Trinidad and Tobago look to public-private partnerships to address infrastructure deficit

While public-private partnerships (PPPs) have been used to finance projects in Trinidad and Tobago since the 1990s, the model formally gained institutional backing in 2011 with the creation of a specific policy unit, known as the PPP Unit, which operates within the Investments Division of the Ministry of Finance. Despite this, unlike other Caribbean countries such as Jamaica, T&T’s PPP framework is relatively underdeveloped and had been largely limited to utilities projects. Although the model is becoming more widespread across a range of sectors, it still lacks a clear regulatory framework.

Policy Development

The PPP Unit is charged with overseeing all government-led PPP initiatives and the National PPP Policy, which was introduced in 2012 and sets out the process by which all projects will be developed. In recent years the government has sought to revise the PPP model, while also exploring the potential for it to be utilised in a number of new sectors. In February 2019 the Caribbean Development Bank (CDB) led a two-day workshop with the aim of determining the priorities for PPP projects moving forward. A research paper was also published by the Central Bank of T&T (CBTT) in August 2019, which assessed the country’s economy and outlined the next steps for the rollout of PPPs. “PPPs have significant potential to address infrastructure deficits in T&T, but have thus far been underutilised,” the report stated.

The most common public-private financing method used in T&T is the build-own-lease-transfer (BOLT) scheme. It permits the private partner to construct and manage its own project, which is leased to the client – the government – before ownership is fully transferred. Conversely, the build-own-operate model allows the developer to retain ownership.

Notable Projects

Since Prime Minister Keith Rowley took office in 2015 the government has undertaken PPP initiatives across a range of sectors. As of January 2019 there were 28 such projects in the pipeline across the country, with seven in the advanced stage, according to the CDB. The projects included the construction of a new wing at the Port of Spain General Hospital, Tobago’s low-income housing projects and the development of a waste-to-energy facility.

One notable project, commissioned in 2016, is the TT$192m ($28.4m) Mahogany Court housing complex, which will contain 160 apartments. The land was provided by the government and the private developer, NH International (Caribbean), absorbed the full cost of the site’s construction. The state agency charged with its execution was the Housing Development Corporation, and the project was its first PPP contract. At the opening of the first stage of the development in June 2019 Edmund Dillon, the minister of housing and urban development, announced that PPP projects in T&T were worth over TT$1bn ($147.7m) in total.

Tobago Policy

The government of Tobago, known as the Tobago House of Assembly (THA), formally adopted a subnational PPP unit under the Division of Finance and Enterprise Development in 2017. However, despite several projects being proposed in 2017 in housing, health care and transport, the majority of PPP initiatives rolled out in recent years are set to benefit the tourism sector. For example, an expansion project at the island’s Arthur Napoleon Raymond Robinson International Airport was is expected to be completed in mid-2021, and three new all-inclusive resorts were proposed in November 2019. However, the rollout of PPPs in Tobago may be impeded by a ruling made by the Court of Appeal in November 2019, which mandated that the THA cannot enter into BOLT agreements without approval from the Ministry of Finance.

Forging Ahead

As the country’s PPP strategy is still relatively nascent, there are a number of steps that need to be taken for the ecosystem to grow. According to the CBTT, in order for the model to become more widespread in the long term, T&T needs a comprehensive and transparent regulatory framework, and a clear understanding of its infrastructure requirements.

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The Report: Trinidad & Tobago 2020

Construction & Real Estate chapter from The Report: Trinidad & Tobago 2020

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