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PUBLIC PRIVATE PARTNERSHIPS. Taking a Balanced Look…. PUBLIC PRIVATE PARTNERSHIPS AGENDA. What are PPP transactions Why and When to do them How are they done Some Examples Good and Bad. The Key lessons to remember… Future Outlook for PPPs . PUBLIC PRIVATE PARTNERSHIPS What they are….
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PUBLIC PRIVATE PARTNERSHIPS Taking a Balanced Look…. Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSAGENDA • What are PPP transactions • Why and When to do them • How are they done • Some Examples Good and Bad. • The Key lessons to remember… • Future Outlook for PPPs. Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSWhat they are… • Agreement between Government and the Private Sector for the Provision of a Public Good or Service by the Latter. • Generally but not always involving: • Long Term Contracts • User Charges and/or Payments flowing between the Parties • Shared Investments but Mainly Private • Risk Sharing by the Parties • Must be a Partnership Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSWhat they are… Source: European Commission Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSWhy do them…. • Fiscal Head Room • As a Way of Financing the Project • Separate Policy & Regulation from Operations • Make the Good or Service Available • Pay for Performance and Output • Introduce Competition – For and In the Market Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSWhen to do them…. Source: VikramKutaree – World Bank Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSWhen to do them…. 2 3 Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSHow to do them…. • Project Identification • If it ain’t broke don’t fix it ! • Pre – Feasibility • More than back of the envelope – do this first !! • Go –NoGo here • Public Relations Program – A must ! • Feasibility Study • Only if needed for the RFP • Agree Regulatory Framework • RFP Design • Technical Pass Fail & Selection on Financial bids • Include Draft Contract • Include Surrogate regulations if needed with Phase out. Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSHow to do them…. • Implementation Institutional Arrangements • Preferably before tendering! • Must have Transition Plan • EOI & Tendering • ICB Best for Large Projects • Selection, Negotiations and Contract • Financial Closing • Implement Regulatory Framework Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSExamples – The Good & Not So Good Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSKey lessons to remember… Balance in Private Incentives & Public Interest Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSKey lessons to remember… The Need to Set the Right Priorities Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSKey lessons to remember… Budget Rationale vs.Present Value Test Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSKey lessons to remember… Renegotiation !!! Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPSOUTLOOK Development Equity Associates Inc. Nov. 14, 2012
PUBLIC PRIVATE PARTNERSHIPS THANK YOU Development Equity Associates Inc. Nov. 14, 2012