Public-Private Partnerships (audio)

Virginia began its experience with Public-Private Partnerships by passing the Virginia Public-Private Transportation Act (PPTA) of 1995, which provided the legal framework for PPPs in the transportation sector. In 2002, the Virginia legislature passed the Public-Private Educational Facilities & Infrastructure Act (PPEA) to expand the possibility of PPP procurement outside the transportation sector. The Commonwealth has had a dedicated PPP organization within the state government since 2005, the current form of which is the Virginia Office of Public-Private Partnerships (VAP3). Virginia’s approach to PPP was codified in the publication of its PPTA Implementation Manuel and Guidelines in 2005. Updates, tools, and supplemental material have been developed since then, and the PPEA Implementation Manual and Guidelines was released in 2015.

Virginia has successfully implemented major PPP projects over the past decade, including a Design-Build-Operate-Maintain contract for the Capital Beltway Express Lanes, the Downtown/Midtown Tunnel/Martin Luther King Boulevard Extension in Hampton Roads, and the Interstate 95 express lanes in 2012. Currently, VAP3 is finalizing a contract for the Interstate 66 Outside the Beltway project.

Virginia’s PPP selection process occurs in three phases: Project Identification, Project Screening, and Project Development. Solicited projects and unsolicited proposals are entertained during Project Identification. Project Screening is a two-part, high-level analysis: High-Level Screening/Policy Review and Detail-Level Screening. If proposals continue to Project Development, they will be subjected to value-for-money and risk analysis.

This webinar will seek to expand upon Virginia’s PPP selection process, especially in identification and screening. The webinar will also discuss how Virginia’s experience works within the U.S. federal, state, and local infrastructure, and how applicable this experience can be for developing economies.

Virginia began its experience with Public-Private Partnerships by passing the Virginia Public-Private Transportation Act (PPTA) of 1995, which provided the legal framework for PPPs in the transportation sector. In 2002, the Virginia legislature passed the Public-Private Educational Facilities & Infrastructure Act (PPEA) to expand the possibility of PPP procurement outside the transportation sector. The Commonwealth has had a dedicated PPP organization within the state government since 2005, the current form of which is the Virginia Office of Public-Private Partnerships (VAP3). Virginia’s approach to PPP was codified in the publication of its PPTA Implementation Manuel and Guidelines in 2005. Updates, tools, and supplemental material have been developed since then, and the PPEA Implementation Manual and Guidelines was released in 2015.

Virginia has successfully implemented major PPP projects over the past decade, including a Design-Build-Operate-Maintain contract for the Capital Beltway Express Lanes, the Downtown/Midtown Tunnel/Martin Luther King Boulevard Extension in Hampton Roads, and the Interstate 95 express lanes in 2012. Currently, VAP3 is finalizing a contract for the Interstate 66 Outside the Beltway project.

Virginia’s PPP selection process occurs in three phases: Project Identification, Project Screening, and Project Development. Solicited projects and unsolicited proposals are entertained during Project Identification. Project Screening is a two-part, high-level analysis: High-Level Screening/Policy Review and Detail-Level Screening. If proposals continue to Project Development, they will be subjected to value-for-money and risk analysis.

This webinar will seek to expand upon Virginia’s PPP selection process, especially in identification and screening. The webinar will also discuss how Virginia’s experience works within the U.S. federal, state, and local infrastructure, and how applicable this experience can be for developing economies.

The Republic of Korea has a long history of PPP. Its early experience consisted of individual legislation for specific projects. In 1994, the government began to formalize its process with the passing of the Act for the Promotion of Private Capital Investment in Social Overhead Capital, which provided the legal framework for the broader use of PPP. The legislation was revised in 1999 to produce the Act for Public-Private Partnerships in Infrastructure, which provided for the establishment of a PPP unit. The Korea Development Institute’s Public and Private Investment Management Center (PIMAC) currently serves as Korea’s PPP unit. From 1994 to 2015, the country implemented 684 PPP projects.

PIMAC is authorized to conduct prefeasibility studies for publicly financed projects with a total project cost of at least W50 billion, where W30 billion or more is subsidized by the State. Under the PPP legal and institutional framework, PIMAC screens and appraises PPP projects during the selection process. Solicited projects costing W200 billion or more for build-transfer-operate projects, or at least W100 billion for build-transfer-lease projects, and all unsolicited proposals are subject to analysis by PIMAC.

In Korea, potential PPP projects are identified by line ministries, or the private sector in the case of unsolicited proposals. As part of the feasibility assessment, projects (publicly financed and PPP) are subject to the Analytic Hierarchy Process, which includes economic, policy, and balanced regional development analyses. Following this process, projects go through project appraisal, where qualitative and quantitative (including value-for-money) analyses occur. If a project successfully completes this process, PIMAC will recommend it for procurement as a PPP.

The Netherlands has a rich history of private participation in the development of its public infrastructure, dating back to the country’s beginnings in the sixteenth and seventeenth centuries. However, the idea of formalized PPP immigrated to the Dutch political establishment in the 1980s from the United Kingdom’s experimentation with private finance initiatives. As a solution to the country’s budgetary woes, the Dutch government attempted PPP for a couple of tunnel projects at the end of the decade. Unfortunately, these projects experienced cost overruns and unpopularity, and the idea was abandoned for future projects until the late 1990s.

In 1999, the Ministry of Finance established the PPP Knowledge Centre, which drove much of the policy discussion on PPP until 2006. In 2004, the European Commission published a Green Paper on Public-Private Partnerships and Community Law on Public Contracts and Concessions. This paper currently serves as the legal guidance for Dutch PPP, and served as a catalyst for additional PPP development in the Netherlands. In 2006, the Ministry of Transport, Public Works, and Water Management started a PPP unit, beginning a rigorous campaign for PPP development. The success of this unit was followed shortly thereafter by the Ministry of Housing, Spatial Planning, and the Environment developing its own PPP unit, and later by the Ministry of Agriculture, Nature, and Food Quality. Cooperation between these three units led to the fast development of the Netherland PPP market and best practices, including standardized contracts, uniform reporting to Parliament, and standardized risk matrixes. This work precipitated project responsibility to fall to the executing ministry, with essential framework developments from the Ministry of Finance.

The Netherlands has developed its PPP selection process over the past decade, paying special attention to streamlining and publicizing the process to attract potential investors. The idea of creating an efficient and expeditious process was developed from the necessity to attract the private partners drawn to the larger PPP markets in France and the United Kingdom. This is also why the Netherlands only procures Design-Build-Finance-(Operate)-Maintain PPP projects. The Netherlands developed a small but dedicated group of civil servants, fostered by PwC, to create an enabling PPP environment. The Dutch approach to PPP selection is encompassed in three main analyses: Market Scan, Public-Private Comparator, and Public Sector Comparator.

Afghanistan, like many developing countries, has been seeking ways to develop and improve infrastructure within the framework of limited fiscal capabilities. In recent years, the World Bank Group has been working with the Government of Afghanistan on increasing private participation in infrastructure. Public-private partnerships are increasingly seen as a means to harness private innovation and finance while the government maintains ultimate ownership and insurance of the public interest. Although procuring infrastructure projects through PPP methods may be more efficient and provide greater value for money, the pre-tender project development costs tend to be higher than those associated with traditional procurement. In an effort to reduce waste in resources, it is important to have an effective methodology and tools to aid in identifying and screening potential PPP projects before resources are utilized in a full feasibility analysis. In 2015, the World Bank Group assisted the Government of Afghanistan in legal and regulatory reform to foster the growth of PPP. One of the products of this effort was the development of the PPP Suitability and Prioritization tool. This tool seeks to streamline the PPP process and ensure that resources are only used for proposals with a greater chance of viability.

In 1997, the South African Cabinet approved an inter-departmental task team to create a package of policy, legislative, and institutional reforms to create an enabling environment for PPPs. To facilitate this work, several pioneering PPPs were carried out by the South African Roads Agency, Department of Public Works and Correctional Services, South African National Parks, and two municipalities. The lessons learned from these preliminary projects helped in the development of a strategic framework for PPPs in 1999. The Parliament of South Africa passed the Public Finance Management Act (PFMA) in 1999. In 2000, the National Treasury enacted Treasury Regulation 16 in terms of the PFMA, which outlined the definitions and functions of PPP. This led to the establishment of the PPP Unit within the National Treasury and the publication of the Public Private Partnership Manual in 2004, which has since been updated to reflect changes to law and policy. The Government Technical Advisory Centre (GTAC) provides specialized analytical support to the National Treasury for the assessment of proposed large infrastructure investments. Project appraisals of megaprojects are undertaken to determine the likely economic and financial viability of the project, particularly where financial support is being requested from the fiscus. GTAC also performs related types of analysis, such as the likely impact of infrastructure investments on the financial sustainability of public utilities, financial cost comparisons of different elements of proposed investment programs, and potential funding mechanisms for infrastructure projects and programs. GTAC’s aim is to ensure that support is provided to the government in identifying public projects that offer the greatest value for money and contribute the most toward promoting economic growth and social welfare. The Capital Projects Unit has developed in-house methodologies for assessing projects and programs. GTAC seeks to assess proposals based on their value for money. Value is the economic and social activities the infrastructure supports, and money is the cost to put the infrastructure in place. The Capital Projects Unit assesses a proposal’s value for money by examining its social and economic context, demand, viability, financial aspects, and project deliverability. This webinar will look at some key issues surrounding communication with key stakeholders in PPPs in Kenya.

This webinar aims to review Kenya’s infrastructure financing and PPP program from the lenses of its legal and regulatory frameworks.

Kenya issued a National PPP policy in 2012 and adopted a PPP Act in 2013 facilitating the establishment of a PPP Unit in the National Treasury. Efforts are also underway to develop a framework for Government Support Mechanisms and another for managing Fiscal Commitments and Contingent Liabilities (FCCL).

One challenge that Kenya faces with its PPP program is that, although there is strong interest from county governments in implementing PPPs as a means of financing local infrastructure development, there is a dearth of information on the potential pipeline of county PPP projects; the required policy, regulatory and institutional arrangements that need to be put in place to support county PPPs; and clarity on the roles and responsibilities of counties vis-à-vis national Ministries and agencies.

Space is limited, we encourage you to register early and we look forward to your participation.

To learn more about the PPP Webinar Series and other PPP news, follow us on Twitter @WBG_PPP - #PPPs.

Sub-national governments at provincial and local levels in South Asia have turned to PPP projects, which are relatively smaller in size, for the provision of essential services like solid waste management, energy-efficient street-lighting, municipal parking etc. These services, if delivered well, can have a transformative effect on the lives of citizens. While the benefits of private participation in the delivery of these services are undeniable, few projects have been undertaken relative to the substantial requirement.

One such project is the multi-level car parking (MLCP) PPP facility recently closed by the Thimphu Municipal Corporation in Bhutan which intends to transform Norzin Lam, the most important shopping and entertainment street in the city, into a pedestrian-only thoroughfare. The IFC provided transaction advisory services for the Project.

This podcast will discuss the project, its structure, the larger vision behind it and its challenges.

The Ministry of Finance, Government of Pakistan, established the Infrastructure Project Development Facility (IPDF) in May 2006 to facilitate the preparation and closure of PPP transactions. The IPDF was expected to provide expertise and hands on support to Implementing Agencies in improving their PPP proposals, preparing them for tendering, and supervising the bidding process. A PPP policy Task Force (TF) composed of senior officials from Ministries and provinces, and advisors from the private sector, was also established.

In addition, relatively more progressive governments like that of Sindh also initiated a drive towards creating a policy framework as well as project pipelines. Sindh is one of the few states in Pakistan to have a pipeline as well as transacted projects.

This podcast will explore the successes and challenges of the PPP program in Pakistan, with focus on the Government of Sindh and the national government.

Guest speaker: Aijaz Ahmad Senior Public-Private Partnerships Specialist, The World Bank

In this podcast Gavin Munro discusses the main steps governments can take to help private sector investment in infrastructure through public-private partnerships and other development tools.