Developing and implementing PPP projects

Responsibility for developing and implementing the PPP project-that is, for structuring the PPP, designing the PPP contract, and carrying out the PPP transaction-typically also falls to the entity with responsibility for ensuring the relevant asset or service is provided. This entity is often termed, for PPP purposes, the contracting authority, since it will usually be the public party to the PPP contract. The PPP law or policy may define the types of government ent ity that can be contracting authorities, and specify that these authorities are responsible for PPP implementation. For example:

•  In the Philippines, the BOT Law (1993) delegates responsibility for developing and implementing PPPs to eligible government agencies, units, or authorities. These include Government-Owned or Controlled Corporations (GOCCs), Government Financial Institutions (GFIs), State Universities and Colleges (SUCs), and Local Government Units. These agencies are required to create a Pre-qualification, Bids and Awards Committee (PBAC) that will oversee the PPP process for each PPP project [#202, Implementation Rules and Regulations]

•  Under Tanzania's PPP Law (2010), the contracting authority can be any eligible party within government. The contracting authority is responsible for facilitating project development, including project identification, a feasibility study, environmental impact assessment, and design and implementation of the PPP contract [#224]

•  In Colombia, the Manual for PPP procedures (2010) allows contracting authorities to be ministries or other sector-specific institutions, and local and regional institutions. The contracting authorities are in charge of conducting eligibility and value for money analyses, and submitting the results to the PPP Unit-UPAPP. The contracting authorities also manage the procurement process [#55, Chapter 4.2, page 34].

However, sector agencies may lack some of the skills needed to identify and develop PPP projects successfully. Particularly at the early stages of a PPP program, sector agencies may have little or no experience with engaging with the private sector on privately-financed projects. For this reason, other government entities are often also involved, to provide additional skills or perspectives. This can be achieved in different ways, including:

•  Forming inter-departmental committees to oversee each PPP transaction-often including representatives from the sector ministry as well as ministries of finance and planning, and legal representatives

•  Involving specialist entities in different implementing roles. This is the case in Peru, for example, where the procurement agency is responsible for implementing the PPP transaction, and sector regulatory agencies are responsible for monitoring the private parties' compliance with the PPP contract. Zevallos Ugarte's book on lessons learned in concessions in Peru [#297] provides further details on the institutional framework for implementing PPPs

•  Involving dedicated PPP units, as described in Section 2.3.4. These units are a repository of skill and experience in developing PPPs. They often support contracting authorities in implementing PPP projects. In a few cases the PPP unit may take over primary responsibility as implementing agency. For example, the PPP Law in Chile (2010) authorizes the Ministry of Public Works as the implementing agency for PPPs, through its dedicated concessions unit [#46, Article 1-3, 6-9, 15-21, 25, 27-30, 35-36, 39-41]. Section 2.3.4 provides several more examples of PPP units and the extent of their roles in implementing PPPs.

Even governments with extensive experience using PPPs typically also make use of external advisors to support in detailed preparation and appraisal of a proposed PPP, as described in Box 2.6: Use of external advisors below.