The study was conducted with the aim of exploring the barriers to the adoption of BOT contract systems for infrastructural development of technical universities in Ghana. In an empirical questionnaire survey with professionals and experts in the construction and education sector, the respondents were invited to rate their perception on the barriers to the adoption of the BOT contracts systems. An interview session to satisfy ways of adopting the BOT contracts for infrastructural development in technical universities was conducted with selected professionals. The study revealed that the major barriers to the adoption of the BOT contract system are: delays in approval, corruption, reliability and credit worthiness of entities and expropriation. The study suggested that detailed policy or framework for implementing BOT contracts; proper planning by technical universities; and adequate protection for lenders is required for successful BOT implementation. Therefore there is a need to explore this concept, using adequate policy initiatives, proper measures and support from government to improve on the proper implementation of the BOT contracts in Technical Universities in Ghana.
The BOT contracts system which is a Public Private Partnerships (PPP) approach is growing and evolving globally, as more countries move from state-owned and operated services to the private provision of infrastructure. Since the 1990s, there has been a rapid rise of Public Private Partnerships (PPPs) arrangements across the world. Governments in developing nations are taking advantage and using PPP arrangements to improve delivery of public infrastructure. For example, the private sector is estimated to have invested $750 billion in infrastructure in developing countries between 1990 and 2001 [
Augenblick and Custor [
Mubin and Ghaffar [
According to Adeagbo and Kolawole [
As stated by Ahmed et al. [
The key to a successful implementation of a BOT infrastructure project is an in-depth analysis of all aspects related to economic, environmental, social, political, legal, and financial feasibility of the project. For these reasons, the analysis of project feasibility decision needs a technique to include the qualitative decision, factors that have the strong impact on the project [
Some other key barriers include:
1) Change In Law
According to Wang [
2) Corruption
Corruption is regarded by many companies as an unavoidable fact of life on projects in developing countries. Corruption risk is based on using political, legal, or regulatory leverage to extract additional costs for which no one will ever admit and the project developer can never recoup. It occurs when the government’s officials and representatives solicit or receive an unlawful consideration or commission or exert or utilize any unlawful influence in connection with awarding and agreement to the project developer. This presents the risk of either spending too much money on corrupt officials or spending money in the wrong places or at the wrong times all at the risk of having a government agency turn against the project developer and the project [
3) Delay in Approval
Delay in approval risk means that the central or local government authority does not approve the project-related issues in time or even cancels the already approved ones. Obtaining approvals for a project from a complex web of government agencies and departments, from municipal to central government levels, can be an extremely time-consuming process, delaying entire projects and hurting their financial viability [
4) Expropriation
Expropriation risk occurs when the government expropriates the project without giving reasonable compensation to the project developer and investor, etc. The expropriation can take the form of nationalization of a facility wholesale (rare) or ‘‘creeping’’ expropriation whereby the government changes regulations, taxes, or tariffs after a project is complete to gradually take over the facility and its operating profits (common) [
5) Entities’ Reliability and Credibility
For a BOT project, many entities such as partners, contractors, customers, suppliers, operators, guarantors, lenders, and others, who are parties to agreements with foreign parties, will be involved. The success of a project will hence rely on the reliability and creditworthiness of these entities [
6) Force Majeure
According to public procurement Act, Act 663 [
According to the Asian Development Bank [
The study adopts the survey research design. Purposive sampling was used to solicit information from professionals selected from five Polytechnics that have been transitioned into technical universities in Ghana. The institutions included Takoradi Technical University, Accra Technical University, Kumasi Technical University Koforidua Technical University and Ho Technical University. The study made use of questionnaire which constituted the major tool of the research and an interview session for selected respondents with experience on subject matter. One set of questionnaire was issued out. The questionnaire was issued out to engineers, architects, quantity surveyors and selected professionals in the development offices of the selected Technical University with respect to the objectives of the study. The inclusion of these knowledgeable officers helped the researchers to know the relevant BOT principles that could be applied in the sector. The questions covered barriers to the adoption of BOT contracts for the accelerated infrastructural development in technical universities. Data obtained from the survey was analyzed by Mean Score (MS) rankings. The interview session followed the questionnaire to satisfy the third objective a propos identifying ways of incorporating the BOT contract into the construction procurement system of technical universities in Ghana.
Based on their number of years of experience, it shows that out of (20) respondents representing (100%), the majority of the respondents (6) representing professionals with working experience of both 6 - 10 years and 11 - 15 years making (12) respondents representing 60% as the highest percentage, (5) respondents representing professionals with working experience of 20 years and above as the remaining (3) respondents are professionals with working experience below 5 years. The analysis for
The
From the
BARRIERS TO CLIENT (GOVERNMENT AGENCY) | N | Mean | Ranking |
---|---|---|---|
1) Delays in approval | 20 | 4.85 | 1st |
2) Corruption | 20 | 4.80 | 2nd |
3) Reliability and credit worthiness of entities | 20 | 4.75 | 3rd |
4) Expropriation | 20 | 4.70 | 4th |
5) Change in law | 20 | 4.45 | 5th |
6) Force Majeure | 20 | 4.35 | 6th |
(20) respondents representing delay in approval of government projects agrees with what was found by Wang [
Infrastructure is seen as the necessary condition for growth of technical universities. The paper concludes that the major barriers to the adoption of BOT contracts for infrastructural development of technical universities in Ghana are as follows: delay in approval, corruption, reliability and credit worthiness of entities and expropriation. With the above listed barriers to the adoption of the BOT contracts, governments need to develop the framework for public institutions, particularly technical universities that would contain adequate measures, policies, support and education to reduce delays and corruption and prevent such bad practices that hinders the growth of technical education in Ghana. Technical universities capacity to successfully execute BOT contracts needs to be built up rapidly. The capacity deficit and lack of a framework is seen as the crucial bottleneck for achieving a steady flow of successfully negotiated BOT deals. The fact that the BOT approach is a new, complex, and lengthy way of doing business in a multi-stakeholder institutional arrangement requires that measures are put in place to address the barriers identified in this research.
Adjarko, H., Ayerakwah, H. and Fynn, J. (2018) Barriers to the Adoption of BOT Contracts System for Infrastructural Development of Technical Universities in Ghana. Journal of Building Construction and Planning Research, 6, 103-111. https://doi.org/10.4236/jbcpr.2018.63007