4.39 There are a number of steps the center can take to expand the role that PPPs play in basic service delivery at both the national, state and municipal levels. The main components of a strategy to catalyze the broader use of PPPs would be:
♦ A clearly articulated policy statement on the use of PPPs at the national level, including their rationales and the benefits expected, backed up by concrete plans and targets for increasing the use of PPPs in national programs
♦ The creation of a national level PPP unit that would undertake information dissemination and guidance functions as discussed above, and provide advisory support to the central PPP program;
♦ A project development fund to reduce the transactions costs to state and local governments of preparing and bidding out PPPs; and
♦ A fund to partly cover the cost of state and local government commitments under PPP contracts.
4.40 The primary responsibility for developing state and municipal level PPPs lies at those levels of government. The actions outlined above can encourage the development of capacities and PPP programs at sub-national levels, but should not substitute for needed actions by the governments contracting for these PPPs. Perhaps most importantly, the scale and quality of the national PPP program provides a model for state and local governments. This includes not just the transactions themselves, but also commitments to disclosure of agreements and transparency and also the regular ex-post review of PPPs to assess whether the hoped-for benefits had been realized in practice.
4.41 The activities outlined above will need some form of coordinated effort. A PPP unit set up within a single ministry or agency with cross-cutting responsibilities, for example Finance or Planning, could readily undertake information dissemination and guidance roles, given budget, staff and oversight. It could also provide transactions expertise to a limited set of projects by buying-in expertise from the private sector on long-term consulting contracts. However, a broader transactions role across a range of central agencies and ministries and in particular developing sub-national PPPs will require more human resources. Were these activities to be pursued on a larger scale then this might better be done through a separate authority or company than a unit within an existing ministry or agency.
4.42 Regardless of whether or not the steps outlined in para. 4.39 are undertaken, the center should work through existing approaches to improve the monitoring of the fiscal costs of PPPs entered into by central agencies and state governments.