Governance in Public Private Partnerships for Infrastructure Development - Draft
Summary
These draft Guidelines by the UN Economic Commission for Europe (UNECE) provide recommendations using case studies of specific public private partnerships (PPPs). The document also provides a tool for the implementation of these recommendations through the development of key benchmarks in good governance in PPPs that define the criteria for success, and further propose a certification scheme for improving good governance in PPP projects.
Public Private Partnerships are becoming increasingly commonplace for infrastructure development. However, during the course of their development and operation, such projects frequently encounter problems resulting from a lack of governance. This lack of governance makes PPPs more expensive for the government and less attractive for potential investors. It decreases the benefits – fiscal, social and economic etc. – that can be drawn and increases the risks – political, contractual and financial, etc. Improving governance can help maximize the benefits and minimise the risks in PPPs. Improvement in governance requires governments to acquire new skills in public management and to establish new institutions and procedures. Governments will need to focus on supervision and regulation, rather than on direct ownership and controls.
One technique to assist governments and the private sector to acquire this new expertise is through benchmarking best practices in specific projects. Benchmarking of the procedures and practices involved in delivering PPP projects can highlight what needs to be done to meet the new public management standards. It allows the key stakeholders in PPPs, i.e., the government, the private sector, the employees and NGOs, to measure their performance in improving governance in PPPs. It can increase the attractiveness of countries to foreign investors as well as ensuring that the projects will be successful. Currently, there are few, if any, mechanisms for benchmarking the achievement of governance in PPP projects. The UNECE PPP Alliance, in response to this challenge, has worked to provide an innovative benchmarking scheme whereby progress within the key areas of transparency, public accountability and sustainable development can be measured. The PPP Alliance has been working with PPPs since the 1990s, and was a pioneer in creating the basic building blocks of PPPs. The UNECE PPP Alliance is in a unique position because of its close connections with both government and the PPP industry.
This document contains many references to real-world PPPs to illustrate the central themes of the report, and the full case studies are included as an annex.