Stephen Harris, direktor, City UKs PPP ans Projects Group - III godisnji JPP samit
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Transcript of Stephen Harris, direktor, City UKs PPP ans Projects Group - III godisnji JPP samit
Stephen Harris
Chairman: TheCityUK PPP and Projects Group
President and Chief Operating Officer
Global Infrastructure Group Ltd
Business Specialist UK Trade and Investment
Public Private Partnerships: Key Lessons for Governments based on the UK and
International Experience
TheCityUK PPP and Projects Group
Set up June 10, 2010 - successor to IFSL group founded in 1999 Chairman: Stephen Harris, Global Infrastructure Group Ltd Secretary: Richard Normington, TheCityUK To be the central co-ordination and information body for enquiries
relating to PPP from overseas To organise meetings, roundtables and visit programmes from
overseas groups. To provide a focal point for UK-based foreign diplomats, trade
envoys and externally organised delegations wishing to conduct visits to the UK.
To provide papers and reports as necessary: including the on-going IFSL reports on European and World PPP trends.
To provide material for press releases, articles for trade journals and other media outlets.
What are Public Private Partnerships?
Definition of PPP
Varies from country to country Covers a wide range of projects where the Public and
Private sectors work together. Key issue is ensuring that you are all talking about the
same form of PPP! Importance of being clear because opponents will try to
confuse the issue
PPP
…is about… Better procurement Public sector reform Better strategic planning Building and maintaining
good infrastructure Public and private
sectors working together Sharing of risks between
most appropriate parties Social change Better public services for
the taxpayer
is not… Free infrastructure Just about finance Just building things Just about involving the
private sector Privatisation, simple
concessions, outsourcing or property development
A method to make a bad project good
from theory to reality key lessons from UK and international experience
KEY LESSON 1:Political Support
High level political support crucial Politicians need to convince their
colleagues Lead and Support Public Sector Reassure and engage with Private Sector Communicate Objectives and Justification
to Public and Media Without High Level Political support their
will be no PPP
KEY LESSON 2:PPP Task Force or Knowledge Centre
Need to invest in the process Money Other Resources
Central, Ministry, Municipal Policy and Project Public and Private sector Facilitate co-operation between different tiers of government and
other PPP units Communication is a key task Advisory role v Regulatory role Needs to be properly resourced
KEY LESSON 3:Legal Framework
Legal framework Flexible
Powers to contract - is a PFI law necessary? Vires Procurement law Regional and Municipal aspects Ownership of Public Utility Assets
Tax Regime
KEY LESSON 4:Communications
Communication of policy by government To different levels of government To press and public –generate an informed
debate To local private sector –must be involved To Unions To international investors and operators
Policy v project Explaining reasons for PPP
Private sector better able Local issues
Trade press
KEY LESSON 5 :PPP Association
PPP Association Czech Republic, Slovakia, Canada, USA, Mexico, Poland, Russia,
France, Japan, Turkey, UK To create a forum for private sector and government organisations
for the development and promotion of PPP models. provides neutral forum to assist government organizations (at Central,
and Municipal level) developing PPP policies to engage with private sector in order to assist in policy and project development including: feedback on the structure and viability of projects, processes and legislation.
builds capacity and understanding in the private sector of PPP so as to encourage the building of a domestic PPP market to service government projects.
develops and encourages internationally recognized, transparent best practice in PPP processes to ensure that projects attract appropriate investment internationally and locally.
educates all sectors of society as to the benefits and issues surrounding PPP and to encourage an informed debate within the country.
KEY LESSON 6:Expert Advisors
Selection of Advisors is critical One of biggest mistakes governments make
Private sector will have good advisors Need international PPP experience
Individuals not just organisation Mentor-type advisors Must be available Cheap, inexperienced advisors are a false economy Beware those who claim experience but have none
KEY LESSON 7:Training
Training for public sector key in order to ensure best value for money National Audit Office EU
Developing internal capacity Reducing reliance on advisors Retaining expertise
Training for private sector
KEY LESSON 8:relationship between public and private sector
PPP should be a Partnership Public and Private sectors have very different drivers
Many relationships between public and private sectors are unbalanced
Problems caused by: Lack of understanding of other party’s key drivers Lack of equality in bargaining power Poor advice or understanding
We see the result in many privatisation, concession and outsourcing deals “Bad” deal damages image of PPP
Of process Or private sector
Fall out can make investors wary of market A PPP programme should aim to give more balance
Between public sector, private sector and citizen
KEY LESSON 9:The Pilot Project
Identify Prioritise Reasonable size Not too technically complex No political ”pet” projects Manageable political sensitivities Clearly defined from the start Realise it will be slow and expensive Incentives to private sector GET IT RIGHT!
KEY LESSON 10:Cost of process
PPP projects usually cost more to procure PPP projects usually cost more to construct Over the whole life of the project the cost is often less
than conventionally procured projects BUT: comparison is often not like with like
KEY LESSON 11:Affordability
PPP does not make a bad project good PPP does not make an unaffordable project affordable
Barts Hospital Over specification
It’s a long term financial commitment The government client mustn’t over extend itself Portugal roads
growth in the international market
international Interest in PPP 1999
International interest in PPP 2012
growth in international interest
Everyone needs infrastructure US needs $1.6trillion in next 5 years
Everyone needs public services A real world-wide market developing More competition for capital, expertise and operators Only the best organised countries will benefit Many markets are disorganised, lacking in expertise and corrupt! UK acknowledged as the world leader
contact details
+44 (0)7702 464 366
Global Infrastructure Group
78 York Street
London
W1H 1DP
United Kingdom
www.globalinfrastructure.co.uk