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In my last blog, I compared Public-Private Partnerships (PPPs) with marriage. I had explained that, though very different, the public and private can come together as they each possess characteristics beneficial to the other. Great in theory, but often difficult in practice.
Critics of PPPs abound and listing them here would be impractical. But whether they are auditors, civil society or within the World Bank Group, critics help us improve. We try to respond to our critics, including through blogs such as this one.
Public Private Partnerships
The protection of real property rights and improving the efficiency of land and property markets are key pillars in a modern, well-functioning economy. Over the last 30 years, many countries have initiated programs to issue land titles for all properties, improve the performance of land administration services, automate land information systems, and integrate them with ongoing e-government and e-service programs.
The World Bank, often with other development partners, has provided more than $1.5 billion in grants, credit and loans to more than 50 countries to support the implementation of such programs. Other bilateral and multi-lateral development partners have also provided substantial funding and technical assistance to many countries.
Most of us carry out research and report our findings with the expectation—or at least a hope—of an audience.
Yet fewer amongst us are familiar with our audience, even though their feedback may help us improve our work.
We, the team behind the Private Participation in Infrastructure (PPI) Database—the most comprehensive database of private investments in infrastructure in the developing world—continue to strengthen the database and our ensuing analyses. Learning more about our audience is an important component of these efforts.
The Nigerian government’s Infrastructure Concession Regulatory Commission has blazed an important trail, publishing details of 51 Federal Public Private Partnership (PPP) contracts—the culmination of a year’s work with the World Bank to ensure that all, non-confidential information is easily accessible to the public. We hope other countries will follow Nigeria’s trend-setting lead.
Photo: Magnus D | Flickr Creative Commons
The issue of bankability of infrastructure projects has long been a topic of discussion by the development and investors’ communities and is one of the key bottlenecks in attracting private capital to meet the global infrastructure gap and to provide millions of people with the key services they lack.
Under German presidency, the Business 20 (B20)—a platform that enables the global business community to contribute to international policy discussions—submitted 20 recommendations to Group of Twenty (G20) leaders under the theme “Building Resilience—Improving Sustainability—Assuming Responsibility.” Recommendation 14 is on boosting infrastructure finance and reads:
G20 members should boost infrastructure finance by developing and promoting bankable and investment-ready infrastructure project pipelines and by enhancing the role of Multilateral Development Banks as catalysts for private sector investment.
The B20 task force on infrastructure confirms “the investment gap in infrastructure is not the result of a shortage of capital. Real long-term interest rates are low, there is ample supply of long-term finance, interest by the private sector is high, and the benefits are obvious.” However, a number of factors hold back investment in terms of financing and funding. “The main challenge is to find bankable and investment-ready projects.”
Photo: Cristiano Zingale | Flickr Creative Commons
"The nation has a huge infrastructure deficit for which we require foreign capital and expertise to supplement whatever resources we can marshal at home. In essence, increased engagement with the outside world is called for as we seek public-private partnerships in our quest for enhanced capital and expertise. This is the way of the new world for all countries in the 21st century." – HE President Muhammadu Buhari
Within the first 100 days of his administration, President Muhammadu Buhari signaled his administration’s commitment to attracting the private capital and expertise needed to address Nigeria’s infrastructure deficit. This led to a renewed engagement between the World Bank Group and Nigeria to enhance the attractiveness of the Public-Private Partnership (PPP) ecosystem in the country.
Welcome to the “10 Candid Career Questions” series, introducing you to the infrastructure and PPP professionals who do the deals, analyze the data, and strategize on the next big thing. Each of them followed a different path into infra and/or PPP practice, and this series offers an inside look at their backgrounds, motivations, and choices. Each blogger receives the same 10 questions that tell their career story candidly and without jargon. We hope you will be surprised and inspired.
Many countries are experiencing urbanization within the context of increased decentralization and fiscal adjustment. This puts sub-national entities (local governments, utilities and state-owned enterprises) in the position of being increasingly responsible for developing and financing infrastructure and providing services to meet the needs of growing populations.
However, decentralization in many situations is still a work in progress. And often there is a mismatch between the ability of sub-nationals to provide services, and the autonomy or authority necessary to make decisions and access financing—often leaving them dependent on national governments. Additionally, they may also contend with inadequate regulatory and policy frameworks and weak domestic financial and capital markets.
- sustainable cities
- municipal governance
- infrastructure financing
- Public private partnership
- Public Private Partnerships
- Urban Development
- Public Sector and Governance
- Private Sector Development
- Europe and Central Asia
- Latin America & Caribbean
Photo: Passarinho/Pref.Olinda | Flickr Creative Commons
A few weeks ago, I delivered the training for the Certified Public-Private Partnership Professional (CP3P) Preparation exam to a group in São Paulo. I was about to commence my closing remarks at the end of the three-day very intensive journey, when a particularly dedicated participant asked: “Why is it that we have never heard of so many of these concepts before?”
It was indeed a very good question.
What are the key considerations for a public authority when drafting a Force Majeure provision in a Public-Private Partnership (PPP) contract? What are the differences between emerging and developed PPP markets in treating Change in Law clauses? And are there particular legal matters that need to be contemplated in a civil law jurisdiction rather than in a common law country when dealing with termination payments under a PPP agreement?
These are only some of the questions the World Bank Group’s recently-published Guidance on PPP Contractual Provisions, 2017 edition aims to address for the benefit of public authorities (contracting authorities) involved in PPPs. This blog is the first in a series of posts that will discuss and explore the issues covered in the 2017 Guidance.