The state of public transport in the city of Lusaka has been a source of concern to Government

and the public for a long time. A Zambian company has mooted the idea of coming up with a
Public Private Partnership (PPP) with the Lusaka City Council (LCC) with the aim of
modernising the transport system in the city,
You are a consultant who has been approached by this company requesting you to prepare a
document to be used for the purposes of ‘selling’ the project to potential financiers.
Prepare an information memorandum for the project to be presented to the potential financiers.
Among others it should contain the following:
1.The full business description of the project.
2.Any other sponsors apart from the client company and LCC that could be included to make the
project a success.
3.An analysis of the key risks facing the project and the ways of mitigating the risks.
4.The proposed financing structure and justification for using that particular structure.

MJ7WA0

BusinessFinance

Community Answer
1

Answer +5
About Lusaka:
Lusaka is a capital city of Zambia.Having 1.525 Million people in area of 360 Square
Kilometers. Lusaka is one of the fastest developing city in the African conteinent. The primary
source of Income is Agriculture and Mining Industry.  The common public transport services are
1. Buses
2. MiniBuses
3. Taxis
PPP Model:
The Lusaka Government and Private organisation which is planning to invest will be 50:50
partnership or based on mutual agreement. Public Private Partnership model is collaboration
investment made by Government and Private organization. The main objective is to fund the
project and complete the project on time. PPP Model also focus on profitability also. As the
private organization expects profit on their investment. With this model, Government can
accelerate growth at faster pace in Public transport system. PPP model can deliver the business
efficient way as it focus on profitability also. Private firms can leverage their technical skills,
Funding capacity and in return they will be given the maintenance of the project for a specific
period to get their returns back.
There are various PPP models.
1. Build Operate Transfer
2. Build Operate Lease Transfer
3. Design Build Operate Transfer
4. Lease Develop Operate
5. Operate Maintain Transfer
PPP Model has its own Challenges like coordinating with Govt agencies, managing the risk of
delay of project. execution, over investment etc..
The government can propose the Investment organisations with laying out clearly Request for
Proposal Tender. Once the various organisation comes with a proposal the best proposal which
can benefit to the city can be selected by the Selection committee. The PPP model should clearly
laydown rules and regulation of the execution and legal challenges and conflcting points.