PUBLIC PRIVATE PARTNERSHIP

PUBLIC PRIVATE PARTNERSHIP

Public Private Partnership is In a public and private partnership arrangement, each partner, usually through legally binding contract(s) or some other mechanism, agrees to share responsibilities related to implementation and/oroperationand management of a project. This collaboration or partnership is built on the expertise of each partner that meets clearly defined public needs through the appropriate allocation of:

·           Resources

·           Risks

·           Rewards, and

·           Responsibilities

The allocations of these elements and other aspects of PPP projects such as, details of implementation, termination, obligations, dispute resolution and payment arrangements are negotiated between the parties involved and are documented in written contract agreement(s) signed by them.

What is PPP Unit?

*          A group of PPP specialists assisting the government and the private sector in tackling difficulties in PPP

*          Many countries have shown positive experience and it’s becoming a trend in many countries starting PPP program to set up a PPP unit

*          There are no single design of PPP unit, and all country need to customize the design of PPP unit according to the local context

*          HOWEVER, PPP unit is not a prerequisite nor a guarantee for successful PPP

A PPP unit is any organization designed to:

*          Promote or improve PPPs by trying to attract more of them or by ensuring that PPPs meet such quality criteria as affordability, value for money, and appropriate transfer of risk.

*          Have a lasting mandate to manage multiple PPP transactions, often in multiple sectors. This distinguishes PPP units from PPP teams working in a single ministry or committees created to work on specific transactions.

Brief description of PPP Unit

*          In conducting PPP schemes there is a new demand on government agencies.

*      Capacity to design projects with a package of risks and incentives that makes them attractive to the private sector;

*      Assessment of the cost to tax- payers

*      Contract management skills to oversee

*      Advocacy and outreach skills to build consensus on the role of PPPs

*      Develop a broad program across different sectors and levels of government.

*          PPP units play important roles in several countries (e.g., Australia, UK and South Korea) that are successfully conducting PPP program

*          A PPP unit is any organization designed to

*      Promote or improve PPPs by trying to attract more of them or by ensuring that PPPs meet such quality criteria as affordability, value for money, and appropriate transfer of risk.

*      Have a lasting mandate to manage multiple PPP transactions, often in multiple sectors.

*          In principle, the role of PPP unit is to remove obstacles to PPP programs both in government and private sector

*          In principle, the role of PPP unit is to remove obstacles to PPP programs both in government and private sector

Role of PPP Unit

1.        Policy advisory

•       Macroeconomic aspect

•       Government support

•       Accounting and monitoring

2.        Technical assistance

•       Project selection and development

•       Standardized documents

•       Negotiation

•       Ex-post management

3.        Investment promotion

•       Conference

•       Road show

4.        Research

•       International best practice

•       Review of previous transactions

5.        Capacity building

•       Line ministries

•       Local governments

•       Private sector

Staffing of PPP Unit

·           Staffs are PPP specialists who are familiar with the public and private practice together

·           The staffs includes economist, finance specialist, accountants, lawyers, as well as engineers in all sectors covered by PPP law

·            If the unit is located within the government, the payment level sometime becomes issue.  High turn over rate of PPP staffs can emerge as an issue after the Unit becomes fully operational

A successful PPP unit

·           A successful PPP unit is one that contributes to a successful PPP program

·           A successful PPP program is one that fosters successive PPP transactions that

·       Provide the services the government needs.

·      Offer value for money as measured against public provision of services (with value for money measured by the net present value of lifetime costs, including the cost of bearing risk).

·      Comply with general standards of good governance and with such policies as avoiding corruption, being fiscally prudent, and complying with relevant legal and regulatory regimes.