What do you know – The Business & Financial Times

… About Public-Private Partnerships (PPPs)?

By Desmond Isaac Addo

Email: [email protected]

 Most of us simply turn on the tap and expect water to flow. We rarely stop to think about everything that has to come together to make that happen.

In recent weeks, many residents in parts of Accra, myself included, have been following news about the Teshie-Nungua Desalination Plant.

For communities like Teshie, Nungua, Sakumono, and Baatsona, this plant was supposed to ease the constant water shortages along the coast. Commissioned in 2015 at a cost of about $126 million, it was built to turn seawater into drinking water and supply thousands of homes. At full capacity, it could produce about 60,000 cubic metres of water a day.

But over the years, the plant keeps making headlines; not for the relief it promised, but for the challenges affecting how it runs.

And naturally, people are asking:

• Why was it set up this way?
  • Why is a private company involved in something as basic as water?
  • And why should disagreements between institutions affect whether water reaches our homes?

The truth is, this plant is not just about water. It is also about how governments today finance and deliver big projects. That model is called a Public-Private Partnership, or PPP.

So, what exactly is a PPP?

A Public-Private Partnership is simply an arrangement where government and private companies work together to deliver a project or service.

Instead of government doing everything alone, it partners with a private investor. The private side brings money, technical expertise, and experience in running projects. Government, on the other hand, provides direction, regulation, and oversight.

Put simply, PPPs allow government to get big projects done faster, using both public authority and private sector strength.

Think of it this way: instead of government trying to raise all the money, hire all the engineers, and manage everything alone, it brings in a partner who already knows how to do it efficiently; and both sides agree on how the costs and responsibilities will be shared.

Around the world, this model has been used to build roads, ports, airports, hospitals, power plants, and water systems.

Usually, the private company invests upfront, builds the project, and runs it for many years, sometimes 20 to 30, so it can recover its money. After that, the project may be handed back to government.

For countries like Ghana, where funding is always limited, this approach can be very useful.

How the Teshie Plant was set up

The Teshie-Nungua Desalination Plant was developed using what is known as a BOOT model; Build, Own, Operate, Transfer.

In simple terms:

• A private company financed the plant
  • The company built and ran it
  • It produced water from the sea
  • That water was sold to Ghana Water Company Limited
  • And then distributed to households

After some years, ownership is expected to return to the state.

In simple terms, the private company does not give the water away for free. It produces the water and expects to be paid by government (through GWCL). So if payments are delayed or disputed, it directly affects the company’s ability, and willingness, to keep operating at full capacity.

At the time, this looked like a smart solution to Accra’s growing water problem. But as we’ve seen, the reality has been more complicated.

So, what went wrong?

The model itself was not the problem. The challenges came from how things played out over time:

• Payment disagreements between the operator and the public utility mainly due to cost and revenue factors
  • Maintenance and technical issues affecting output
  • High cost of desalination, which means the water is expensive to produce. If the price charged does not fully cover these costs, the gap creates financial pressure that builds up over time

Desalination, by nature, uses a lot of energy. So even though the idea is good, the cost can become difficult to sustain over time.

What can we learn from this?

The experience gives us a few important lessons:

1. The numbers must make sense long-term.
   If it costs too much to produce the service, someone will struggle to pay eventually; and that’s where problems start. And when that happens, the problem doesn’t stay on paper; it eventually shows up in our homes.
2. Government must fully understand what it is signing.
   These agreements are complex. Without strong technical and legal knowledge, it’s easy to enter arrangements that become difficult later.
3. Not every solution fits every environment.
   Just because something works elsewhere doesn’t mean it will automatically work here, especially if costs are high.

So, how do we fix it?

Fixing a project like this is not always quick or simple. However, now that there is renewed attention on getting the Teshie-Nungua Desalination Plant back on track, a few practical steps could make a real difference.

First, the payment arrangements need to be sorted out clearly.
If the company supplying the water is not being paid properly or on time, operations will always suffer.

Second, the contract itself may need a second look.
Sometimes, over time, conditions change. Reviewing and adjusting the agreement can help both sides work better together.

Third, maintenance must be taken seriously.
A plant like this cannot run well without consistent technical care and the right resources.

Finally, there must be stronger coordination between all parties involved.
Clear communication and accountability can prevent small issues from becoming big problems.

If handled well, the plant can still deliver on its promise; and even serve as a better example for future projects.

Different ways PPPs are structured

Not all PPPs are the same. Here are a few common types:

BOOT (Build, Own, Operate, Transfer)
The private company builds, owns, and runs the project for a period before handing it over.
Example: Teshie-Nungua Desalination Plant

BOT (Build, Operate, Transfer)
The private partner builds and runs the project, but ownership stays with government.
Example: Tema Port

Joint Ventures
Government and private investors co-own and run the project together.
Example: Takoradi International Company power plant with Volta River Authority

Where governments often get it wrong

Even though PPPs are useful, things can go wrong if they are not handled properly:

• Choosing the wrong projects
  • Getting the financial projections wrong
  • Weak contract negotiations
  • Lack of transparency
  • Poor monitoring after the project starts

In many cases, these mistakes don’t happen because of bad intentions, but because of pressure to deliver projects quickly without fully thinking through the long-term implications.

When this happens, instead of solving problems, PPPs create new ones.

Where the opportunities are

Despite everything, PPPs are still a powerful tool Ghana can use.

There is huge potential in areas like:

• Irrigation in Northern Ghana
  • Storage and transport systems for food
  • Agro-processing for exports
  • Transport systems and rail network
  • Energy and digital infrastructure

If done right, these partnerships can unlock growth and improve everyday life.

The real question

The story of the Teshie-Nungua Desalination Plant shows us something important: behind even the simplest services are complex decisions and partnerships.

PPPs can work. They can deliver real results. But only when they are carefully designed, properly managed, and suited to our reality.

So, the real question is not whether we should use PPPs.

It is whether we are using them well, and managing them even better, for the benefit of our nation.

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