The starting point-or precursor-to identifying a potential PPP is identifying a priority public investment project. Many governments have well-defined processes and methodologies for public investment planning-which may extend from setting out sector or infrastructure strategies, assessing project options to meet objectives, conducting detailed feasibility and cost-benefit analyses, to project prioritization in an overall public investment plan or fiscal envelope.
Sound public investment planning and management is crucial to the success of PPP projects. A well-structured and managed PPP will not be effective unless it addresses clearly-identified objectives that are central to sector needs-particularly since the long-term nature of PPP contracts effectively locks in asset and service specifications over a long-term period. However, while public sector investment management provides the context for successful PPPs it is not the focus of this Reference Guide. The World Bank Website section on Public Investment Management provides a wealth of resources and examples on this topic.
In some cases, PPP project ideas may also emerge from other sources than the standard public investment planning process. These could include:
• Sector reform processes. Governments undertaking reform of an under-performing infrastructure sector may consider PPP among a range of options for introducing private participation to improve performance in a particular infrastructure sector, as described in Section 1.1.2: What PPP is Not: Other Types of Private Involvement. The ADB's PPP Handbook chapter on sector diagnostic analysis [#8, Chapter 3] describes how potential PPPs may emerge in the context
• Unsolicited proposals from businesses. Some governments provide ways in which businesses and other non-government entities may originate PPP project ideas, for consideration by government-as described in Section 3.6: Dealing with Unsolicited Proposals. This can be a way to capitalize on the ideas of the private sector on how to solve infrastructure challenges.
However, wherever a PPP is developed outside the typical public investment planning process, this raises the risk that such ideas may not be well-integrated with broader sector and infrastructure plans and priorities. Such project ideas should be subject to the same analysis and screening as any proposed public investment and PPP.