What role for Public- Private Partnerships? Delivering on the - PowerPoint PPT Presentation

What role for Public- Private Partnerships? Delivering on the Post-2015 Development Agenda Lessons from an IEG Evaluation December 12, 2014 Stefan Apfalter Senior Evaluation Officer, IEG

How can PPPs help close the $ 1 trillion infrastructure gap? • Leveraging scares public resources • Potential to increase efficiency • USD 79bn p.a. PPP volume globally • But PPPs are not the panacea • PPPs require their own infrastructure! Title of Presentation 2

PPPs respond to market failure while minimizing government failure Performance-based Concession maintenance Existing Assets Operations and Lease Maintenance (O&M) Services contracts Privatization “Pure public“ “Pure private“ Construction contracts Licensing and regulation New Assets Build, Transfer, Design, Build, Build, Own, Operate Finance, Maintain Operate, Transfer Key: Core PPP types Other type of private sector involvement

Applying a strategic country approach  Advise governments on “if and how” to use PPPs  Based on comprehensive diagnostics  Readiness of sector  Public sector capacity  Fiscal implications  Integrated in NIPs 4

Addressing political economy  Sector reform is foundation of success, but often fails  Broad-based and early stakeholder consultations  Government commitment required  Local capacity 5

Investing more at the frontier % = PPP market in these countries 6

Learning through better M&E NO Data Data 7

Going forward • Applying strategic country approach • Addressing political economy factors • Investing at the frontier • Learning through better M&E 8

9 Thank you!

Comparison of Public Sector Payment Profiles Traditional Government Procurement PPP Procurement Costs / Costs / Expenditures Expenditures • Capital and operating • Public sector pays over the long costs are paid for by the term as services are delivered public sector who also • Has to cover increased Costs takes the risk of cost preparation costs and, at times, Overruns overruns and late part of capital costs to make PPP delivery project bankable. • Takes on contingent liabilities Capital Contingent Liabilities Costs Payment based on Running Costs Usage Overruns Upfront Payment based on Estimated Running VGP Availability Costs Preparation 5 10 15 20 Years 5 10 15 20 Years Construction Operation and Construction Operation and Maintenance Phase Maintenance Phase