A PPP unit is established as a point of coordination, quality control, accountability, and information related to PPPs either within a single sector or across a range of sectors. These units are created as a new agency or within a ministry such as the finance ministry, which is seen to be at arms' length from the sector to be reformed. For private proponents, the units provide transparency and consistency. For public stakeholders and the public at large, the units are able to disseminate information and provide specialized management of a specialized process. (See Box 12 for PPP units in Australia and the Philippines.)
Box 12: Public-Private Partnership (PPP) Units in Australia and the Philippines |
Australia-State of Victoria State governments in Australia are mainly responsible for most infrastructure sectors. In the State of Victoria, individual government departments are ultimately responsible for concession design and award. Project responsibility is assigned to a single minister in each case. This minister is then responsible for facilitating consultation with the other government departments involved in the project. The minister will also work with the Department of Treasury and Finance. To guide and promote consistency in analysis and procedures, the Victorian government has formulated an Infrastructure Investment Policy for Victoria, a description of which was published in June 1994 by the Department of Treasury and Finance. That department also acts as a reference center when guidance is required by other government entities. Source: www.treasury.vic.gov.au/ The BOT Center of the Philippines The Government of the Philippines created an institutional structure to support the country's large private infrastructure program. Each sectoral agency has a specialist build-operate-transfer (BOT) unit responsible for coordinating the design and implementation of its projects. National, provincial, and municipal authorities select and award projects under the framework. The authorities prepare a list of priority projects, which must be approved by either the Investment Coordination Committee of the National Economic and Development Authority (NEDA), the NEDA Board, or by local or regional councils. As part of its program, the government created a BOT Center to perform the following tasks: • Keeping an updated national inventory of all nominated projects eligible for development under the BOT framework, • Providing general advice to foreign investors doing business in the Philippines, • Developing infrastructure projects, • Providing technical assistance and training to central and local government officials on the design and implementation of projects, and • Spearheading promotional activities for the Philippine BOT program and specific projects through brochures and road shows. Initially, the Center was mainly involved in marketing the BOT concept to private investors. It now spends more time training national and local government officials. |
Source: www.botcenter.gov.ph/ |
The units serve to ensure that the key stakeholders relevant to a PPP adhere to a consistent methodology and agreed guidelines:
• project identification and prioritization,
• encouraging competition,
• due diligence of opportunities,
• adherence to transparent bidding processes,
• ensuring the appropriate treatment of employees and government assets, and
• ensuring the most effective use of government resources.
PPP units have typically focused on the identification, development, and bidding of projects. However, focus is increasing on the potential role units may play in the oversight of a contract once launched. This may include ensuring that the proper systems are in place for monitoring and reporting.
There is also increased attention to the structure and location of these units. Specifically, the units should command the right level of authority and should be led by a well-respected and competent executive. Further, there is increased support for the establishment of these units as akin to project developers with a pay structure that is linked to successful transactions. The units need not be large; in fact, large units can be seen to undermine the intent of PPPs to promote efficiency. The units often require initial or ongoing technical assistance from PPP specialists.
A final consideration is of the links between the PPP unit and the line ministries and, possibly, other levels of government. PPP activity may occur on a national or subnational level and the location of the PPP units should correlate to the market activity.
There must also be coordination with the sector ministry associated with a particular PPP, particularly the project implementation unit (PIU).