What role for Public- Private Partnerships? Delivering on the - - PowerPoint PPT Presentation

What role for Public- Private Partnerships?

Delivering on the Post-2015 Development Agenda

Lessons from an IEG Evaluation December 12, 2014 Stefan Apfalter Senior Evaluation Officer, IEG

Title of Presentation 2

How can PPPs help close the $ 1 trillion infrastructure gap?

• Leveraging scares public resources
• Potential to increase efficiency
• USD 79bn p.a. PPP volume globally
• But PPPs are not the panacea
• PPPs require their own infrastructure!

Licensing and regulation Privatization Services contracts Construction contracts

“Pure public“ “Pure private“

Existing Assets New Assets

Performance-based maintenance Operations and Maintenance (O&M) Design, Build, Finance, Maintain Build, Transfer, Operate Build, Own, Operate, Transfer Lease Concession

Core PPP types Other type of private sector involvement Key:

PPPs respond to market failure while minimizing government failure

Applying a strategic country approach

 Advise governments on “if and how” to use PPPs  Based on comprehensive diagnostics  Readiness of sector  Public sector capacity  Fiscal implications  Integrated in NIPs

4

Addressing political economy

 Sector reform is foundation of success, but often fails  Broad-based and early stakeholder consultations  Government commitment required  Local capacity

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Investing more at the frontier

6

% = PPP market in these countries

Learning through better M&E

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Data NO Data

Going forward

• Applying strategic country

approach

• Addressing political

economy factors

• Investing at the

frontier

• Learning through better M&E

8

9

Thank you!

Upfront VGP

Comparison of Public Sector Payment Profiles

Costs / Expenditures

Capital Costs Estimated Running Costs Running Costs Overruns Costs Overruns

5 10 15 20 Years Construction Operation and Maintenance Phase

• Capital and operating

costs are paid for by the public sector who also takes the risk of cost

• verruns and late

delivery

Traditional Government Procurement

Costs / Expenditures

Preparation Payment based on Availability Payment based on Usage

5 10 15 20 Years Construction Operation and Maintenance Phase

• Public sector pays over the long

term as services are delivered

• Has to cover increased

preparation costs and, at times, part of capital costs to make PPP project bankable.

• Takes on contingent liabilities

PPP Procurement

Contingent Liabilities