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partenariats public-privé

Pushing water downhill: Considering ICT PPPs

Jeff Delmon's picture
Students using new high-speed Internet in Tonga. Photo: World Bank Group

For private financiers, official government support to information and communications technology (ICT) projects might seem like trying to push water downhill. After all, isn’t ICT incredibly profitable? What’s the point of a public-private partnership (PPP) in this sector, anyway?

Here’s the rest of that familiar argument: Government should stay out of the way and let the private sector carry the communications sector; it is a waste of effort and inefficient to try to push forward something that has its own momentum. Like a rushing river, the naysayers conclude, ICT needs no help advancing down its inevitable course.

It sounds reasonable in theory, but in practice, that approach just doesn’t work. The government needs to guide the river down the best course for the citizens it serves, building a weir or mill to help the river provide maximum benefits to the people who need it. And, just as water is the foundation of life, communication technologies are necessary to prosper in today’s world. Knowledge is power. And specifically, access to markets is improved by mobile phones, as is access to banking services, finance, investment opportunities, and education.

Successful ICT strategies usher in jobs, empowerment and economic growth.

Healthcare PPPs: a valuable policy option

Michael Klein's picture
Hospital do Subúrbio, Brazil. Photo: flickr/Fotos GOVBA

Public-private partnerships (PPP) in healthcare have sprung up in countries across the world.  A partial glimpse is provided in this map: http://batchgeo.com/map/f94c86d8e23c42491b545fb3b50daa88

Some governments pursue PPPs when frustration with ill-functioning public provision prompts them; not least corrupt practices of public-sector doctors who collect “side payments” from patients. At the same time, critics are wary of the motives of commercial providers. 
 
In a short note, I review the key arguments and the evidence. In sum, PPPs are a valuable policy option that allows governments to step outside failing public sector approaches. Intriguingly, some PPPs that have attracted high-profile criticism — hospitals in Lesotho and Spain (Alzira)  actually seem to perform well based on the evidence. 

​Why institutional infrastructure is as important as physical infrastructure: Southeast Asia’s experience with air liberalization policies

Cledan Mandri-Perrott's picture
As a Singapore-based public-private partnerships (PPP) team focused largely on infrastructure development, we look closely at infrastructure’s impact on our region’s economic health. The governments in our area also track this in great detail, coordinating efforts through the Association of Southeast Asian Nations (ASEAN)
 
Photo: Wikimedia Commons

Among other benefits, ASEAN gives countries a platform to develop coordinated ways in which member countries can accelerate economic growth alongside social progress. An important focus for ASEAN members is how this large, diverse group can build infrastructure that will bring valuable public benefits to all of its citizens. This includes infrastructure development, some by way of traditional PPPs,that improve road networks, trade connectivity, mobility, power, and other public services in developing regions.
 
Yet in the ASEAN community, as everywhere else, building infrastructure cannot be done in a vacuum.  Developing institutional infrastructure and improving the quality and efficient use of existing physical infrastructure is as important as creating physical infrastructure. The right policies and programs can ensure that existing infrastructure is efficient, provides quality services and is used to optimal capacity. As ASEAN’s successes have demonstrated, these goals are contingent on good planning and coordination among users and agencies.

One question, eight experts, part eight: Thomas Maier

Thomas Maier's picture
Almaty, Kazakhstan. Photo: Wikimedia Commons

To gain a better understanding of how innovation in public-private partnerships (PPPs) builds on genuine learning, we reached out to PPP infrastructure experts around the world, posing the same question to each. Their honest answers redefine what works — and provide new insights into the PPP process. This is the question we posed: How can mistakes be absorbed into the learning process, and when can failure function as a step toward a PPP’s long-term success?

Our eighth and final response in this eight-part series comes from Thomas Maier, Managing Director, Infrastructure with the European Bank for Reconstruction and Development (EBRD).

For countries new to PPPs, there is no doubt a steep learning curve. Fortunately, there is also a growing body of experience that such countries can learn from — the key is to understand the essence of the lessons and then incorporate these changes into the design of government support for PPPs.

Ultimately there is, of course, no substitute for good project preparation, local capacity and the development of solid legal frameworks and local capital markets — we all know these are the building blocks for the long-term success of any country’s PPP program.

Focusing on lessons learned from EBRD’s region, two current examples from Kazakhstan and Turkey come to mind.

​Developing municipal credit markets: Experience with pooled finance

Kirti Devi's picture

Urbanization is a defining trend of our time. In 1900, 13 percent of the world’s population was urban. Today more than half of the estimated population of 7.2 billion lives in cities. And this growth has happened in one century.
 
On the upside: Urbanization and economic development are correlated and there are other benefits of density and agglomeration economies. Production is concentrated in cities, which are also centers of demand and social convergence. No country has achieved high-income status without significant urbanization. However, increasing energy use, accelerating CO2 emissions and more environmental pressures will accompany GDP growth. Mismanaged urbanization will impose social and environmental costs that will be difficult to reverse.
 
In many countries, this urbanization trend is playing out within the context of increased decentralization and fiscal adjustment, and local governments are increasingly responsible for the provision and financing of public infrastructure for their constituencies. This has placed an increased strain on local financing resources and led to an emphasis on the development of local credit markets and resorting to public-private partnerships (PPPs).

​Toward an effective PPP business model: An eight-point plan for closing the infrastructure gap

Thomas Maier's picture
Photo: Wikimedia Commons
The global need for infrastructure is significant, particularly in emerging markets. By consensus estimates from the Organisation for Economic Co-operation and Development (OECD) to the Boston Consulting Group and the World Bank Group, the estimated annual global infrastructure investment need is about US$3.7 trillion – of which only about $2.7 trillion is currently met on an annual basis. 

This much-discussed “infrastructure gap” is large and it is widening. Even if fiscal conditions in developed and emerging economies improve, the need introduced by the infrastructure financing gap is unlikely to be met from public sources alone. This generates an expectation that private capital and user charges must be mobilized to fill these gaps.

But this is an entirely predictable problem, and over many years the international community has made efforts to provide assistance in building public-private partnership (PPP) capacity in emerging markets. Finding ways to leverage private sector investment through sound, consistent and sustained public sector policies should be a focal point for governments around the world.  International financial institutions (IFIs), given their unique relationships with emerging market governments, can and do play an important role. The community of professionals in multilateral development banks (MDBs) is listening; MDBs are willing and able partners.

Of course, stating that idea is one thing; practicing it is another. Here are eight ways that together, we can move from the theoretical to the actual and reach our goals for infrastructure.

One question, eight experts, part seven: Robert Puentes

Robert Puentes's picture

To gain a better understanding of how innovation in public-private partnerships (PPPs) builds on genuine learning, we reached out to PPP infrastructure experts around the world, posing the same question to each. Their honest answers redefine what works — and provide new insights into the PPP process. This is the question we posed: How can mistakes be absorbed into the learning process, and when can failure function as a step toward a PPP’s long-term success?

Our seventh response in this eight-part series comes from Robert Puentes, Senior Fellow with the Brookings Institution's Metropolitan Policy Program

Virginia's Pocahontas Parkway.
Photo: Richmond Times-Dispatch

In the U.S., one of the best learning tools for places wishing to engage in PPPs for infrastructure has been past mistakes. From the parking meter deal in Chicago, to Virginia’s Pocahontas Parkway, and a handful of others, American cities and states pay close attention to one another and are loathe to repeat previous problems.

But going forward, institutionalizing such learnings requires a dedicated team. Indeed, assembling a group with the right mix of finance, legal, policy, and communications experience is critical to the success of any PPP project. Public sector agencies looking to procure a limited number of PPP projects or engaging in their first, often use outside advisors for most of these services. This can be a successful strategy as long as public sector decision makers remain in control of the process.

Vlog voice from the field: What's behind the new push for Caribbean PPPs?

Brian Samuel's picture
Last week, the PPP Blog introduced readers to the new Caribbean Regional Support Facility, which is preparing to launch a series of boot camp-style workshops to increase technical capacity among Caribbean government officials and achieve long-sought results. 

In our first video blog from the field, Brian Samuel, a PPP Coordinator with the Caribbean Development Bank (and a former IFC staffer), explains why Caribbean public-private partnerships (PPPs) need this boost and how the PPP boot camp can transform talk into action.
 
PPP Boot Camps in the Caribbean

How national PPP units can influence regional performance: Korea’s experience

Kang-Soo Kim's picture

Kang-Soo Kim is Executive Director, Public and Private Infrastructure Investment Management Center (PIMAC), at the Korea Development Institute (KDI), the Republic of Korea’s leading think tank on national economic development. In this blog entry, he explains how national Public-Private Partnership (PPP) units can influence regional economic performance.

Photo: Wikimedia Commons

What advice would you give governments creating a PPP unit?

First, for a government considering this, the vision for PPP needs to be established and shared with others. Second, clearly distinguished roles and functions must be institutionalized. Third, expertise needs to be developed in fields like law, finance, accounting, economics, development, and engineering. Fourth, active benchmarking of developed PPP economies and cooperation with other PPP units should be encouraged and promoted

Overall, it’s critical to remember that a PPP unit’s expertise and capacity is not built overnight. So my final piece of advice is that while experience is built, remaining patient is just as important as maintaining a clear vision of PPP.

What makes PIMAC effective?

The legal and institutional system that guarantees independence and objectivity to the evaluation body is the most important element here. A PPP unit should not be in any way influenced by other players in a PPP project — whether the budget authority, the competent authority, or the private concessionaire. The government is vulnerable to political influence although the private sector is the project stakeholder. Independent and objective assessment by the PPP unit is therefore all the more crucial. It is important that the government lends its support, and that all decision-making reflects evaluations made by the PPP unit.

One question, eight experts, part six: William Dachs

William Dachs's picture

To gain a better understanding of how innovation in public-private partnerships (PPPs) builds on genuine learning, we reached out to PPP infrastructure experts around the world, posing the same question to each. Their honest answers redefine what works — and provide new insights into the PPP process. This is the question we posed: How can mistakes be absorbed into the learning process, and when can failure function as a step toward a PPP’s long-term success?

Our sixth response in this eight-part series comes from William Dachs, Chief Operating Officer of the Gautrain Management Agency in South Africa. 

South Africa's Gautrain.
Photo: Wikimedia Commons

The ability of a national PPP program to apply lessons learned from one project to the next is dependent on factors such as the documentation of case studies and the use of a central repository of information in a PPP unit at the national level, where such lessons can be distilled and applied to the next project in that jurisdiction.

There are plenty of good examples of such programs that learn from and apply lessons. But how are individual PPP projects able to absorb mistakes and still meet the original objectives of value for money for the users of the services and the taxpayers who may ultimately bear the risk of the project failing?

It is impossible to predict the range of possible risks and to allocate these with precision over 20 to 25 years in a complex and changing environment. As such, the key to achieving long-term value from a PPP does not only lie in the quality of the feasibility and procurement phases, but also in how the balance of risk and rewards is established and applied in the PPP contract so as to be able to survive significant changes over a long period of time.


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