Potential investors and providers will look for appropriate frameworks before choosing to enter into a partnership, and will seek relevant safeguards for those involved in the partnerships. A sound legal and institutional framework is therefore a vital precondition for the success of any PPP market. Associated governmental bodies can support the development of partnerships by providing support and advice to public authorities looking to use PPPs as a route to deliver services and can also assist with various issues relating to financing of projects.
In the UK, the Treasury and National Audit Office have taken several steps to address these issues. The Treasury has issued guidance on these issues in three reports: Transforming Government Procurement; PFI: Strengthening long-term partnerships; and the Value for money assessment guide. The National Audit Office is an independent body responsible for scrutinising government spending which also conducts regular investigations and publishes reports on the performance of PPPs in the UK, allowing PPPs to be more transparent. It also provides information that can be used to analyse markets and development.
CASE STUDY 3 | John Laing Infrastructure Limited in Norway |
UK firms are increasingly using their PPP expertise overseas to deliver projects ahead of schedule and within budget. John Laing Infrastructure Limited, together with its partners Skanska ID and Skanska Norge, won the contract for a PPP road project in Norway. The concession was, when awarded, the largest single contract in the Norwegian highways sector. Construction was completed within 23 months and the new road opened in June 2005 - three months ahead of schedule. The Mayor of the Skaun Community, through which the E39 runs, said: "The new E39 is very important for Skaun's future development, and for the region as a whole. Local people are very pleased; they've wanted a new road for thirty years. Usually it would take four or five years to build a road like this but we have one in two years. It's a very short construction time". Laing attributed the success to the involvement and support of an established and experienced team drawn from the partners' resources. Close co-operation with the local community was an integral element of the consortium's approach. | |
Many governments have passed PPP laws or established PPP units dedicated to developing PPP programmes on a national or regional level. PPP units are a means of providing support, knowledge and confidence to existing players in the market as well as those thinking of entering. They represent a positive step towards opening up services to business and promoting PPPs. For example:
■ The French government has set up the PPP unit - 'Mission d'Appui Partenariats Public-Privé' - to oversee the introduction of new legislation, develop guidance and take on the role as a mediator to resolve issues
■ Brazil passed legislation on PPPs in December 2004 and created PPP forums to discuss implementation and look at international experience
■ The Italian government has also set up a PPPs unit based on the UK Treasury's PFI taskforce - Unità Tecnica Finanza di Progetto (UTFP). The aim of the UTFP is to help identify projects suitable for private sector involvement, and to provide assistance to central, regional and local administrations on PPP development
■ The Netherlands has followed the UK model by establishing a PPPs unit in every major government department as well as a PPPs centre within the Ministry of Finance- similar to Partnerships UK.25 This not only helps co-ordinate PPP projects but shows a long-term commitment by government to developing partnerships, which gives the market greater confidence
■ Poland is also moving towards private sector involvement in public service provision and passed the Public Private Partnership Act in October 2005
■ The Czech Republic passed the Act on Concessions Agreement in April 2006. The legislation allows for private involvement in delivering public services and demonstrates a tangible commitment by its government to PPPs.