Effect of Public-Private
Partnership Policy on
Affordability of Housing in Federal Capital Territory
By:
AKPANENANG Ndudi
Precious
Department
of Public Administration,
Nasarawa
State University, Keffi
Oz_b2001@yahoo.com
08034537208
And
Prof. JAMES A.
Ojobo,
Department of Public
Administration,
Nasarawa State
University, Keffi
Email: johbrass@yahoo.com
Tel: 08068319132
Abstract
The study
investigated the effect of public-private partnership policy on the delivery of
affordable housing in the Federal Capital Territory, Abuja-Nigeria. Also, other
objectives include examining the impact of management contracts on the delivery
of affordable housing in Nigeria and identifying the effect of joint ventures
on the delivery of affordable housing in Nigeria. The study adopted a survey
research design, and a structured questionnaire was used as an instrument for
data collection. Data were analysed using descriptive statistics of percentages
as well as chi-square analysis. The results showed that there is a significant
effect of management on the delivery of affordable housing in FCT, and there is
a positive effect of joint ventures on the delivery of affordable housing in
FCT. The study concludes that for public-private partnership policy to prosper
and achieve these objectives, any partnership must establish metrics for
success, be able to quantify and track their accomplishments and be able to
identify and address emerging problems. It was recommended that given the
positive impact of management contracts and joint ventures on the delivery of
affordable housing in FCT, housing developers and policymakers should encourage
their use in future projects, as this could be done through incentives such as
tax breaks or streamlined approval processes.
Keywords: Affordable
Housing, Delivery, Joint Venture, Management Contract, Public–Private
Partnership
Introduction
Housing, as a basic human necessity, is one of
the services that governments throughout the world have struggled to provide.
On this note, Nigeria's housing shortage highlights the need to involve private
finance efforts in addressing the country's housing difficulties. Housing,
according to the United Nations and the World Bank (2019), is a fundamental
need that assists individuals in achieving self-actualization according to
Maslow's Hierarchy of Needs. Housing is prominently included among essential
requirements such as food and clothes, and as such, its significance cannot be
overstated. Housing evolution as a strategic invention and tool also marks
humankind's evolution in management, social stratification, and the creation of
value, as evidenced by the progression of leaving rudimentary dwellings before
learning to build an improved shelter for protection from the vagaries of
socio-environmental conditions, including the desire for solitude.
According to Izuwah (2019) and Woetzel et al.
(2018), these shelters evolved from basic wood and brick structures into
standalone houses and eventually into the modern-day architectural wonders of
today. The Centre for Affordable Housing Finance (2019) and Oosterveer (2019)
have noted that the shortage of housing is a global problem that only differs in
population and jurisdiction. As far as housing and infrastructure provision
goes, Nigeria has two main levels of intervention: the private sector, which is
driven by economic indices, and the public sector, which is driven by
government interventions targeted at providing mass housing for low- and
middle-income families that are typically unable to afford housing based on
their income.
Given the backdrop of Nigeria’s challenging
macroeconomic environment, UNCTAD (2019) has noted that Nigeria’s
administrative experience in recent times has consisted of overdependence on
government earnings from oil and foreign borrowings as the major source of
finance (evident in the growing fiscal deficit, interest rate volatility, and
social instability that ensue occasionally, with implications for poor
infrastructural development and slow economic growth and development).
Dominic
et al. (2016), public-private partnership as a practice is making its impact on
the Nigerian landscape. The growth of public-private partnerships is linked to
the insufficient funds available to the government for financing numerous
development projects (including housing) as well as the government's poor risk
management capacity. The noted challenges to government financing and its
impact on the nation’s development have increased the prospects of public-private
partnership policy as an alternative to the delivery of infrastructure and
housing.
Statement
of the Study
The
push for public-private partnerships implies a willingness of private resources
to be spent in addressing fundamental socioeconomic concerns such as housing.
As a result, the Federal Capital Territory has been unable to deliver and
implement Public-Private Partnerships (PPPs). This study therefore examined the
effect of public-private partnership policy on the affordability of housing in
the Federal Capital Territory, Nigeria.
Objectives
of the Study
a.
Ascertain the effect of management contracts
on the delivery of affordable housing in the Federal Capital Territory
b.
Identify the effect of joint ventures on the
delivery of affordable housing in the Federal Capital Territory
Research
Questions
a. What are the effects of management contacts on the delivery of
affordable housing in the Federal Capital Territory, Abuja-Nigeria?
b. How do we identify the effect of joint ventures on the delivery
of affordable housing in the Federal Capital Territory, Abuja-Nigeria?
Literature Review and Conceptual Clarifications
Concept of Public-Private Partnership
Dominic (2016) defines a
public-private partnership as “a long-term contract, to which a private sector
party often agrees with a public entity to design and build, expand, or upgrade
the public sector facilities; take up significant monetary, technical, and
operational risks; receive a monetary benefit during the life of the contract
from users or the public sector, or a combination of the two; and usually
return the facility to public ownership at contract closure”.
Kadiri (2018) viewed PPP
as long-term contracts for the support and organisation of all stakeholder
interests and project processes throughout the lifespan of a developmental
project. This implies that effective collaborations cannot take place in short-term
contracts, and PPP interventions would only flourish in environments with
synchronised operations and well-governed organisational structures.
Consequently, effective
PPP policy enables accessibility to key resources that may be practically
unavailable or inadequate for certain partners to deliver a public service
mandate (Alinaitwe and Ayesiga, 2013). However, critics of PPP argue that,
though governments recognise the need for mutual commitment and cooperation in
their PPP policy documents, in practice, PPPs are always transformed into
‘contracting out schemes’ since private partners are rarely allowed to innovate
beyond the explicit contract provisions (Alinaitwe and Ayesiga 2013).
The
main goal of the supportive approach via government is to increase the
efficiency and effectiveness of the housing sector by allowing the public
sector to focus on providing legal, regulatory, and funding frameworks and
support to ensure that private sector organisations participate effectively in
actual construction and management. This approach aims to address the housing
needs of the formal and informal sectors, as research shows that previous PPP
endeavours were concentrated in the formal sector, while key needs remain in
the informal sector.
Management Contract
Akintoye and
Kumaraswamy (2016) defined
a management contract as a contract governing a public-private partnership
(PPP) agreement. The management contract extends the services to be outsourced
to include part or all of the management and operation of public services
(i.e., utilities, hospitals, port authorities, etc.). Mostly, private sector
participation is obtained through this method to get the services. Under this
method, the government institutions undertake their responsibility in providing
the relevant service by continuously investing in it, and the private sector
gets involved by way of short-term or long-term contractual agreements only for
the implementation of providing and maintaining such services. (Infrastructure
Concession Regulatory Commission, 2012)
Although the ultimate obligation to provide
services is still in the public sector, daily management control and authority
are still assigned to private partners or contractors. In most cases, the
private partner provides working capital but not investment capital. Management
contracts are often for specific tasks and inputs rather than output-oriented
(World Bank, 2018).
A predetermined rate of payment is made to the
private sector for labour and other anticipated operating costs. To incentivize
performance improvement, additional costs were paid to contractors to achieve
pre-specified goals. Alternatively, a portion of the profit can be paid to the
management contractor. The public sector must retain major capital investments,
especially those related to the expansion or substantial improvement of the
system, Contracts can specify discrete activities funded by the private sector,
and they usually interact with customers. The public sector is, however,
responsible for determining tariffs. Management contracts usually upgrade the
company's financial systems, while management decisions about schedules may be
made on purely commercial terms, as per the World Bank (2018).
Joint Ventures
Akintoye and
Kumaraswamy (2016) defined
a joint venture as a partnership in which public and private sector partners
pool their resources, finances, and expertise under joint management to
incentivize long-term growth and mutual benefits. The level of ownership of the
shares will vary depending on whether the public sector is trying to get the
project off the balance sheet or whether the public sector wants to retain
management control of the utility company.
However, even if the government transfers most
of the shares in the entity to the private sector, there are ways to allow the
government to control and even have veto power over certain management issues.
For strategic reasons, the public sector will usually (at least initially)
maintain control of the entity, especially if the joint venture company owns
assets. However, the private sector will want to ensure that it can manage
entities and will therefore need to have veto power or weighted voting power on
sensitive matters (World Bank, 2019).
In a joint venture, the public sector takes on
the position of the regulator as well as being a shareholder in the PPP
operating company (Akintoye and Kumaraswamy, 2016). From this position, it may share the profits
of the operating company and help ensure broad political acceptance from
stakeholders in the project. Private sector partners are usually mainly
responsible for performing daily management operations.
The government must assume the responsibility
to ensure that appropriate and affordable infrastructure services are provided
to all citizens. Whether they assume the responsibilities of providers,
partners, or regulators depends on government needs, constraints, and
capabilities. Owolabi et al. (2019) and Akintoye & Kumaraswamy (2016)
Why PPP Could Be an Effective Tool for
Affordable Housing
Housing affordability refers to the ease with
which individuals or families can access and maintain suitable housing without
incurring excessive financial burden. The relationship between housing costs
(such as rent or mortgage payments) and household income typically determines
it.
For the public sector seeking to increase the
supply of affordable housing, partnerships with private sector organisations
have the potential to increase the resources, funding, and expertise available
to the project and enable the project to reach more target families. Although
research on this topic is limited, there are many reasons to believe that
partnerships provide a way forward for the provision and management of
affordable housing (Bielenberg et al., 2016; Chan, 2018). Partnerships may not
always be the solution of choice, but alternatives worth considering can help
address affordable housing needs. The following explains the basic principles
of using PPP as a project delivery mechanism.
Increase in Efficiency Gains
Efficiency improvement is the main source of
sustainable public savings and therefore the main goal and reason for PPP
(Clegg, 2018). PPP can improve the efficiency of affordable housing by bundling
maintenance and operation with the construction of housing projects.
Since private partners are responsible for the
construction, operation, and maintenance of the project, the incentives for
sustainable construction, efficient maintenance, and operation are consistent.
PPP can also provide a strong incentive to
complete the project as soon as possible because if users can be charged early,
profits will increase. Under traditional public supply conditions, there are
usually no (or weaker) incentives, according to the International Monetary Fund
(2019). Most governments make PPP decisions based on higher efficiency.
In addition, competition among bidders
(including feedback) and negotiation in the procurement process, innovation and
management skills in the private sector, and reduction of administrative costs
are discussed by Kadiri (2018) and Kavishe and Chileshe (2020). By integrating
operations into partnerships, design, material, and construction costs and
operational considerations can be further optimised, which can often greatly
reduce procurement and life cycle costs.
PPP as a means of Protecting the Public
Interest
Under public-private partnership structures,
the public sector retains asset ownership and can implement the provision of
affordable housing by utilising contracts to control prices as well as other
variables. According to Olugbenga et al. (2019), this provides a single point
of contact for public partners to solve the problem of affordable housing
delivery and strengthen control of the delivery process, as well as reduce risk
and complexity. Sheppard & Beck (2016)
Public partners do not have to make multiple
decisions and coordinate multiple aspects of management (labour, technology,
budget, etc.) to solve problems; public partners only need to inform the
private partner of the problem and then monitor the behaviour of the private
partner to ensure compliance or resolution (Oosterveer, 2019).
Vallee (2018), to conduct due diligence, a
detailed PPP contract will contain provisions for regular monitoring of the
compliance of private partners. By providing a feedback loop between goals and
performance that is not shrouded in conflicts of interest, the monitoring and
evaluation mechanism helps to improve control.
This mechanism is not necessarily established
in the public housing system, under the erroneous assumption that public
authorities have the expertise to monitor themselves. As a final choice and
proof of final control, if the private sector partner fails to fulfil its
contractual obligations and breaches the contract, the contract can be
terminated, and the old service provider will be replaced by a new service
provider, Oshodi (2018) and Sheppard & Beck (2016).
Empirical
Review of the Previous Studies
In Owotemu, Daniel, and
Abubakar's (2022) study, the researchers evaluated the management of
public-private partnerships (PPP) for affordable housing in Nigeria. They
investigated the impact of these partnerships on affordable housing and
examined the effects of management contracts and joint ventures on housing
provision. The study used a survey research approach with structured
questionnaires for data collection and employed various data analysis methods,
including descriptive statistics, correlation, and regression analysis. The
findings indicated that the build-own-operate-transfer policy had a significant
positive impact on affordable housing, while lease contracts also had a
positive effect. The study concluded that successful PPPs for affordable
housing require clear success metrics, performance monitoring, and addressing
emerging issues. Recommendations included the government's role in providing
infrastructure, creating an enabling environment, and establishing a viability
gap funding framework to attract private sector participation for effective
affordable housing PPPs in Nigeria.
Ahmed, Sipan, and Hashim
(2020) conducted a study to evaluate the measurement model of the PPP problem
and success factors for public-private partnerships in affordable housing
provision in Abuja. They used interviews and questionnaires to gather information
from experts and respondents. Their analysis revealed that project economic
viability, an adequate legal framework, an effective procurement process, a
strong private sector, a sound financial package, and government control are
critical success factors for housing projects in Abuja. They recommend
government policies and subsidies to support PPPs for affordable housing.
Udoka (2022) assessed
the effectiveness of public-private partnerships in housing delivery in Akwa
Ibom State, Nigeria. The study aimed to determine the extent of PPP adoption
and its effectiveness in addressing the housing delivery deficit. The research
found that PPP schemes were not very effective in delivering housing units to
urban residents in Akwa Ibom State, and the extent of PPP development was low.
The study concluded that the effectiveness of PPP schemes in tackling housing
delivery in the state was minimal.
Oshodi (2018) evaluated
the effectiveness of the PPP model on housing delivery using three selected
housing agencies in Lagos State. The study included a survey of agency staff
and found that there is a difference in staff perceptions of the government's
intention to adopt the PPP model. The results also indicated a significant
impact of effective PPP model usage on housing delivery. The study recommended
the promotion of other PPP models and innovative processes for private sector
involvement in housing projects in Lagos State. It also suggested improving
housing project delivery processes using less commonly used PPP models.
The literature reviewed
highlights a notable research gap concerning the impact of public-private
partnership (PPP) policies on housing affordability in Nigeria's Federal
Capital Territory (FCT). While previous studies have explored the effectiveness
of PPPs in housing delivery across different Nigerian states, there is a lack
of research that specifically investigates how PPP policies influence housing
affordability in the FCT
Theoretical Framework: New Public Service
Theory
The new public service theory postulated by Denhardt Janet Vinzant
(1980) is
considered most suitable for the study because the theory has relevance to
public service provision in terms of complying with public interests through
collaborative relationships, shared responsibilities, a common understanding of
public issues, and the active involvement of citizens in government activities
(Robinson, 2015). New public service practices ensure that PPPs meet the
collective public interests since public servants are given the mandate to
develop innovative ways of consolidating civilian participation in providing
solutions to community challenges.
The bureaucrats are expected to pursue the
implementation of the PPP policy through brokering, negotiation, and resolving
complex service delivery problems in partnership with the citizens.
Furthermore, the accountability of public servants extends beyond elected
officials to incorporate other public sector stakeholders (Robinson, 2015).
There is transparency in the New Public Service (NPS) Theory, as the key role
of government is to provide an environment in which PPPs can address society’s
service delivery needs through dialogue, open, flexible, accountable,
accessible, and transparent means and structures.
The basic assumptions of New Public Service
Theory include:
i.
The assumption that
governance is not solely the responsibility of government but involves a
network of actors, including public, private, and nonprofit organisations,
working together to achieve common goals
ii. The goal of public governance is to create public value, which
may include economic, social, and environmental outcomes.
iii. There is an emphasis on involving citizens in decision-making
processes and public service delivery, as well as the recognition that citizens
are co-producers of public value.
Applying the principles of the New Public
Service Theory to the study, enhanced a comprehensive understanding of how the
public-private partnership policy affects the affordability of housing in the
Federal Capital Territory, with a focus on collaboration, citizen-centred
outcomes, ethical considerations, and capacity-building. This approach helped
identify areas for improvement and develop recommendations for more effective
and inclusive housing policies.
Methodology
In this study, the researchers employ a
cross-sectional design. Izuwah (2019) the
cross-sectional design is suitable since there are no real experiments carried
out with human beings, who are the study subjects in this case. The suitability
of the design is also seen in the fact that it involved taking a sample of elements
from a population of interest that was measured at a single point in time. The
survey instruments, such as the questionnaire and interview, were designed in
such a way that meaningful results could be achieved.
The population of this study consists of
management staff of the Federal Capital Territory Administration; Statelite
Towns Development Agency; and the Abuja Metropolitan Management Council (AMMC)
as well as the occupants of five selected low- and medium-income housing
estates in the Federal Capital Territory, Abuja. The sample frame for the
housing units consists of 1443 completed and occupied housing units in five
public housing estates developed between 2010 and 2020, which were constructed
through the PPP arrangement. The research instrument used for this study is a
structured questionnaire. In the design of the questionnaire, a five-point
Likert scale format was used. The questionnaire was distributed to the
respondents from the selected sample.
Data Presentations and Analysis
|
S/N |
Selected Housing Estates |
No of Houses |
|
1. |
EFAB Housing
Estate, Gwarinpa I |
242 |
|
2. |
River Park Housing
Estate, Lugbe |
323 |
|
3. |
Mbora Housing
Estate, Airport Road |
268 |
|
4. |
ADKAN Housing
Estate, Galadimawa |
338 |
|
5. |
Bentell Villa
Housing Estate, Gaduwa |
222 |
|
6. |
Staff of FCTA |
50 |
|
|
Total |
1443 |
Source: Field Survey, 2023
The
population consisted of 1443 housing units, selected from occupied housing
units in the five estates. To determine the sample size of the study, the
researcher will employ the use of Yamani (1967) sample size determination formula
as given below;
Results and Discussions
What is the effect
of management contracts on the provision of affordable housing in the Federal
Capital Territory?
Table 1: Responses
on whether management contracts have positively influenced the delivery of
affordable housing in the Federal Capital Territory
|
Responses/ Opinion |
Frequency |
Percentage (%) |
|
Strongly Agree Agree Strongly
Disagree Disagree Undecided Total |
68 105 46 63 31 313 |
21.7 33.5 14.7 20.1 10 100 |
Sources: Field Survey, 2023
Responses on
whether management contracts have positively influenced the delivery of
affordable housing in the Federal Capital Territory revealed 68(21.7%) of the
respondents strongly agreed, 105(33.5%) indicated agreed while 46(14.7%) of the
respondents strongly disagreed and 63(20.1%) indicates disagreed also 31(10%)
of the respondents were undecided as regard whether management contracts have
positively influenced the delivery of affordable housing in the Federal Capital
Territory.
Table 2: Responses
on advantages of using management contracts for affordable housing projects in
the Federal Capital Territory
|
Responses/opinion |
Frequency |
Percentage (%) |
|
Cost-effectiveness
Efficient project management Access to specialized expertise Improved maintenance and service delivery I have no idea Total |
58 118 50 67 20 313 |
18.5 37.7 16 21.4 6.3 100 |
Sources: Field Survey, 2023
Responses on the advantages
of using management contracts for affordable housing projects in the Federal
Capital Territory revealed 58(18.5%)
of the respondents indicated cost-effectiveness, 118(37.7%) indicate Efficient project
management while 50(16%) of the
respondents Access to specialized expertise also 67(21.4%) indicates Improved
maintenance and service delivery and 20(6.3%) of the
respondents indicated they have no idea as regard advantages of
using management contracts for affordable housing projects in the Federal
Capital Territory.
How do joint ventures influence the
delivery of affordable housing in the Federal Capital Territory?
Table 3: responses on
whether in a joint venture, the public sector takes on the position of
regulator as well as being a shareholder in the PPP housing affordability.
|
Responses/ Opinion |
Frequency |
Percentage (%) |
|
Strongly Agree Agree Strongly
Disagree Disagree Undecided Total |
52 131 48 65 17 313 |
16.6 41.8 15.3 20.7 5.4 100 |
Sources: Field Survey, 2023
Responses on
whether in a joint venture, the public sector takes on the position of
regulator as well as being a shareholder in the PPP housing affordability
revealed 52(16.6%) of the respondents strongly agreed, 131(41.8%) indicate
agreed while 48(15.3%) of the respondents strongly disagreed and 65(20.7%)
indicates disagreed also 17(5.4%) of the respondents were undecided as whether in a joint venture, the public sector takes on
the position of regulator as well as being a shareholder in the PPP housing
affordability.
Table 4:
Responses on the main advantages of using joint ventures for affordable housing
projects in the Federal Capital Territory
|
Responses/opinion |
Frequency |
Percentage (%) |
|
Access to
additional funding sources Shared risk and
reward Access to
specialized expertise Improved
project management Undecided Total |
81 113 39 53 27 313 |
25.8 36.1 12.5 16.9 8.6 100 |
Sources: Field Survey, 2023
Responses on
the main advantages of using joint ventures for affordable housing projects in
the Federal Capital Territory revealed 81(25.8%) of the respondents
indicated Access to additional funding sources, 113(36.1%) indicated Shared
risk and reward while 39(12.5%) of the respondents indicated Access to
specialized expertise and 53(16.9%) indicates Improved project management also
27(8.6%) of the respondents were undecided on the main advantages of using joint ventures for affordable housing
projects in the Federal Capital Territory.
Test of Hypothesis
Table
5: H01: There is no significant effect of management contracts on
the delivery of affordable housing in the Federal Capital Territory
|
Responses |
O |
E |
O
– E |
(O
– E)2 |
(O – E)2/E |
|
Strongly Agreed Agreed Strongly Disagreed Disagreed Undecided Total |
68 105 46 63 31 313 |
62.6 62.6 62.6 62.6 62.6 313 |
5.4 42.4 -16.6 0.4 -31.6 |
29.16 1,797.76 - 275.56 0.16 -998.56 |
0.47 28.72 - 4.40 0.00 - 15.95 8.84 |
Decision Rule
From the
computation above it is seen that the X2 calculated is greater than the
X2 tabulated (8.84 > 5.991) the null Hypothesis (H0) is therefore
rejected and the alternative Hypothesis (Hi) is accepted which states that
there is a significant effect of management contracts on the delivery of
affordable housing in Federal Capital Territory.
Table
6: H02: There is no
significant effect of Joint venture on the delivery of affordable housing in the
Federal Capital Territory
|
Responses |
O |
E |
O
– E |
(O
– E)2 |
(O – E)2/E |
|
Strongly Agreed Agreed Strongly Disagreed Disagreed Undecided Total |
52 131 48 65 17 313 |
62.6 62.6 62.6 62.6 62.6 313 |
-10.6 68.4 -14.6 2.4 -45.6 |
-112.36 4678.56 -213.16 5.76 -2079.36 |
-1.79 74.74 -0.34 0.00 - 33.21 39.4 |
Decision Rule
From the
computation above it is seen that the X2 calculated is greater than the
X2 tabulated (39.4 > 5.991) the null Hypothesis (H0) is therefore
rejected and the alternative Hypothesis (Hi) is accepted which states that there is a significant effect
of Joint venture on the delivery of affordable housing in Federal Capital
Territory.
Summary of the findings
The finding
revealed there is a significant effect of management contracts on the delivery
of affordable housing in the Federal Capital Territory; also there is a significant effect
of Joint ventures on the delivery of affordable housing in the Federal Capital
Territory.
Discussion of Findings
Based
on the findings that a significant effect of management contracts existed on
the delivery of affordable housing in the Federal Capital Territory, we can
discuss the implications of this result:
The
use of management contracts has been shown to have a significant positive
effect on the delivery of affordable housing in the Federal Capital Territory.
This could be attributed to factors such as efficient project management,
access to specialised expertise, and improved maintenance and service delivery.
The
finding revealed that using management contracts for affordable housing
projects is cost-effective. By outsourcing certain tasks to a management
company, housing developers can focus on their core competencies while still
ensuring the timely and efficient delivery of affordable housing units.
Management
contracts allow for better project management, as the responsibilities and
tasks are clearly defined in the contract. This can help in streamlining the
construction process, ensuring that the project stays on schedule and within
budget.
By
partnering with a management company, housing developers can gain access to
specialised expertise in areas such as construction, finance, and marketing.
This can help in overcoming challenges and ensuring the successful delivery of
affordable housing units.
While
management contracts have shown significant benefits, there are also challenges
and drawbacks associated with their use. These may include potential conflicts
of interest, a lack of transparency in contract selection, and limited
community involvement in decision-making.
Similarly,
if there is a significant effect of joint ventures on the delivery of
affordable housing in the Federal Capital Territory, we can again discuss the
following findings:
Positive
impact on delivery: The use of joint ventures has been shown to have a
significant positive effect on the delivery of affordable housing in the
Federal Capital Territory. This could be attributed to factors such as access
to additional funding sources, shared risk and reward, and improved project
management.
One
of the main advantages of using joint ventures for affordable housing projects
is access to additional funding sources. This can help in overcoming financial
constraints and ensuring the successful delivery of affordable housing units.
Joint
ventures allow for the sharing of risks and rewards between the participating
parties. This can help in incentivizing all parties to work towards the
successful delivery of affordable housing units. By pooling resources and
expertise, joint ventures can lead to improved project management. This can
help in streamlining the construction process, ensuring that the project stays
on schedule and within budget. While joint ventures have shown significant
benefits, there are also challenges and drawbacks associated with their use.
These may include potential conflicts of interest, difficulty managing multiple
stakeholders, and limited community involvement in decision-making.
Conclusion and Recommendations
Many developed and developing countries, as
well as international organisations like the World Bank and UN-Habitat, believe
that public-private partnership (PPP) policies hold promise in addressing
infrastructure and housing inadequacies. However, the effective design and
implementation of such policies remain challenging. Research indicates the
importance of evaluating these partnerships based on specific criteria to
enhance the collaborative delivery of affordable housing. Organisations enter
partnerships for various reasons, including improving efficiency, increasing
stability, or gaining control over other entities. To ensure the success of
these partnerships, they must establish measurable success metrics, track their
progress, and address emerging issues. The study suggests that there is
potential for successful PPP in providing affordable housing in the FCT
(Federal Capital Territory), but local constraints limit its effectiveness. To
reduce the affordable housing deficit in the FCT, addressing these constraints,
focusing on monitoring, ensuring good governance and coordination among
relevant institutions and sectors, and involving relevant stakeholders at
appropriate levels are crucial.
Based on the significant effect of management
contracts and joint ventures on the delivery of affordable housing in the
Federal Capital Territory, the following are recommended:
i.
Housing developers and policymakers
should encourage the use of management contracts and joint ventures. Given the
positive effect of management contracts and joint ventures on the delivery of
affordable housing, it is recommended that housing developers and policymakers
encourage their use in future projects. This could be done through incentives
such as tax breaks or streamlined approval processes.
ii. They should ensure transparency and community involvement. To
address the challenges and drawbacks associated with the use of management
contracts and joint ventures, it is recommended that housing developers and
policymakers ensure transparency in contract selection and involve the
community in decision-making. This could be done through public consultations,
community engagement sessions, and regular progress updates.
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