Public Policy Issues in PPP. Proinversion and World Bank

Transcription

1 Public Plicy Issues in PPP Prinversin and Wrld Bank

2 Requirements f a PPP Prgram 1. Overall Prgram requirements. A. Legislative framewrk. B. Central agency leadership: Finance r treasury r PM r President. C. Single prcurement agency. Clear pwers. Plitical independence. Expertise in decisin making. Lw turnver. D. Access t external expertise - technical, legal, financial.

3 Requirements fr a PPP Prgram E. Transparent, credible prcess. Mre bidders, better prices. F. Planning requirements. Early engagement. Ruthless fcus n utcmes nt mechanisms. G. Stakehlder engagement Unins Unin pensin funds. Opinin leaders Academics Media

4 Requirements fr a PPP Prgram H. Smart Planning Early Wins (BF in Ontari) Public wnership f the asset 5 principles Prtecting existing jbs Unin supprt (neutrality) Language can matter, PPP vs. AFP vs. Sustainable Infrastructure Public pinin survey

5 Requirements fr a PPP Prject A. Cmpetitive marketplace? Is there technical ability in marketplace? Are there lcal cmpanies capable? Cnsider BF training? What is financial appetite lcally? Investr knwledge? Lenders Market tur? See Israel example. Banks vs bnds. Lifec's Equity players Pensin funds f unins Lcal cntent requirements.

6 Requirements f a PPP Prject B. Planning cycle and plitical stability Nn-plitical prcess: Technical assessment Value fr mney Chice f winning bidder Plitical chices: Supprt f a P3 prgram Creating cmmunity/public supprt Chice f investments fr public funds Lcal cntent requirements (transparent) Shrt timeframes, limited extensins: Increases interest: Less cst Less uncertainty f clsing Reduces time fr plitical backlash r new party

7 Requirements fr a PPP Prject C. Output specificatins and public cnsultatin. Stakehlder acceptance Dctrs, nurses, patients, hspital bards Other gvernment agencies D. Value fr Mney assessment Legitimacy tl. Clear, transparent assessment. Timing: Befre prceeding with P3. After bid submissin Wh makes decisin t prceed

8 Requirements fr a PPP Prject E. Prject Management skills fr gvernment team Crdinates gvernment apprach Decisin-making authrity n like-t-have vs must-have Keeps prcess mving. Assesses market risk appetite (when is n bid a real risk?)

9 Requirements fr a PPP Prject F. RFQ Requirements and prcess 3 bidders required Ontari IT example

10 Requirements fr a PPP Prject G. Prject Agreement Value fr mney assessment n risk allcatin (during negtiatins) What risks remain with public sectr and why. Early engagement f lender input - key arbiters f risk allcatin.

11 Requirements fr a PPP Prject H. Design and specificatin review prcess. I. Financial cmmitment at bid submissin. Prpsal validity perid Reduce pst bid changes. Fewer lender impsed changes and delays after bid. (Lender cmmitment t clse at bid.)

12 Requirements fr a PPP Prject J. Ensuring Operatinal Oversight Prject Agreement prvisins Mnitring expert and reprting Line Ministry r prcurement agency decisinmaking? Expertise in relevant agency

13 When PPPs fail One-ff P3s can be risky fr the public sectr Insufficient experience n bth sides t transfer risk r price it prperly Higher transactin csts Insufficient public sectr expertise Insufficient fcus n utput specificatins Experienced P3 markets will deal better with P3s than markets that d fewer P3s. Insufficient lng term capital Cunterparty risk gvernment r agency rating and reliability Inefficient and lengthy prcess Unclear r changing criteria Inadequate risk transfer

14 When PPPs fail Asset class issues IT, technlgy Technlgy challenges (nuclear) Overly ambitius prgrams Insufficient market readiness Overly aggressive risk transfer (price and legitimacy challenges) Legal prcess issues Enabling legislatin inadequate Legal climate uncertain Preventing public failures Agency reactins: 2008 crisis reactins Substantial cmpletin payments Refinancing Flexibility