Maintaining a level playing field in the market key to attracting PPP investors, say experts

Experts from Greece and Egypt were in Nicosia this week to share their experiences with public-private partnerships (PPPs) and reveal how these special contracts can help an economy thrive; revealing, among other, that maintaining a level playing field in the market – between the public and private sector – is key to attracting investors.

During the “Unlocking investment through Public-Private Partnerships (PPPs) International Summit” that took place in Nicosia this week, Dr Marinos Giannopoulos, CEO, Enterprise Greece and Hossam Heiba, CEO, General Authority for Investment and Free Zones, participated in a panel entitled “Best Case Studies for FDI in Countries with Testimonials from Experts”. They were joined by Andreas Anastasiou, Partner, Strategy and Transactions Services, EY Cyprus, with Atter Hannoura, Director of Central PPP Unit, Ministry of Finance, Egypt, moderating.

Hossam Heiba said Egypt has been working hard to improve its image internationally, achieving significant success – in Africa, the Middle East and Europe. He added that 2024 was a record year for foreign direct investments (FDIs).

And the country’s effort is ongoing, he said, with specific targets in place. “We’ve been working diligently to achieve these goals”.

According to the Egyptian official, the country has been investing hard in infrastructure projects – in addition to streamlining licensing processes, and introducing the ‘Golden Licence’, which reduces the licensing process for largescale projects to just 20 days.

By boosting its PPP structure, and working diligently for the past 14 years to attract investment in PPP structures, it has managed to attract billions of dollars’ worth of projects, said Heiba.

Another important step for Egypt was its work on maintaining a level playing field in the market. “Egypt used to have a very strong foot of the government or public sector in the market,” the CEO explained. “We lifted any privileges given to state-owned enterprises and they are treated equally with the private sector.”

Greece, whose economy was bailed out during the financial crisis, was forced to incorporate PPPs in its national policy by its European and international lenders. And according to Dr Marinos Giannopoulos, PPPs have proved a significant reform in Greece’s approach to infrastructure development.

“Greece currently ranks second globally for its PPP regulatory framework,” said Giannopoulos pointed out. “We have a special secretariat of PPPs in the Ministry of Development overlooking all developments. “

Greece balances its public interest with the private sector’s efficiency, he explained. And Greece has been successful in multiple sectors, including education, airports, hospitality and tourism. Major highroads, waste management facilities – all are developed through PPPs, he said, adding: “I think we have 66 PPPs worth €6.5b on the table currently; 20 have already been contracted.”

As for Cyprus, Andreas Anastasiou said there has not been “as much activity as we would like in Cyprus” on the PPP front.

But the island does have a couple of examples where PPPs have significant boosted the economy and country’s infrastructure.

“The concession contracts for the airports and Limassol port,” he said. The government signed an agreement with operator Hermes Airports back in 2006. “By 2008, we had the upgraded terminal of Pafos Airport, and a year later a brand new Larnaka airport,” Anastasiou pointed out.

The consortium has so far spent €500m on infrastructure alone, with another agreement signed for even more developments, he added.

Similarly, at Limassol port, the concession contract was awarded in 2016, and the investors, including DP World and Eurogate, have so far invested over €160m in infrastructure.

“In both cases there has been an increase in productivity, efficiency, and they did manage to reduce the servicing times,” said Anastasiou before adding: “Not only that, they managed to increase the connectivity of Cyprus. We have new airlines, new routes, new collaborations with cruise lines and for an island economy like Cyprus, this is very important. We’ve seen a significant increase in tourist arrivals. The airports have managed to increase passengers from 5.6 million in 2006, to 12.3 million today.”

It also helped to establish Cyprus as a business center, he added.

“What were the key success factors in this case? I think a key success factor was the fact that we had specialised people participating in the consortiums. DP and Eurogate, in the port, and you also had the local presence. CTC, Iacovou Brothers and so on. All this benefited the timely and efficient completion of the projects.”

A PPP is a partnership, so you need to have a win-win situation, said Anastasiou. “This means, fair allocation of the risk, and fair returns. So the government hands over public asset, at the same time the concessioners have their investors who want to see a return. Another important factor, is flexibility. The airport concessions were signed din 2006, since then we went through the pandemic, disruptions at the ports and airports. Adding the flexibility to adapt to these conditions is very important.”