12 November 2012

Rwanda: A Public-Private Venture Will Save Onatracom


The Government move to find a private investment partner to save the sole public transport company from collapsing is timely. This move might revamp ONATRACOM into an efficient and profitable company.

ONATRACOM is a typical example of the inefficiencies in public enterprises. The world over, public enterprises have become synonymous with inefficiency. They suffer from a lack of profit motive and are not too concerned with business performance. Because of this basic attribute many Governments have moved to divest or enter into partnerships with the private sector.

If government gets a private partner, it will help ONATRACOM to run on the principles of business. The move is also a good gesture to encourage the private sector to play a bigger role in the country's development while also facilitating the growth of businesses and offering quality services.

The existence of public enterprises may have been defensible in the early stages of Rwanda's post-war economic reconstruction after the genocide. Back then private enterprises were very few. But today Rwanda boasts of a very vibrant private sector which can partner with public enterprises to deliver better services. The economy has grown and so has the scope of the private sector which generally is more efficient.

In playing a bigger part in the development drive, private businesses should be fully facilitated to venture into investing in public projects.

Such a partnership is characterised by the sharing of investment, risk, responsibility and reward between the government and its private partners. Both the public and the private sector have unique characteristics that provide them with advantages in specific aspects of service or project delivery.

Such a partnership will check the problems of long-standing irregularities and lack of efficiency in the public transport system.

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