Your summer PPP beach reading

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As you prepare to take off for summer travels to parts unknown, leave your paperbacks behind and take that stack of must-read magazines to the recycling bin, because I’ve compiled a selection of recent articles related to PPPs that will engage, educate and inspire. It’s also intended to answer some common questions – because many people are not fully aware of the complexities of PPPs and how risks are shared between the public and private sectors.

For those in search of a broader perspective on how PPPs contribute to global development, their challenges and their potential, these articles will give you something to think about before, during and after your vacation.
Transparency is always an important issue, whether we are talking public procurement or PPPs, and there has been a push recently for all government contracts to be made public. The argument is that transparency not only inhibits corruption and builds trust in governments, but can help improve the contracts themselves. For example, in Slovakia, the publication of contracts led to a 50 percent increase in the average number of bids on government tenders. In Buenos Aires, Argentina, it reduced variation and lowered average prices for hospital supplies.

In this editorial, the authors make their case. But what does this mean for PPPs, where openness and commercial confidentiality must find a balance? Can the two be reconciled?

As the global community shifts to meet the challenge of universal health care (UHC), the new imperatives facing emerging economies will require attention and investment. Climbing costs, the rapid escalation of chronic diseases, emergence of complex morbidities, relentless urbanization, and the expanding expectations of citizens are simultaneously confronting countries as they move towards UHC. Investing in hospitals will be key to this success, and PPPs have already played a significant role in the building, equipping, and maintaining of hospital infrastructure around the world.

This report by the Center for Global Development pinpoints the role PPPs can play in creating a “Hospital Agenda.”

Those in the development field may have an understanding of the technical fixes for development challenges alongside an understanding of the political context in which work is done, but it’s not always possible to connect the two. When implementing a PPP, however, technical success depends on navigating the political environment. This Overseas Development Institute paper examines how development professionals and donors have come to recognize the impor-tance of political economy in the success of development initiatives, but suggests that how professionals plan and implement projects has not kept pace.

When governments embark on a PPP, some are required to undertake value for money analyses or conduct public sector comparators, designed to ensure that a PPP is the best model to achieve government goals. Recently, the U.S. Federal Accounting Standards Advisory Board (FASAB) called for greater disclosure of risks in PPPs. The Wall Street Journal’s Risk & Compliance Journal takes a look at the FASAB’s exposure draft and discusses PPPs and the topic of risk and disclosures with FASAB staff, Macquarie Capital and the National Council for Public-Private Partnerships.

Since 2009, infrastructure financing to Africa has grown, thanks to the efforts of national African governments, official development financing and private participation in infrastructure investments. However, this financing is still not enough to reach the estimated US$93 billion gap in the continent’s infrastructure needs. A recent paper by the Brookings Institution suggests that there has not been enough data to give us a realistic picture of this growth. In this blog post, the authors highlight five major trends in infrastructure financing in Africa that emerged from their paper, “Financing African infrastructure: Can the world deliver?”

International development efforts are not immune to failure. But development institutions need to fear failure less and learn to embrace the idea that failure is feedback that alerts us to flawed assumptions or processes. PPPs by nature are about the sharing of risks among diverse partners, so being able to properly reflect on missteps along the way, and apply the knowledge to future projects, is a critical skill that needs to be developed and encouraged.

If you're interested in even more of a "summer thing" with PPPs, consider signing up for our free online course, which begins June 1.


Geoffrey Keele

Senior Stakeholder and Risk Management Advisor

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