Introduction

The complex physical, technological and economic nature of infrastructure distinguishes it from other productive activities. Therefore, public provision of infrastructure has traditionally been justified on the grounds of recognition of infrastructure’s economic and political importance. Recent literature has made serious charges against the public provision of infrastructure like serious and widespread misallocation of resources, and failures to respond to user demand (Jones 1991, World Bank 1994). Moreover, it is highly criticised by property right, principal agent and public choice theorists.2 There are other problems such as fiscal drain due to underpricing, subsidising and overstaffing, inefficient spending and inadequate maintenance which are common with public provision of infrastructure. These problems not only reduce the efficiency of infrastructure but also widen the gap between revenue and investment in infrastructure, which in turn adds a burden on the treasury and ultimately on tax payers.