The implementation of PPP projects may require the involvement of several public authorities at various levels of government. A project may require approvals at several stages by many different authorities. The authority for final approval and award of PPP contracts is generally centralized. This may be a special body set up for this purpose and is usually at the ministerial or council of ministers level.
The whole process of project development, approval and implementation should be clearly understood by the implementing agency at the outset. In some countries, the process, activities at various stages of the process and requirements for approval by the competent authority are all well defined. The implementing agency just follows them.
In other countries, however, these elements may not be defined or may be only partially defined. In such a case, the implementing agency in consultation with the concerned authorities may consider to:
• Determine the administrative, legal and regulatory requirements for the project.
• Map out the whole PPP process.
• Identify tasks involved at each stage of the process.
• Set clear definitions and procedures of the tasks to be undertaken at each stage, and
• Find out the approvals that may be required and possible requirements and criteria for such approvals.
The above activities would give a clear idea about the entire project development and implementation process, amount of work involved in each stage, and the likely requirements of human and financial resources.
Table 2 provides some guidance in developing a PPP project. The activities at different stages in project development, as mentioned in the table, are discussed in Chapters 3 through 6.
Any previous experience of the concerned implementing agency or any other agency in the government in implementing PPP projects can greatly help in mapping out the whole process and in establishing the requirements and approval criteria.
A process flow diagram showing all the stages and their linkages, and tasks to be accomplished at each stage can help to understand the whole process by all persons involved in the project. The diagram can also help to estimate human and other resource requirements in project development.
Table 2. Stages in PPP project development and implementation
1. Project Identification and preparatory activities (Chapter 3)
1A. Project identification and preliminary internal stakeholder consultation
1B. In-house preparatory arrangements
• Scoping of the project and its structure
• Identifying the major planning and implementation issues
• Institutional due diligence
• Establishment of a project management structure
• Setting up of mechanism for stakeholder consultation and information disclosure
► Government approval (e.g. by a special body established for PPPs)
1C. Appointment of transaction advisor (if needed)
• Terms of reference
• Appointment
► Government approval
2. Project development and due diligence (Chapter 4)
• Project planning and feasibility
• Risk analysis and risk management matrix
• Financing
• Value for money
• Government support
• Responsibilities of, and liabilities on government
• Regulatory arrangements
• Service and output specifications
• Terms of contract
► Government approval (Special body, concerned ministries, central bank,
etc.)
3. Implementation arrangement and pre-procurement (Chapter 5)
• Implementation arrangement
• Independent credit rating of the project (when possible)
• Bidding documents
• Draft contract
• Special issues (land acquisition, investment promotion, etc.)
• Bid evaluation criteria, committees
► Government approval (Special body, legal office, Ministry of Law, etc.)
4. Procurement and project construction (Chapter 5)
• Interest of the private sector
• Pre-qualification of bidders
• RFP - finalization of service and output specifications
• Final tender
• Bid evaluation and selection
► Government approval (Special body, cabinet, etc.)
• Contract award, negotiation and signing; financial close; and construction
5. Contract management (Chapter 6)
• Establishment of a monitoring process and a team
• Monitoring of operation and service delivery
• Management of financial matters
6. Dispute resolution (Chapter 6)
• Establishment of a process and a dispute resolution team
► Government approval (when needed by defined bodies)
Note: Mention of government approval and the activities shown against different stages are only indicative. The actual stages of government approval and activities undertaken in any stage may vary from one country to another.