Several key requirements of fiscal commitment management may be most effective if included in legislation (such as a PPP law) and in a PPP project contract. These could include:
a. Providing regular access to performance information throughout the life of the project: Granting the relevant authority (such as the contracting Authority, Ministry of Finance, or PPP unit) the right to periodically request and obtain performance information from the project concessionaire helps ensure that the data for managing fiscal commitments are available in a timely manner and throughout the life of the project. A PPP law can allow this in general, while the particular data to be provided by a concessionaire on a specific project can be elaborated in each PPP project contract.
b. Assigning the obligation of monitoring PPP fiscal commitments to a particular government entity: Responsibility for disclosing all material information should be an important part of the legislation. For example in New Zealand, the legislation requires that the Minister of Finance sign a statement of responsibility to the effect that he or she has communicated all policy decisions and circumstances with material fiscal implications to the Treasury, and that the Secretary of the Treasury sign a statement that, on the basis of the economic and fiscal information available to it, the Treasury has used its best professional judgment in putting the budget together.17
c. Publishing PPP contracts and disclosing information on PPP fiscal commitment: As previously mentioned, a PPP law can stipulate that PPP contracts should be published, along with other information on the costs and risks of the financial obligations they impose on government. This enables the public to take an independent view of the extent of government's obligations, over and above the level that the government reports.18 A study by the World Bank Institute (2013) found that Freedom of Information legislation is the most common legal basis for PPP contract disclosure. However, there are cases in which the PPP law mandates that tender documents and contracts related to PPPs are to be disclosed to the public, such as in the states of Bahia and Minas Gerais in Brazil.
Whether or not a country publishes PPP contracts, there needs to be minimum disclosure requirements for PPP contractual information. For instance in Chile, and before disclosing full PPP contracts, the government was publishing its PPP contractual fiscal obligations in a standalone contingent liabilities report. With regards to disclosing contingent liabilities, the legislative requirements in some jurisdictions follow the principle of materiality: a risk exposure is disclosed if it may have a material effect on the government's financial position. Many countries have institutionalized the requirements to report contingent liabilities in their fiscal responsibility legislation or in the legislation covering public financial management (for more detail, see Cebotari 2008 and WBI 2013).
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17 Aliona Cebotari (2008), "Contingent Liabilities: Issues and Practice," IMF Working Paper WP/08/245.
18 World Bank Institute - WBI (2013), "Disclosure of Project and Contract Information in PPPs."