Government must be held to the highest governance standards for the design, implementation and outcomes of PPPs. Done well, this results in bettter outcomes, alignment of programs with policy needs and greater legitimacy of PPP programs. There are various ways to achieve this.
- Disclosing information on PPP projects and programs
- Providing an appropriate role for legislative bodies
- Strengthening auditing institutions
- Engaging citizens
Disclosing information on PPP projects and programs
Transparency in and of itself is an important principle of governance—timely access to information is at the core of well-functioning accountability mechanisms. Recognizing this, there is increasing trend towards increased transparency in government contracting, with governments disclosing information on PPP projects and contracts. Many governments post this information in the public domain to make it freely accessible to anyone who is interested. This is known as proactive disclosure. Techniques include creating an online project database with key pieces of contract information, or an online library of PPP contracts, often with accompanying project summaries. Other countries provide reactive disclosure—that is, make information available only in response to a specific request by a member of the public. When contracts are disclosed, some countries redact information regarded as commercially sensitive.
Disclosing PPP contracts may not be enough for the public to understand them given they are long and complex documents—some additional information on the projects, and a plain-language description of the main contract provisions, is useful.
Some governments release information on the status of a project during preparation, so that both potential investors and stakeholders are aware of its progress.
Some governments have started the use of e-procurement portals for procurement of PPPs, so that key procurement and bid process documents are in the public domain.
There are a few studies that show whether increased transparency has an effect on project performance, and whether the direct involvement of civil society is a more effective oversight mechanism than a routine technical audit.
Providing an appropriate role for legislative bodies
The legislative branch of government often defines the PPP framework, by passing PPP legislation. In some cases, the legislature may be directly involved in the PPP process, approving PPP projects. More commonly, it exercises ex-post oversight, scrutinizing reports on the government’s PPP commitments.
The legislative branch of government engages in the PPP process by:
- Defining the PPP framework: the PPP Framework is often established in specific PPP legislation. A PPP law enables the legislative branch of government to set rules for how PPPs will be developed and implemented, against which those responsible can be held accountable.
- Defining limits on PPP commitments: the legislature may limit total PPP commitments, or the amount taken on in a year, or otherwise govern the risk and equity issues that PPPs can create.
- Approving PPP projects: PPP projects may require parliamentary approval. This requirement can be limited to PPP projects above a certain size.
- Receiving and reviewing reports on the PPP program: many governments include information on the PPP program in budget documents and other financial reports. This gives Parliament the opportunity to scrutinize the government’s commitments to PPPs, and hold the decision-makers responsible after the event. Parliaments may also commission and receive auditors’ reports on the PPP program.
Strengthening auditing institutions
Supreme audit entities form an important link in the chain of accountability for public expenditure decisions by providing independent reviews of PPP programs
The mandate of supreme audit entities varies by jurisdiction, but typically includes:
- Regular audits, which includes checking compliance, for example, that the requirements of the relevant regulations were observed and that the appropriate approvals were sought and granted and checking financial report including that commitments to PPPs have been accounted for appropriately and reported.
- Performance, or value for money audits—reviewing the government's effectiveness and efficiency, either for individual projects or the program as a whole.
- Also, in some jurisdictions, audit entities must sign off on PPP contracts.
Audit entities that do not have familiarity with or expertise in PPPs may however introduce delays or saddle PPP programs with requirements that are not appropriate for the specific needs of PPP. Guidance to assist them in discharging their tasks has been developed by the International Organization of Supreme Audit Institutions.
One particular issue that often arises is audit entity access to the private parties’ information. The remits of supreme audit entities typically extend only to government agencies or entities wholly or majority owned by government. Supreme audit entities therefore do not have the right or responsibility to audit PPP companies. Nonetheless, the private company often holds a lot of relevant information. The access of the audit entity to information held by the private party has the potential to create conflict.
PPPs are meant to provide value to the public. The public can directly participate in PPP project design, through consultation processes, and in monitoring service quality by providing channels for feedback. Transparency of the PPP process as a whole, and an active media, can inform public opinion and—if the issues are serious enough—influence elections.
During the PPP project development stages, stakeholder consultation is an important part of the PPP development process, allowing the concerns of potential service users and others affected by the project to be taken into consideration when structuring and implementing PPPs.
Once the PPP is in place, user feedback can be an important aspect of PPP performance monitoring. Firstly, some projects involve user feedback as an efficient, decentralized mechanism for collecting contract monitoring information. Second, an effective mechanism for resolving grievances may itself be an important aspect of project design. Ultimately, the purpose of the PPP is to provide services to users—in this respect, user satisfaction, or whether services meet users’ expectations, can be an important (albeit subjective) measure of PPP project performance alongside more technical or functional attributes.
User feedback mechanisms can be structured in various ways; some projects provide a web portal for continuous user-based input, others conduct regular user surveys. A specific mechanism may also be needed for user grievances.