Finance:Public-private partnership unit

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A Public-private partnership unit (PPP unit) is an organisation responsible for promoting, facilitating and/or assessing Public-private partnerships (PPP, P3, 3P) in their territory. PPP units can be government agencies, or semi-independent organizations created with full or part government support. Governments tend to create a PPP unit as a response to prior criticisms of the implementation of P3 projects in their country.[1] In 2009, 50% of OECD countries had created a centralized PPP unit, and many more of these institutions exist in other countries.[2]

Definition

There is no widely-accepted definition of what a PPP unit is. The World Bank defines a PPP Unit as an organization that “promotes or improves PPPs. It may manage the number and quality of PPPs by trying to attract more PPPs or trying to ensure that the PPPs meet specific quality criteria such as affordability, value for money, and appropriate risk transfer.”[2] Heather Whiteside describes them as "quasi-independent" institutional at "arm's length" from the government "created to promote, evaluate and develop P3 projects and policies." [3]

Overview

Different governments have encountered different institutional challenges in the PPP procurement process which justified the creation of a PPP Unit. Hence, these centralized PPP units need to address these issues by shaping their functions to suit their government's needs. The function, location (within government), and jurisdiction (i.e., who controls it) of dedicated PPP units may differ among countries, but generally, they include:

  • Policy guidance and advice on the content of national legislation. The guidance also includes defining which sectors are eligible for PPPs, as well as which PPP methods and schemes can be carried out.
  • Approving or rejecting proposed PPP projects (e.g., playing a gatekeeper role at any stage of the process, such as the initial planning or final approval stage).
  • Providing technical support to government organizations at the project identification, evaluation, procurement, or contract-management phase.
  • Capacity building (e.g., training of public-sector officials that are involved in PPP programs or interested in the PPP process).
  • Promoting PPPs within the private sector (e.g., PPP market development).[4]

The United Kingdom 's PPP units, the Treasury Task Force on PPP (1997) and later Partnerships UK (1998) were staffed with people linked with the City of London, accountancy and consultancy firms who had a vested interest in the success of PFI. This helped them override the public sector's opposition to expanding P3s. These institutions played a central role in establishing P3s as the "new normal" for public infrastructure procurements in the country. These institutions[5] In contrast, the Bangladesh Investment Facilitation Center (1999) suffered from a lack of formal or informal power, and so was involved in less than half of the 3P projects developed in the country.[2]

Effectiveness

A 2013 review[2] of research into the value of centralized PPP units (and not looking at the value of PPPs in general or any other type of PPP arrangement, as it was aimed at providing evidence needed to decide whether or not to set up a centralized PPP unit) found:

  • No quantitative evidence: There is very little quantitative evidence of the value of centralized PPP coordination units vis-à-vis ministries or government agencies individually procuring PPP projects. Most of the studies conducted on PPP units focus on their role and carry out only brief descriptive analyses of their value.
  • Limited authority: The majority of the PPP units reviewed in the literature do not play a particularly important role in approving or rejecting PPP programs or projects. While their advice is used in the decision-making process by other government bodies, the majority do not actually have any executive power to make such decisions themselves. Hence, when they have more authority, their value is seen to be higher.
  • PPP units differ by country and sector: Government failures, in regards to PPP units, vary by government. The requirements for PPPs also vary by country and sector, as do the risks involved (financial, social, etc.) for the country government. Hence, PPP units need to be tailored to solve these failures and properly assess risks and need to be located in the correct government departments, where they can command the most power. PPP units can play a number of important roles in the PPP process, but not all such units will play the same role, as their functions have been tailored to the individual country's needs. In some cases, limits on their authority have curtailed their effectiveness.
  • Implicit value: The lack of rigorous evidence does not prove that PPP units are not an important contributor to the success of a country's PPP program. The literature review does show that while there is no quantitative data to this effect, there are widespread perceptions about the importance of a well-functioning PPP unit for the success of a country's PPP program.

The author of the 2013 review[2] found no literature that rigorously evaluates the usefulness of PPP units. The literature does show that PPP units should be individually tailored to different government functions, address different government failures, and be appropriately positioned to support the country's PPP program. Where these conditions seem to have been met, there is a consensus that PPP units have played a positive role in national PPP programs.

Criticism

Centralized PPP units have been criticized for structuring their project assessments with a bias in favor of PPPs over traditional procurement methods, especially if Promoting PPPs as part of their mandate.[6] As P3 units are usually staffed with people linked with private financial, consultancy and accountancy firms who have a vested interest in the success of P3 policies, this creates an apparent conflict of interest.[5][3]

Some PPP units have been criticized for paying their executive staff well above the public sector's standard pay rate, which was deemed necessary for enticing people with financial experience to work for them.[3]

Some have questioned the usefulness of creating P3 units, as everything in their mandate could theoretically be accomplished by the government ministry responsible for public infrastructure.[2]

List of PPP Units

Country Territory PPP unit Duration
Australia Australia New South Wales New South Wales NSW Public-private partnerships
Queensland Queensland Projects Queensland
Template:Country data Victoria Victoria Partnerships Victoria 1999-present
Bangladesh Bangladesh National Infrastructure Investment Facilitation Center 1999-present
Public-Private Partnership Authority 2010-present
Belgium Belgium Flanders Flanders Flemish PPP Knowledge Center
Wallonia Wallonia Financial Information Cell
Brazil Brazil Federal PPP Unit
Template:Country data Bahia Bahia PPP Unit
Template:Country data Espírito Santo Espírito Santo PPP Unit
Template:Country data Minas Gerais Minas Gerais PPP Unit
Template:Country data Pernambuco Pernambuco PPP Unit
Template:Country data São Paulo São Paulo PPP Unit
Template:Country data Rio Grande do Sul Rio Grande do Sul PPP Unit
Canada Canada Federal PPP Canada 2009-2018
British Columbia British Columbia Partnerships BC 2002-present
New Brunswick New Brunswick Partnerships New Brunswick[3]
Ontario Ontario Infrastructure Ontario 2005-present
Quebec Quebec Quebec Agency for Public-Private Partnerships[7] 2004-2009
Saskatchewan Saskatchewan Saskbuilds 2012-present
China China National Public-private partnerships Center
Hong Kong Hong Kong Hong Kong Efficiency Unit
Croatia Croatia National Agency for Public-Private Partnerships
Czech Republic Czech Republic National PPP Association
Denmark Denmark National Danish Business Authority
Egypt Egypt National PPP Central Unit
Estonia Estonia National Public Procurement Center
France France National Mission d'Appui aux Partenariats Public-Privés
Germany Germany Template:Country data Lower Saxony Lower Saxony PPP Task Force
Template:Country data North Rhine-Westphalia North Rhine-Westphalia PPP Task Force
Ghana Ghana National PPP Advisory Units
Greece Greece National Secret Secretariat for PPPs
Honduras Honduras National Commission for the Promotion of Public-Private Partnerships
Hungary Hungary National Hungary Central PPP Unit 2003-present
Republic of Ireland Ireland National Central PPP Policy Unit
Israel Israel National PPP Unit (Ministry of Finance)
India India Federal Department of Economic Affairs PPP Cell 2006-present
Andhra Pradesh Urban Finance and Infrastructure
Assam Assam PPP
Bihar Infrastructure Development Authority
Karnataka Infrastructure Development Department
Maharashtra Region Development Authority
Odisha PPP Unit
Punjab Infrastructure Development Board
Uttarakhand PPP cell
Indonesia Indonesia Federal Indonesia Infrastructure Guarantee Fund
PPP Directorate of Bappenas
Italy Italy National Project Finance technical unit
Jamaica Jamaica National National Investment Bank of Jamaica 1980-present
Japan Japan National PFI Promotion Office
Kazakhstan Kazakhstan National Kazakhstan PPP Center
Kenya Kenya National PPP Unit
Kosovo Kosovo National Partnership Kosovo
Kuwait Kuwait National Partnerships Technical Bureau
Latvia Latvia National Central Finance and Contracting Agency
Lebanon Lebanon National Higher Council for Privatization and Partnerships
Malawi Malawi National Public Private Partership Comission
Malaysia Malaysia National PPP Unit
Mauritius Mauritius National PPP Unit
Mexico Mexico Federal + Regional Program for the Promotion of Public-Private Partnerships in Mexican States 2007-present
Namibia Namibia National PPP Unit
Nigeria Nigeria National Infrastructure Concession Regulatory Comission
New Zealand New Zealand National National Infrastructure Unit
Pakistan Pakistan Federal Private Power Infrastructure Board
Infrastructure Project Development Facility
Template:Country data Punjab Punjab PPP Cell
Template:Country data Sindh Sindh PPP Unit
Peru Peru National ProInversion
Philippines Philippines National Built Operate Transfer (BOT) centre 1999-present
Poland Poland National Centrum PPP
Portugal Portugal National Parpública 2003-present
Project Monitoring Technical Unit
Russia Russia Federal PPP Development Center
Senegal Senegal National Agence nationale chargée de la promotion des investissements et des grands travaux
Serbia Serbia National Commission for Public Private Partnerships
South Africa South Africa Federal South African Treasury PPP Unit 2000-present
South Korea South Korea National Private Infrastructure Investment Management Centre 2005-present
Sri Lanka Sri Lanka National Utilities Commission of Sri Lanka, Board of Investment
Uganda Uganda National PPP Unit (MoFPED)
United Arab Emirates United Arab Emirates Dubai Dubai PPP Unit 2015-present
United Kingdom United Kingdom National Treasury Task Force for PPP 1997-1998
Partnerships UK 1998-2011
Local Partnerships 2009-present
Northern Ireland Strategic Investment Board
Scotland Scotland Scottish Futures Trust 2008-present
United States United States Puerto Rico Puerto Rico PPP Authority
Uruguay Uruguay National Public-Private Participation Unit

Source: World Bank[8]

See also

  • Public-private partnerships by country
  • Public-private partnerships in Canada
  • Public-private partnerships in India
  • Public-private partnerships in the United States
  • Public–private partnership in transition economies
  • Privatization

References

  1. Siemiatycki, Matti (September 1, 2015). "Public-Private Partnerships in Canada: Reflections on twenty years of practice" (in en). Canadian Public Administration 58 (3): 343–362. doi:10.1111/capa.12119. ISSN 1754-7121. 
  2. 2.0 2.1 2.2 2.3 2.4 2.5 Alberto Lemma. "Literature Review: Evaluating the Costs and Benefits of Centralised PPP Units". EPS PEAKS. http://partnerplatform.org/?52awcpfx. 
  3. 3.0 3.1 3.2 3.3 Whiteside, Heather (2016). Public-private partnerships in Canada. Halifax: Fernwood Publishing. ISBN 978-1-55266-896-2. OCLC 952801311. https://www.worldcat.org/oclc/952801311. 
  4. World Bank (2007) "Public-Private Partnership Units: Lessons for their designs and use in infrastructure"
  5. 5.0 5.1 Shaoul, Jean; Stafford, Anne; Stapleton, Pamela (2007). "Partnerships and the role of financial advisors: private control over public policy?" (in en). doi:10.1332/030557307781571678. https://www.ingentaconnect.com/content/tpp/pap/2007/00000035/00000003/art00008;jsessionid=2kqnu9e47iptl.x-ic-live-02. 
  6. Siemiatycki, Matti (September 1, 2015). "Public-Private Partnerships in Canada: Reflections on twenty years of practice" (in en). Canadian Public Administration 58 (3): 343–362. doi:10.1111/capa.12119. ISSN 1754-7121. 
  7. Cosette, Robert. "La nouvelle Agence des partenariats public-privé du Québec". https://www.conferencedesjuristes.gouv.qc.ca/files/documents/8l/33/lanouvelleagencedespartenariatspublic-priveduquebec.pdf. 
  8. "PPP Units Around the World | Public private partnership". https://ppp.worldbank.org/public-private-partnership/overview/international-ppp-units.