PPP in BrazilPPP in BrazilProcedures & Procedures & MethodologyMethodology

Marcelo de Lima e SouzaPPP Unit – Economic Advisory

Ministry of Planning, Budget and Management

Mexico, February 23rd 2010

Brazilian PPP Institutional Framework

PPP Project Selection and Development

Methodology & Capacity Building

Summary

PPP Institutional Framework

PPP in Brazil: a narrow definition

• In many countries• Almost any kind of long-term relationship

between public and private sectors• Joint ventures, leases, franchises, concessions, PFI

(UK),• privatization...

• In Brazil• PPP are special kinds of concessions• Common Concession – a concession of a

public service in which revenues come exclusively from user tariffs

• PPP and Common Concessions have similar economic structures

PPP in Brazil: a narrow definition

• Concessão patrocinada (Sponsored Concession)

• Common concession of public services• Origin of revenue: tariff + public payments

• Concessão administrativa (Administrative Concession)

• Direct or indirect services to the Public Administration

• Public services• Economic activities not listed as public

services• Origin of revenue: public payments

Revenue Generation and Type of Contract

PPP

Law 11.079/0

4

Concessions

8.987/959.074/95

PPP

11.079/04

and

Public Tendering

Law

8.666/93

Sustainable projects

Traditional projects of public investments and public

procurement

Partially sustainable projects by means of

public resources

Inde

pend

ent R

even

ue

Gener

ation

Cap

acity

Legal Requirements

Law 11.079/2004:• Contract duration from 5 to 35 years• Contract Value: at least R$ 20mi (US$

11mi)• Contract Object can’t exclusively be

restricted to:• Hiring personnel• Providing and/or installing equipments• Providing Civil works

PPP Project Selection and Development

Key Players

• CGP - PPP Council• Members:

• Ministry of Planning (coordinator)• Ministry of Finance• Presidency Chief of Staff

• Responsibilities: • Establishes contracting procedures• Defines PPP priority projects• Authorizes tendering processes

Key Players

• PPP Unit / Economic Advisory M. Planning• Technical support to the CGP• Administrative support to the CGP• Advisory to third parties

• TCU – National Audit Office• Oversees the proceedings on various levels

• STN – National Treasury• Fiscal controls

PPP Projects Portfoli

o

PPP Projects Portfoli

o

PHASE 1Identification of PPP

projects from the Multi-Year Plan

PHASE 1Identification of PPP

projects from the Multi-Year Plan

PHASE 3Structuring of PPP

projects

PHASE 3Structuring of PPP

projects

PHASE 2Preliminary analysis and

prioritization of PPP projects

PHASE 2Preliminary analysis and

prioritization of PPP projects

Multi-Year Plan

Multi-Year Plan

……………PPP

Projects

1 2

34

-

PPP Structuring Team

PPP Structuring Team

Development of PPP Projects

3

Development Strategy of the Federal

Government

Level of project

development

Interest by the private

sector

Revenue generation

capacity

……………

PPP PPP ProjectsProjects

12

34

Projects prioritization criteria

Legal StudiesLegal StudiesTechnical StudiesTechnical Studies Economic and

financial feasibility

Economic and financial feasibility

Engineering Project and Investment Program

Determine and project demand Economic/

Financial Model

Risk Analysis

Legal Model and documents

Financing Structure

Business Model

Environmental Studies

Convenience and Opportunity

Convenience and Opportunity

Operational Project and Performance Indicators

Studies on Fiscal Impact

Studies on Fiscal Impact

Required Studies for a PPP

Methodology & Capacity Building

Project ATN/MT 9587-BR

• Cooperation Agreement with IADB/MIF

• Consolidate the PPP Unit and provide support to sector units and to other government levels

• Institutionalize PPP methodology• Structure and develop projects

Consolidation and Support (2009 activities)

• 01 National Training Course• II Course on PPP Development• 300 participants

• 01 Regional Seminar• I Seminar on PPP• 270 Participants

• 05 Local Training Courses (Aracaju, Fortaleza, Natal, São Luis, Teresina)• About 50 participants on each session

Methodology Development

• Development of a Value for Money Methodology• Selection of external consultants in a competitive

process• Comparison of foreign methodology and best

practices• UK, Ireland, Australia, Netherlands, South Africa and Canada

• Creation of a quantitave and qualitative method fo• Publishing a PPP Project Analysis Manual• Creation of an Analysis Model for PPP Projects

• Development of an illustrative applied model on eight projects on different economy sectors

• Public officials training program• Expected conclusion date: November 2010

Project Structuring

• Technical Cooperation Agreements signed with states and municipalities:• Agreements with Bahia, Ceará, Manaus,

Maranhão, Piauí,Rio Grande do Norte• Development of projects:

• Highway (Piauí)• Logistics Plataform (Bahia)• Administrative Center (Rio Grande do Norte)

Project Structuring

• Technical Cooperation Agreements signed with federal organizations:• Brazilian Space Agency: geostationary

satellite

• Ad hoc cooperation

Thank You.

Marcelo de Lima e Souza

Ministério do Planejamento, Orçamento e Gestão

Tel: +55 61 2020-4944

Fax: + 55 61 2020-8084

E-mail: marcelo.l.souza@planejamento.gov.br