The standardization of risk allocation and contract terms helps reduce the cost of financing and project development. The standardization achieved in the UK17 and South Africa18 demonstrates the benefits available, including the reduction of time and cost of procurement. They also demonstrate the need for these provisions to evolve over time, as investors and lenders become more comfortable with the PPP framework and program.
The Philippine national planning agency revised its model PPP agreements for light rail, water, airport, and information technology outsourcing projects on the basis of lessons learned from prior deals, international best practices and in conformance with the applicable rules and regulations for PPPs. The Netherlands has standard contracts for roads, schools and Government buildings. South Africa issued in 2004 a set of "Standardized PPP Provisions,". India has developed model concession agreements for its national and state highway, port, airport and passenger and freight rail projects.19
Colombia does not utilize standard or model PPP contracts, but it has established broad policy guidelines with respect to risk allocation for PPP projects involving transport, energy, communications and water and wastewater. It also has developed risk matrices for each of these sectors specifying which risks are to be assumed by the public and private partners, and the underlying contracts when prepared must reflect this information.
Standardization should be implemented gradually, using an iterative process for market feedback.
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17 www.hm-treasury.gov.uk/documents/public-private-partnerships/ppp_index.cfm.
18 www.ppp.gov.za.
19 Available at: http://infrastructure.gov.in/mca.htm.