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This is one in a series of blogs by Jeff Delmon using the metaphor of marriage (or divorce) to explore the dynamics of public-private partnerships (PPPs) as relationships created between two parties.
Tomas Castelazo | Wikimedia Commons
La revista colombiana Dinero, una de las publicaciones económicas más reconocidas de América Latina, recientemente publicó un estudio del Banco Mundial en el que clasificaba a Colombia como el segundo país más competitivo del mundo—detrás de un empate entre Gran Bretaña y Australia—para financiar obras de infraestructura bajo el modelo de Alianzas Público-Privadas (conocidas como APP). De igual manera, este puntaje (de 83 puntos sobre 100) fue también compartido por las naciones de Paraguay y Filipinas.
A primera vista, este es un virtuoso reconocimiento—por lo menos en papel. En la práctica diaria en la región latinoamericana, así como en la mayoría de las economías emergentes, la complejidad administrativa de los órganos gubernamentales aún representa uno de los más altos retos que demanda de atención inmediata para que las APPs puedan alcanzar su potencial máximo. Hacer esto correctamente integraría realmente el modelo de PPP en el motor de desarrollo económico y social requerido para competir en una economía globalizada.
Tomas Castelazo | Wikimedia Commons
The Colombian magazine Dinero, one of the most respected economic publications in Latin America, recently published a story about a World Bank study that placed Colombia as the second most competitive country in the world—behind a tie between Great Britain and Australia—to finance infrastructure projects under the public-private partnership model (known as PPPs). This score (83 points out of 100) was also shared by Paraguay and the Philippines.
At first glance, this is a virtuous recognition—at least on paper. However, in daily practice in the Latin American region, like most emerging economies, the administrative complexity of government bodies still presents enormous challenges that demand immediate attention if PPPs are to reach their full potential. Getting this right would truly integrate the PPP model into the economic and social development engine required to compete in a globalized economy.
Recently, I published a book about infrastructure public-private partnerships (PPPs) in the most challenging developing countries—a private sector perspective on what is required to bring investment and expertise to partner with governments in providing vital infrastructure services.
There is already a substantial body of work on the potential of PPPs and how to design, finance, and implement them—even in countries where there are limited legal and regulatory frameworks on which to build. What compelled me to write my book is the urge to share, as a practitioner over two decades in some of the most challenging markets, common pitfalls I’ve seen and what appear to be the critical elements of success in creating successful and replicable PPPs.
In a previous blog, I used the metaphor of marriage to explore the dynamic of public-private partnerships (PPPs) as relationships created between two parties with often very different expectations and methods of communication.
Today, we explore PPP cancellations, the what and why— further stretching the marriage metaphor.
The worst reconciliation is better than the best divorce – Miguel De Cervantes Saavedra
BRJ INC | Flickr
In the 18th century, muskets were produced by skilled craftsmen, one piece at a time. Each component was individually forged, filed, and worked—like a piece of art—until they could all be put together into a single weapon.
Today, the limitations of this approach are apparent. The cost and time required to produce each musket were high, and replacement parts had to be made by hand. This method was replaced by production with interchangeable parts in the early 19th century, a process advanced by Eli Whitney, an inventor who produced arms for the U.S. government.
Photo: rawpixel.com | Pexels
If the potential of public-private partnerships (PPPs) is to be realized, joint working within the public sector and between the public and private sectors needs to be improved.
Experience across the world has consistently identified that organizations find it difficult to effectively work together both within and across sectors. Issues of organizational objectives and priorities, individual and organizational sovereignty, status, power, resources, and culture act as barriers. This too often means that the potential outputs and outcomes from PPPs are not maximized.
Durante la primavera pasada, Honduras dio un paso importante para mejorar la transparencia y la rendición de cuentas con respecto a las Alianzas Público Privadas (APPs) con el lanzamiento de una plataforma online que permite acceder a información detallada sobre estas iniciativas.
El portal, creado con el apoyo del Banco Mundial y en coordinación con la Iniciativa de Transparencia en el Sector Construcción (CoST), permite acceder a información sobre las APPs a lo largo de todo el ciclo del proyecto.Este es un logro significativo que promueve la transparencia en la planificación, la contratación, la ejecución y el monitoreo de las APPs en Honduras, haciendo que la información sea fácilmente accesible para los ciudadanos.
This past spring, Honduras took an important step in improving transparency and accountability with respect to Public-Private Partnerships (PPP) by launching an online platform that allows public access to detailed information about these activities.
The portal, created with the support of the World Bank and in coordination with the Construction Sector Transparency Initiative (CoST), allows access to information related to PPP projects through their entire project cycle. This is a significant achievement that promotes transparency in PPP planning, procurement, implementation and monitoring in Honduras, by making information easily accessible to citizens.
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?
It is a truism that infrastructure projects, like much else in life, do not unfold exactly as planned. However, there is little room for failure because it would affect a large number of users for which the government would be accountable.
India happens to be the largest laboratory of PPP projects and offers a plethora of evidence. While most projects have succeeded, some have faced failure mainly because they were encumbered by lack of conceptual clarity in policy formulation as well as contractual framework.
Many assert that all future events cannot be predicted and a PPP contract must, therefore, be regarded as incomplete. They need to be reminded that if man could succeed in sending a satellite to space and operate it for several years without any ability to modify it, why can’t this be done while launching an infrastructure project?