Capacity-building for Public-Private Partnerships

Ljiljana Stancic

Secretary, Team of Specialists on Public-Private Partnerships

United Nations Economic Commission for Europe

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Sarajevo, 25 September 2009

WHY PPPs? WHY UN?

1. PPPs -- alternative option for low income countries to modernize infrastructure

2. Success depends on improving the performance of institution surrounding PPPs

3. UNECE engaged in regional intergovernmental process

4. Success will require serious commitment to capacity-building in public administration

PPP MARKET DEVELOPMENT

Stage One•Define policy framework

•Test legal viability

•Identify project pipeline

•Develop foundation concepts

•Apply lessons from earliest deals to other sectors

•Start to build marketplace

Stage Two•Introduce legislative reform

•Publish policy and practice guidelines

•Establish dedicated PPP units

• Refine PPP delivery models

•Continue to foster marketplace

•Expand project pipeline

•Extend to new sectors

•Leverage new sources of funds

Stage Three•Fully defined, comprehensive “system”

•Legal impediments removed

•PPP models refined and reproduced

•Sophisticated risk allocation

•Committed, long-term deal flow

•Long-term political consensus

•Use of full-range of funding sources

•Thriving infrastructure investment market involving pension funds and private-equity funds

•Well-trained civil service applying lessons from PPP experience

PPP MARKET MATURITY CURVE

KEY CHALLENGE: Improving governance and institutional certainty

TO AVOID:

• Protracted negotiations• Lack of transparency in partner solution• Conflict of interest• Cancellation of projects • Burden on future taxpayers  

UNECE GUIDELINES ON PROMOTING GOOD GOVERNANCE IN PPPS

7 PRINCIPLES

A coherent PPP policy

Strong enabling institutions

Legal framework “fewer, better, simpler”

Cooperative risk sharing and mutual support

Transparency in partner section

Putting people first

Achieving sustainable development

Capacity-Building

• Train personnel for required skills for PPPs• Establish PPP Unit• Offer national PPP training programmes,

guidelines• Learn to choose right consultants to help on

projects• Networking for success

Putting People First

• Define the public interest

• Consult with people

• Inform: disclose information in contracts

• Oversee by objective third party

• Involve independent auditors

Situation today in transition economies: • There are few capacity-building programmes

• No practical training for policy makers and project managers

• Numerous international conferences on PPPs but no substitute for real practical hands-on training

ACHIEVING SUCCESS will require serious commitments to capacity-building in public administration…

UNECE WORK IN PPPs

• International recognition, level playing field

• Focus on good governance

• Identifying best practice

• Training modules

• Conferences and advisory missions

• Co-operation with other organisations

CONCLUSION• PPPs are an instrument that continue to be of

great interest to governments…

• But they are not a quick fix and require good

governance in order to provide real value for money

FOR MORE INFORMATION

Please visit: http://www.unece.org/ceci/ppp.html

Or contact: ljiljana.stancic@unece.org

THANK YOU FOR YOUR ATTENTION!