The Reference Guide (Public-Private Partnerships;

Reference guide; Version 2.0) defined PPP, as: ‘’A long-term contract between a private

party and a government entity, for providing a public asset or service, in which the private

party bears significant risk and management responsibility, and

remuneration is linked to performance.’’

It needs to deeply understand and

address the three sphere :

Economics, Politics, and Execution

—in an integrated way.

( Ref : IFC ; WBGroup ; 2013 )

Execution

Politics

Economics

Ensure sound economic fundamentals. Structure the partnership to optimize cost, quality,

and investor return—in other words, to achieve both the public policy and business objectives.

Secure political champions. Build stakeholder support.

Assess and manage the key social and environmental impacts.

Foster a stable and supportive regulatory environment.

Use a disciplined approach—time and complexity are your enemies.

Secure a mix of global and local expertise. Support a transparent, competitive bid process. Plan for ongoing contract monitoring and review.

To manage the Projects over their life cycles the Government needs :

To Create a Comprehensive and Prioritized Infrastructure-Investment Plan

To Identify Projects That Are Well-suited for a

PPP by: Training the right people

Developing benchmark databases Developing standardized methodologies

Three crucial steps that governments must take to create the right environment for supporting and driving PPPs :

Establish Rigorous Program Management

Communicate with the Public Early and Often

Ensure the Necessary Public- and Private-Sector Skills

Infrastructure Procurement Routemap Process (Source : Infrastructure procurement routemap: technical note on application ;

Infrastructure UK ; January 2013 ) (http://www.hm-

treasury.gov.uk/iuk_cost_review_index.htm)

Complexity Assessment of the Delivery Environment

Capability Assessment

(Investment and Delivery

Planning )

Capability Assessment (Client and

Supply Chain Appraisal)

Delivery Route Selection and

Implementation

Level 1

(vulnerable)

Level 2

(governed)

Level 3

(assured)

the sponsor should: • Screen and review categories of delivery routes to check for alignment with requirements for a successful outcome and sponsor / asset management capability;

• Verify whether any of the delivery routes have to be ruled out or would require significant organisational

change; • Select a range of preferred delivery routes and

consider what this requires of the delivery organisation; and

• Capture critical issues and capability gaps. Initiate the sponsor enhancement programme.

The key risks :

(a)Construction and Completion Risk (b)Operating Risks (c)Demand Risk

(d)Political and Regulatory Risk and Expropriation or Nationalization Risk (e)Environmental Risk

(f)Social Risk (g)Currency Exchange Risk

(h)Interest Rate Risk

(Sources : http://ppp.worldbank.org/public-private-partnership/financing/risk-allocation-mitigation)

It requires :

•Project feasibility - Technical feasibility

- Legal feasibility - Environmental and social sustainability

•economic viability of the project •Value for money of the PPP

•Fiscal responsibility •Scale of the project

•Opportunities for risk transfer •Market capability and appetite

INCREASING FISCAL

RESOURCES

IMPROVING PUBLIC SECTOR

CAPACITY AND

GOVERNANCE

•Additional sources of funding and financing by increasing the funding available for infrastructure : - Increased revenue from user fees - New revenue streams from greater asset utilization. - overcome short-term cash budget constraints - overcome public sector borrowing constraints.

•Private sector analysis and innovation •Private sector experience and incentives •Long-term investment perspective

Balancing private and public sector interest. Transparency and Investor confidence.

Multi-skilled and experience team. Direct experience in the relevant sector and market.

Ties with the Global Investment community.