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Process & Institutions

Governments need skill, capacity, and coordination to implement PPPs successfully. The private party will design, finance, build, and maintain the infrastructure, as well as provide services (or some combination thereof). However, the government remains responsible for ensuring the public service is provided to the expected level of quality, and in a way that achieves value for money. The government must choose the right project, select a competent partner, and set and enforce the parameters within which that partner operates.

To this end, many governments define processes and institutional responsibilities for PPPs—that is, the steps that must be followed when developing and implementing a PPP project, and the entities responsible for each step.

PPP Process

There are several steps that a government must take to implement a PPP project successfully. Defining a standard PPP process, with approvals required at key points, helps ensure these steps are taken consistently and efficiently. Standardizing the process also helps ensure that all PPPs are developed in a way that is consistent with the government’s objectives, and improves coordination between the entities involved.

Please note that the process of developing and implementing a PPP is typically preceded by identifying a priority public investment project. Potential PPP projects typically emerge from a broader public investment planning and project selection process. At some point in this process, proposed public investment projects may be screened to determine whether they may provide more value if implemented as a PPP.

Institutional Responsibilities

Many countries have established special PPP units to enable, filter, monitor, and support projects. The specific functions of these PPP Units vary widely, along with their location within government and structure. 

Other oversight agencies can also have a role in PPP project approvals:

  • Planning agencies: some systems separate responsibility for planning and project appraisal from fiscal oversight, with the latter housed in a dedicated planning agency.
  • Attorney general offices: may be required to approve major government contracts, including PPPs, as part of their role as the government’s legal advisor.
  • Supreme audit entities: many Latin American countries also require approvals from audit entities that are independent of the executive branch of government.

These additional reviews are important checks on the quality and legality of the project appraisal and development process. However, they can also introduce delays at crucial points. Mechanisms for coordination can help, as can capacity-building to ensure these institutions are able to fulfill their roles efficiently and effectively.

Final approvals are often required by cabinet or parliament, given that PPPs bind future administrations. Jurisdictions vary as to which entity can approve a PPP. Some require legislative approval of projects, but more often, approval may come from cabinet or a cabinet-level committee, the ministry of finance, or a combination. Approval power may also depend on the size of the project, as is typically the case for other capital investments.

Learn More

    • 2014
    • Asian Development Bank (ADB), World Bank Group (WBG), Inter-American Development Bank (IDB), PPIAF

    PPP Process and Institutions

    PPP Reference Guide Version 2.0

    Governments need skill, capacity, and coordination to implement PPPs successfully. The private party will design, finance, build and maintain the infrastructure, and provide services. However, the government remains responsible for ensuring the public service is provided to the expected quality, in a way that achieves good value for money. The government must choose the right project, select a competent partner, and set and enforce the parameters within which that partner operates. To this end, many governments define processes and institutional responsibilities for PPPs—that is, the steps that must be followed when developing and implementing a PPP project, and the entities responsible for each step. This section 2.3 provides examples...

    • 2015
    • European PPP Expertise Centre (EPEC), European Investment Bank (EIB)

    A Programme Approach to PPPs

    Lessons from the European Experience

    A PPP program approach brings individual PPP projects together to deliver them in a coordinated way. This usually involves projects with a common objective such as a sector focus. A PPP program uses tools and resources, such as standardized documents or a specialized team, to deliver PPP projects more effectively and efficiently than might be the case with delivering projects individually. PPP programs have been, and continue to be, used across Europe in a range of sectors. There are a number of ways in which projects can be grouped together to improve delivery and management. This report focuses on program approaches that have been used to group projects where there is a strong sectoral basis and consequent benefits for doing...

    • 2007
    • Government of Egypt

    National Program for Public-Private Partnerships (Egypt)

    The Ministry of Finance in Egypt has published a step-by-step guide to developing PPPs. The guide directs the relevant Ministries through the PPP process, from identifying a project through developing a business case and the procurement process.

    • 2009
    • Government of Egypt

    Update on the National Program for Public-Private Partnerships (Egypt)

    The Ministry of Finance in Egypt has published a step-by-step guide to developing PPPs. The guide directs the relevant Ministries through the PPP process, from identifying a project through developing a business case and the procurement process.

    • 2011
    • Jay-Hyung Kim, Jungwook Kim, Sunghwan Shin, Seung-yeon Lee
    • Asian Development Bank (ADB)

    Public–Private Partnership Infrastructure Projects: Case Studies from the Republic of Korea

    Volume 1: Institutional Arrangements and Performance

    The Republic of Korea has rich experience in implementing PPP projects for almost a decade. This experience provides valuable lessons for most DMCs and that merits wider dissemination. The two-volume report prepared by the Korea Development Institute (KDI) presents an in-depth assessment of the different components of PPP framework of the Republic of Korea, including comparing and contrasting the success factors of the Korean PPP model with the experience of other countries through invited presentations on PPP frameworks and multisector case studies. This publication aims to support the efforts of DMCs engaged in the development of appropriate institutional PPP framework and regulatory reforms along with a well-defined and...

    • 2004
    • Government of South Africa
    • Government of South Africa

    Public-Private Partnership Manual, South Africa

    Preface and Table of Contents

    South Africa is amongst the leading countries in the world in the law, policy and systems it has established for public private partnerships. The South African National Treasury’s PPP Manual is a best practice guide for PPP practitioners. Each module of the PPP Manual is issued as a National Treasury PPP Practice Note in terms of the Public Finance Management Act, 1999 (PFMA). It should be read with Standardised PPP Provisions, issued as National Treasury PPP Practice Note Number 01 of 2004.  

    • 2008
    • Government of Peru

    PPP Law: Ley 1012 Peru

    Peru’s former PPP law, legislative decree No.1012 (2008) lays out the process for carrying out a PPP, establishes the criteria for selecting projects and the PPP modality, and defines the steps and responsibilities in project design and approval. For Peru's new PPP law, see: PPP Law, Peru: Decree 1224.

    • 2009
    • Government of Puerto Rico

    Act 29 - Public policy of the Commonwealth of Puerto Rico on PPPs

    In Puerto Rico, the PPP Act (2009) presents a detailed description of the PPP process including conducting initial desirability and convenience analysis, setting up a Partnership Committee to implement the tender process and the PPP contract, and selecting proponents and awarding partnerships.

    • 2011
    • Government of Spain

    Real Decreto Legislativo 3/2011 (Spain)

    Real Decreto Legislativo 3/2011, de 14 de noviembre, por el que se aprueba el texto refundido de la Ley de Contratos del Sector Público Spain’s Public Procurement Law (2011) has a detailed description of the PPP process, including the project appraisal requirements, disclosure requirements at each stage, the approval process, and tendering options. 

    • 2014
    • Asian Development Bank (ADB), World Bank Group (WBG), Inter-American Development Bank (IDB), PPIAF

    Proceso e Instituciones para las APP

    Asociationes Publico-Privadas: Guia de Referencia Version 2.0

For legal and regulatory resources go to PPPIRC

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