2.19 Particularly where PPP units are to provide transactions skills and experience careful thought needs to be given to the nature of the unit and its ability to buy in these skills from the private sector. One option is to establish a unit within a ministry and rely on long-term consulting skills to supplement capacities. Greater independence can be achieved by setting up the unit as an autonomous entity, attached to but not fully part of the government bureaucracy as with the Philippines BOT center. A third approach comes from Canada, where Partnerships British Columbia is a government-owned company that works with line departments and other agencies to identify and procure PPPs in that province. This is overseen by a public/private board and offers salaries outside the normal civil service ranges to attract people with relevant financial and transactions skills.
| Box 4: The role of the South African PPP Unit |
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In 2000, South Africa set up a PPP Unit to serve as the focal point for coordinating and managing the PPP program. The PPP Unit reports to the Budget Office of the National Treasury. The PPP Unit in South Africa is a good example of a central organization with a wide range of tasks, both advisory and mandatory, relating to PPPs. The key functions of South Africa's PPP Unit, which has 11 professional staff at present, are: formal approval at three different stages of project preparation to ensure compliance with Treasury regulations; in-depth technical assistance to departments throughout the PPP project cycle; assistance to departments in appointing transaction advisors; development of policy, guidelines, and instructions, including the PPP Manual and the Standardized PPP Provisions (contract terms); training courses and workshops, based round this Manual; promotion of public awareness of PPPs through the PPP Quarterly publication, website, and conferences; and management of the Project Development Facility that provides funding for the government's transaction costs. | ||
2.20 Another way is to set up a joint venture company that is owned in part by private sector shareholders. This is usually complemented by incentivizing the unit by allowing it to benefit financially from success fees to be paid by the winning bidder when the deal is closed. One example of this is Partnerships U.K. (PUK), established in 2000. PUK, 51% owned by the private sector, considers itself to be a bridge between the public and private sectors. It focuses on structuring and negotiating the commercial aspects of the deal. PUK regards itself as a PPP "developer," playing a more active role along with the public authority.