights and obligations of the parties. But the port is a pure PPP, with a "continuous partnership that keeps the public and the private sector partners cooperating through the project tenure" [5].…”

“…Notably, PPP costs must "not exceed 80% of operating revenue and ability to borrow to fund capital expenditure restricted to projects with sufficient expected revenues. Four PPPspecific financial safeguards include: (1) "a sound appraisal underpinning the proposed project" justifying the need for the project; (2) "improved value for money against a conventionally financed alternative" for PPP projects; (3) demonstrating the long-term financial viability of the project; and (4) "an independent opinion [...] from a qualified accountant of good standing on the correct accounting treatment in the Cayman Islands Government's accounts" [5]. There are also administrative bodies to provide training and guidance, as well as to review contracts/awards.…”

“…With regards to the Cayman port, the article notes the timing of the project's start date only requires voluntarily compliance with the Cayman's legal framework. "Thus, compliance relies on the Government's goodwill, rather than the law" [5]. The Cayman Islands, according to the author, appears better prepared than in action.…”