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Good Governance in PublicPrivate Partnerships

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... study II: Money and Ownership. UNECE ... And apply for money. They get the money! Our idea becomes their' idea! ... Money talks? Does the end justify the ... – PowerPoint PPT presentation

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Title: Good Governance in PublicPrivate Partnerships


1
Good Governance in Public-Private Partnerships
  • Mr. Geoffrey Hamilton
  • Chief, Cooperation and Partnerships Section
  • United Nations Economic Commission for Europe
  • __________________________________________________
    ____________
  • Advancing public-private partnerships for
    e-business standards
  • Geneva, 18-19 September 2008

2
POSITION IN A NUTSHELL
  • Governance deals with the grey areas in
    relations between organizations
  • It brings to the fore issues of trust and
    personal integrity
  • No easy right and wrong answers/ rules
  • But governance does matter and needs to be
    addressed

3
Governance issues arise in the UN
  • Case study 1 Contract to external supplier
  • After docs prep, the Steps to follow
  • 1. Ensure that you have the funds allotted in the
    correct budget line of the project/trust fund/UN
    Dev.account - DONE
  • 2. Signed and agreed TOR and estimated budget
    from UNDP Moscow, Russian Fed and UNECE (ECID and
    EO)
  • 3. Email showing the agreement of UNDP Moscow,
    Russian Fed to organize the seminar/workshop
    based on agreed TOR and estimated budget.
  • 4. Based on 1,2 3 above, you can then prepare
    in IMIS pre-encumbrance document (General
    reservation of funds (GROF)) to commit the total
    organization costs of the seminar/workshop.
  • 5. EO will prepare the OBMO (Miscellaneous
    obligating document) and submit to UNOG FRMS for
    approval.
  • 6. Once OBMO is approved, EO will prepare the
    financial cable to UNDP Moscow, Russian Fed for
    UNOG FRMS's approval authorizing them to
    organize/arrange the seminar per TOR/budget.
  • HOW MUCH WAS THE CONTRACT FOR?

4
Case study II Money and Ownership
  • UNECE has the big idea !
  • Goes to the Multilaterals for support
  • They like it! And apply for money
  • They get the money!
  • Our idea becomes their idea!

5
Lessons and questions
  • No easy answers
  • Personal fury, morality, integrity versus wider
    dissemination of a public good
  • Logos do not matter at the end of the day?
  • Money talks?
  • Does the end justify the means?

6
WHAT IS A PPP?
  • The term PPP is used internationally with a wide
    variety of meanings, but for this purpose…
  • PPP private investment in public infrastructure
  • long-term service provision
  • risk transfer to private sector
  • An old concept which has found a new life
  • Concession model
  • … the user pays (tolls, fares, etc.)
  • Based on legislation contract
  • N.B Many PPPs outside UK are Concessions
  • UK Private Finance Initiative (PFI) model
  • … the public sector pays
  • Contract-based (may be in legislative framework)
  • N.B In some countries only this model is called a
    PPP
  • PPPs v. privatisation
  • No transfer of public ownership
  • Public sector remains accountable
  • Contract-based not regulator based

7
WHY PPP?
WHY PPP?
  • Access to capital
  • Certainty of Outcome
  • Off balance sheet borrowing
  • Innovation
  • Transfer of risk

8
THE GROWTH OF PPPs IN EMERGING MARKETS
  • 3 Distinct Evolutionary Phases

9
PPP MARKET MATURITY CURVE
10
KEY CHALLENGE Improving governance and
institutional certainty
  • TO AVOID
  • Protracted negotiations
  • Lack of transparency in partner solution
  • Conflict of interest
  • Cancellation of projects
  •  

11
UNECE GUIDELINES ON PROMOTING GOOD GOVERNANCE IN
PPPS 7 PRINCIPLES
  • A coherent PPP policy
  • Strong enabling institutions
  • Legal framework fewer, better, simpler
  • Cooperative risk sharing and mutual support
  • Transparency in partner section
  • Putting people first
  • Achieving sustainable development

12
Misconceptions…
No! You need a policy framework with direction,
responsibilities and goals. PRINCIPLE 1. POLICY
PPP pilots will start the process…
13
Principle 1. PPP Policy
  • A PPP Policy is needed to fix a roadmap
  • Strong social objectives, e.g. increasing
    accessibility for disadvantaged
  • Core values and principles (fairness,
    continuation of services, improved quality)
  • Consultation within Government
  • Consult investor community
  • Identify the right projects to get started

14
Misconceptions…
No! You need to build the skills within the
government and set up the right
institutions. PRINCIPLE 2. CAPACITY BUILDING
PPPs focus on ring fencing the project…
15
Principle 2. Capacity-Building
  • INTERNALLY
  • Train personnel for the required skills for PPPs
  • Establish PPP Unit
  • Offer National PPP training programmes,
    guidelines
  • EXTERNALLY
  • At same time use qualified consultants to help
    on projects

16
Misconceptions…
No! Overall framework should be simpler, fewer
and better. PRINCIPLE 3. LEGAL
PPPs … prescriptive rules and tight control…
17
Principle 3. Legal Fewer, better and simpler
  • Fewer laws - removal of constraints
  • Better laws - knowable, secure and predictable
  • Simpler laws - bundling projects, competitive
    dialogue

18
Misconceptions…
No! Governments must assume some risk and offer
some subsidy. PRINCIPLE 4. RISK SHARING
PPPs provide assets to governments at no risk and
no cost
19
Principle 4. Risk
  • Cooperative sharing and mutual support
  • Risk sharing key to PPP success
  • No science to allocating risks
  • Yes to some government subsidy but with care

20
Misconceptions…
No! Competition allows for the best partner and
the best project. PRINCIPLE 5. PROCUREMENT
PPPs …no tender required…
21
Principle 5. Procurement
  • Open and transparent
  • Opportunities should be made public
  • Non-discrimination
  • Zero tolerance to corruption
  • Choosing the right partners

22
Misconceptions…
No! People have to be put first. PRINCIPLE 6.
PUTTING PEOPLE FIRST
Keep people out they do not understand the
technical matters…
23
Principe 6. Putting People First
  • Define the public interest
  • Consult with people
  • Inform disclose information in contracts
  • Oversee by objective third party
  • Involve independent auditors

24
Misconceptions…
No! Project can make profit and achieve social
and environmental goals. PRINCIPLE 7.
ENVIRONMENT
…you have to choose between profit and social and
environment development…
25
Principle 7. Environment
  • The Green case works for PPPs
  • Provide incentives to the private sector to adopt
    green criteria
  • Avoid politically correct add ons that mean
    nothing

26
CASE STUDIES
  • Demonstrate that projects which apply
  • the Good Governance principles achieve success…
  • Canada The Vancouver Landfill Project
  • France The Centre Hospitalier Sud Francilien
  • Israel The Cross-Israel Highway
  • Tajikistan The Pamir Power Project
  • USA The Chesapeake Forest Project

27
KEY Learnings for ACHIEVING SUCCESS In Improving
Goverance commitment to training of public
administration…
  • Situation today in transition economies
  • there are few capacity-building programmes
  • No practical training for policy makers and
    implementers
  • Numerous international conferences on PPPs but no
    substitute for real practical hands-on training

28
Key learnings contd…
  • Create institutions that facilitate
  • Open decision-taking
  • Transparency and accountability

29
  • IN CONCLUSION
  • Poor governance will ruin what you want to
    achieve even e-business standards…
  • End does not justify the means
  • You must deal with the governance issue
  • It is sometimes good to become personally
    furious

30
THANK YOU FOR YOUR ATTENTION!
  • FOR MORE INFORMATION
  • Please visit http//www.unece.org/ceci/ppp.html
  • Or contact geoffrey.hamilton_at_unece.org
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