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.
Photo: Lufa Farms | Flickr Creative Commons
Have you ever walked around a megastore, lost in the aisles of choices, only to go home without the one item you set out for? Conversely, have you ever wandered into a much smaller “mom and pop” shop and found everything you need?
Many reasons compel us to support small and medium businesses: tailored knowledge, personalized service, and the satisfaction of contributing directly to the local economy.
The benefits of supporting such small and medium-sized enterprises, or SMEs, carry over into Public-Private Partnerships (PPPs). But often, these enterprises find themselves “crowded out” by the bigger players in infrastructure. SMEs in developing countries may find it particularly costly and time consuming to comply with complex pre-qualification criteria or bidding documents, leaving them unable to compete with market leaders. This is unfortunate, because , decrease costs, facilitate logistics, encourage increased competition, and create broader opportunities for economic development.
These vital and homegrown engines of growth are the focus of a new section on the PPP in Infrastructure Resource Center (PPPIRC) that links the policies, laws, and contractual clauses that can foster a more inclusive approach to SMEs in PPPs.
Photo: Deutsche Welle | Flickr Creative Commons
As in many regions, countries in Latin America and the Caribbean are underinvesting in infrastructure—spending in the sector is only about half of the $300 billion needed annually to encourage growth and reduce poverty. Addressing this issue involves the successful interaction between public officials and leading infrastructure actors, particularly in the private sector. Stimulating such public-private dialogue is a priority for the Inter-American Development Bank (IDB) Group, a technical partner of the Global Infrastructure Facility (GIF). Along with other partners, our recently established PPP unit supports governments, international financial institutions, and the private sector to develop infrastructure projects.
It was therefore a privilege for me to moderate a panel on country infrastructure programs in Latin America at the GIF’s annual Advisory Council meeting in April 2017. We covered three countries—Colombia, Argentina and Peru—at different stages of PPP market development. The findings were encouraging and illustrate a path forward for other countries in the region:
Photo: Texas Millitary Department | Flickr Creative Commons
“Hurricane Harvey Has Knocked Out 25 Percent of Gulf Gas Production” – GIZMODO
“This storm has already left hundreds of thousands without power along the Texas coast. And there are reports of significant damage to buildings in Rockport, Texas, near where the storm made landfall Friday night. At a press conference Saturday afternoon, Texas Governor Greg Abbott said it may be ‘several days before outages can be addressed’ due to continued high winds.” - VOX
What is Future-Proofing?
Future-proofing is described as the process of anticipating the future and developing methods to mitigate its impacts. Future-proofing when considered in infrastructure Public-Private Partnerships (PPPs) adds a layer of resilience to projects that will ensure their sustainability and longevity.
Investing in an energy-efficient street lighting system can be a game changer for municipalities.
On one hand, switching to modern street lighting schemes based on light-emitting diode (LED) technology presents an opportunity for city governments to lower energy consumption, operation and maintenance costs while reducing the overall carbon footprint.
At the same time, reliable bright street lighting can have a range of socio-economic benefits: well-lit streets make people feel safe and reduce accidents while boosting economic and social activity after sunset.
Given these benefits, switching from outdated systems to modern technology is a win-win solution for many municipalities worldwide, but high upfront costs can be a deterrent. Attracting private capital via Public-Private Partnerships that secure efficiency and high technical standards in the long run.
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.
Photo: Highways England | Flickr Creative Commons
When PPP investors are asked what they look for in a project, they would typically reply they like projects that are bankable, where risks are fairly allocated between the government and the sponsor. When one probes deeper though as to where they normally invest, you might elicit this response: in a market where there is deep commitment by the government to undertake an effective PPP program. This is a very telling answer sometimes lost to governments that want to pursue ambitious PPP programs. Bankability for a developing country involves more than de-risking projects. More importantly, it entails de-risking the country and its PPP program.
Infrastructure is expensive, important and difficult to get right. For both the members of the Organisation for Economic Co-operation and Development (OECD) as well as other countries, infrastructure exposes shortcomings in country systems that may undermine our ability to identify, develop and procure good projects that are sustainable, affordable and legitimate. But there is no alternative—businesses rely on modern infrastructure to remain competitive, and society depends on good infrastructure to ensure equal opportunity and access to services for citizens.
With sufficient access to finance, .
In response to this challenge, investors, regulators, members of the public and private sectors, and decision makers from across levels of government, expertise, and regions, gathered at the 2nd OECD Forum on the Governance of Infrastructure in Paris in March to discuss the impact of infrastructure governance on productivity, jobs and wellbeing.
Cross-sector collaboration is more important than ever – and needs to be done in a better way. Governments now face a $2.5 trillion funding gap to meet the Sustainable Development Goals, and will need $90 trillion in public private investment to slow the dangerous effects of climate change, according to a UN report.
The potential for partnerships to solve problems faced by the public sector dominates the news: in the United States, the new government has announced plans to prop up a $1 trillion infrastructure plan with public private partnership (PPP) financing. In the wake of the Grenfell Tower fire tragedy, questions have arisen over the UK’s current method of outsourcing.
With ever-shrinking government budgets, the need for collaboration across all sectors – not just infrastructure, but environment, education, migration and many others – is more pressing than ever. Now is the time for government to get it right.