Implementing an effective PPP programme

with a focus on international experience –

The case of Greece

Despina Tomadaki

Financial Advisor

Special Secretariat for Public Private Partnerships

Ministry of Economy and Finance

Greece

Transfer of infrastructure

What is a Public Private Partnership ?

Construction and maintenance rights

Banks / shareholders

Special Purpose Vehicle

Debt / Equity

End Users

Availability of the system

Capital/interest dividends

Contracting Authority Ministry of Environment

Yearly availability payments

Usage fees

Allocation of risks

Private Sector: design, construction, financing, operation, maintenance, management risks

Public Sector: regulatory and legal framework

3 major transport concession projects in operation

Their contracts had to be ratified by the Greek Parliament as distinct laws

The Government announced its intention to create a market friendly environment for PPPs

3 years before …

Today…

“…the world’s fastest growingPPP program…”

World Bank, PPPI Days,

Washington, December 2008

What it takes to set up a PPP programme?

Clear legal framework

PPP Unit

Integration of PPPs in government policies

Plan of action & prioritization

Taking care of the funding issue

Briefing the market & educating the public sector

Pipeline of projects

Smooth and transparent tender process

The need for a new legal framework

Need for a legal framework that would enable the wider implementation of PPPs

Overcome the legal gap that led each co-financed project to the Parliament for ratification

Overcome obstacles that delayed the implementation of projects

Framework for the implementation of projects that are not repaid by the end-users (“availability payments)

New legal framework – Law 3389/2005

Result of extensive consultation

“Umbrella” framework

Incentives for the private sector

Clear approval and tendering process for PPP projects

Establishment of Inter-Ministerial PPP Committee

Establishment of a PPP Unit within the Ministry of Economy and Finance

Specialization of government policy for the implementation of PPPs

Regular Members: Minister of Economy and Finance, Minister of Environment –Physical Planning & Public Works and the Minister of Development

Approves projects

The Inter-Ministerial PPP Committee

What it takes to set up a PPP programme?

Clear legal framework

PPP Unit

Integration of PPPs in government policies

Plan of action & prioritization

Taking care of the funding issue

Briefing the market & educating the public sector

Pipeline of projects

Smooth and transparent tender process

PPP Unit

Solid and clear structure

Public sector’s partner

Identification of possible projects

Assistance to public authorities

Standardization of tender documents

Continuous follow-up

Private sector’s partner

In touch with market’s needs

Extroversion

www.ppp.mnec.gr

What it takes to set up a PPP programme?

Clear legal framework

PPP Unit

Integration of PPPs in government policies

Plan of action & prioritization

Taking care of the funding issue

Briefing the market & educating the public sector

Pipeline of projects

Smooth and transparent tender process

Integrating PPPs in government policies

Preparation and finalization of a completeplan of actions

Identification of the primary objectives ofthe PPP Unit, classified both by sector andgeographically

Establishment of clear priorities, as to theprojects that should be implemented first

What it takes to set up a PPP programme?

Clear legal framework

PPP Unit

Integration of PPPs in government policies

Plan of action & prioritization

Taking care of the funding issue

Briefing the market & educating the public sector

Pipeline of projects

Smooth and transparent tender process

Taking care of the funding issue

Segregation of funds to be used for availability payments

Total availability payments of approved projects account for 6 - 7% of Public Investments Program

5th year target: 10-12%

Limit: 15%

What it takes to set up a PPP programme?

Clear legal framework

PPP Unit

Integration of PPPs in government policies

Plan of action & prioritization

Taking care of the funding issue

Briefing the market & educating the public sector

Pipeline of projects

Smooth and transparent tender process

Briefing the market and educating the public sector

Disseminate knowledge

Presentations across Greece

Participation in international conferences

Publication of guides

Internet Site

Seminars for public administration

What it takes to set up a PPP programme?

Clear legal framework

PPP Unit

Integration of PPPs in government policies

Plan of action & prioritization

Taking care of the funding issue

Briefing the market & educating the public sector

Pipeline of projects

Smooth and transparent tender process

Projects’ pipeline

Structure a pipeline of pilot PPP projects

Try implement successful examples

Open different sectors

Group similar projects

Keep same pace with the market

52 projects approved – 5.7 B Euros* NPV

* Indicative Budget

Procedure for the implementation of a PPP project

Procedure for the implementation of a PPP project

I. Public Sector Accommodation

22 projects

Of a total value of 1.687 bn Euros

One project about to reach financial close

4 tenders already launched

II. Education

8 projects

Of a total value of 800 M Euros

4 tenders already launched

III. Justice

2 projects

Of a total value of 360 M Euros

2 tenders already launched

IV. Health

4 projects

Of a total value of 1 bn Euros

1 tender already launched

V. Tourism and sports

3 projects

Of a total value of 340 M Euros

1 tender already launched

VI. Ports Infrastructure

Security systemsn in 12 ports - € 342 M

VII. Environment

3 projects

Of a total value of 450 M Euros

VIII. Defense

5 projects

Of a total value of 420 M Euros

IX. Transportation

2 projects

Of a total value of 140 M Euros

X. Municipal PPP projects

2 projects

Of a total value of 50 M Euros

What it takes to set up a PPP programme?

Clear legal framework

PPP Unit

Integration of PPPs in government policies

Plan of action & prioritization

Taking care of the funding issue

Briefing the market & educating the public sector

Pipeline of projects

Smooth and transparent tender process

Smooth and transparent tender process

Tenders in accordance with EU legislation

Restricted procedure is used (2 phases)

Phase I - EoI : Pre selection of bidders

Phase 2 - Submission of Final offers : Input and detailed output specifications are provided to pre selected bidders

Pre-selection and selection based solely on objective criteria

Minimized bidding costs for contractors

Minimized risks for legal challenges

Conclusion

PPPs have created new opportunities for both public and private sector

Overcome budgetary constraints

Improved public administration

Created long term thinking in both public and private sector

Improved transparency and monitoring of costs of public services delivery

Greece: focal point on the map of PPPs across Southeastern Europe and the Mediterranean Sea

Last remark

Public Private Partnerships have proven to be beneficial not only for the public and the private sector, but…

mainly for the citizens

Contact details

Special Secretariat for PPPs

Ministry of Economy and Finance

Greece

Tel: +30 210 3375750

www.ppp.mnec.gr

e-mail: ppp@mnec.gr