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"#$"B%&$' C&"()*+,"-
GLOBAL SOLUTIONS FOR PUBLIC PRIVATE PARTNERSHIPS
Preface  

I  am  an  independent  consultant  specialized  in  Public  Private  Partnerships  commonly  
referred  to  as  PPP.  
I  believe  that  PPP  can  significantly  enhance  the  effec<veness  and  efficiency  of  public  
service  provisions.  Provided  that  the  environment  for  PPP  is  enabling  and  that  projects  are  
well  prepared  taking  into  considera<on  aspects  like  bankability,  affordability  and  value  for  
money.  
My  mission  is  to  support  the  public  and  private  sector  on  implemen<ng  PPP.  I  have  done  
so  for  more  than  a  decade  throughout  the  world  and  want  to  con<nue  as  such  for  a  long  
<me.  
This  paper  outlines  my  view  on  the  concept  of  PPP  and  its  main  benefits  but  also  its  
challenges  and  consequent  cri<cal  success  factors.  It  is  just  a  personal  perspec<ve  based  
on  my  experiences,  which  cover  some  100  PPP  projects  in  over  30  countries,  and  
corresponding  research,  reflec<ng  as  such  my  way  of  working.    
It’s  part  of  a  series  of  my  views  which  aim  to  address  the  most  cri<cal  aspects  for  
successful  development  of  PPP.  Just  for  inspira<on.  

Marcel  van  den  Broek  

2  
Contents  

I.  Defining  PPP  

II.  Accelera<ng  Investments  

III.  Value  for  Money  

IV.  No  Guarantee  for  Success  

V.  Cri<cal  Success  Factors  

3  
I.  Defining  PPP  

II.  Accelera<ng  Investments  

III.  Value  for  Money  

IV.  No  Guarantee  for  Success  

V.  Cri<cal  Success  Factors  

4  
No  Common  Defini<on  for  PPP  
Though  no  major  inconsistencies  in  the  universal  understanding  of  the  concept  

PPPs  refer  to  arrangements  under  which  the  private   An  arrangement  between  two  or  more  en<<es  that   A  coopera<ve  venture  between  the  public  and  
sector  supplies  infrastructure  assets  and   enables  them  to  public  service  work  coopera<vely   private  sectors,  built  on  the  exper<se  of  each  
infrastructure  based  services  that  tradi<onally  have   towards  shared  or  compa<ble  objec<ves  and  in   partner,  that  best  meets  clearly  defined  public  
been  provided  by  the  government   which  there  is  some  degree  of  shared  authority  and   needs  through  the  appropriate  alloca<on  of  
IMF:  PPPs,  Government  Guarantees  and  Fiscal   responsibility,  joint  investment  of  resources,  shared   resources,  risks  and  rewards.  
Risks   risk  taking  and  mutual  benefit     The  Canadian  Council  for  Public-­‐Private  
United  Kingdom  HM  Treasury,  1998   Partnerships    

A  PPP  is  a  long-­‐term  contract  between  the  public   PPP  is  a  contract  between  a  government  ins<tu<on   Public  Private  Partnership  (PPP)  Project  means  a  
and  private  sectors  where  government  pays  the   and  a  private  party  where  the  laYer  performs  an   project  based  on  a  contract  or  concession  
private  sector  to  deliver  infrastructure  and  related   ins<tu<onal  func<on  and/or  uses  state  property,   agreement,  between  a  Government  or  statutory  
services  on  behalf,  or  in  support,  of  government’s   and  where  substan<al  project  risks  are  passed  to   en<ty  on  the  one  side  and  a  private  sector  
broader  service  responsibili<es.   the  third  party.   company  on  the  other  side,  for  delivering  an  
Australia:  NaJonal  Public  Private  Partnership   South  Africa   infrastructure  service  on  payment  of  user  charges.  
Policy  and  Guidelines  2008   India  

A  partnership  is  an  arrangement  between  two  or   PPPs  broadly  refer  to  long-­‐term,  contractual   a  ‘partnership’  style  approach  to  the  provision  of  
more  par<es  who  have  agreed  to  work   partnerships  between  the  public  and  private  sector   infrastructure  as  opposed  to  an  arm’s  length  
coopera<vely  toward  shared  and/or  compa<ble   agencies,  specifically  targeted  towards  financing,   ‘supplier’  rela<onship.  PPP  involves  a  sharing  of  risk,  
objec<ves  and  in  which  there  is  shared  authority   designing,  implemen<ng,  and  opera<ng   responsibility  and  reward,  and  is  undertaken  in  those  
and  responsibility;  joint  investment  of  resources;   infrastructure  facili<es  and  services  that  were   circumstances  when  there  is  value  for  money  benefit  
shared  liability  or  risk-­‐taking;  and  ideally,  mutual   tradi<onally  provided  by  the  public  sector   to  the  taxpayers    
benefits   Asian  Development  Bank,  2006   The  World  Bank,  2003  
European  Commission,  2003  

5  
PPP  is  an  Alterna<ve  Delivery  Scheme  for  Public  Services  
PPP  versus  Tradi<onal  Procurement  
TradiJonal  Procurement   PPP  

•   Public  sector  bears  all  risk  of   •   Risks  distributed  between  public  
Risk   undertaking  project   sector  and  private  sector  

Project   •   Public  sector  is  responsible  for  all   •   Private  sector  manages  overall  project  
Management   project  management  roles  and   and  interfaces  
interfaces  

Performance   •   Public  sector  accountable  for   •   Private  sector  takes  responsibility  for  
Management   performance  and  long  term   design,  construc<on,  maintenance  and  
maintenance   possibly  even  opera<ons  
•   All  project  related  costs  (capital   •   Users  pay  for  services  or  public  sector  
Payments   and  opera<onal  paid  by  public   pays  for  service  subject  to  predefined  
sector   performance  criteria  
•   Public  sector  responsible  for   •   Private  sector  responsible  for  funding  
Financing   securing  finance   through  arranging  debt  and  issuing  
equity  

6  
Modes  of  PPP  
Defined  by  nature  of  risk  alloca<on  

PPP  Model   Management   OperaJons   BOT  Annuity   BOT   BOOT  

Contract   Concession   DBFM   DBFO   BOO  
Risks  

Asset  

Construc<on  

Demand  

Performance  

               Public   Brownfield  PPP   Greenfield  PPP  

               Private   (exis<ng  infrastructure)   (new  infrastructure)  
Source:  VandenBroek  Consul<ng  2010  

*Design,  Build,  Finance,  Maintain,  Operate,  Own,  Transfer  

7  
Contractual  Structure  
Structure  is  generic,  though  payment  mechanism  differs  per  mode  of  PPP  

1   In  case  of  DBFO/BOT  or  

Contrac<ng   Opera<ons  concessions  where  
Authority   the  demand  risk  is  transferred  
to  the  private  sector    
Tendering  and  awarding  the  right   In  case  of  DBFM/Annuity  or  
2  
to  deliver  public  infrastructure   2   Paying  a  fee  for  the   Management  contracts  where  
service  provided  
and  or  public  services   the  demand  risk  is  transferred  
to  the  public  sector  *  

Investors  
Providing  funds  
for  investments   PPP  Company  
(or  Special   1   Users  
Purpose  Vehicle)   Paying  a  fee  for  the  
Banks   service  provided  

Designing  and  construc<ng  the  infrastructure   Maintaining  and  opera<ng  the  

asset  (in  case  of  new  infrastructure)   infrastructure  asset  

Contractor   Service  Provider  

*It  is  also  possible  that  users  pay  a  fee  for  the  service  provided  to  the  public  sector  and  that  the  public  sector  
uses  this  income  to  pay  an  availability  or  annuity  fee  to  the  PPP  Company     8  
I.  Defining  PPP  

II.  Accelera<ng  Investments  

III.  Value  for  Money  

IV.  No  Guarantee  for  Success  

V.  Cri<cal  Success  Factors  

9  
Infrastructure  Deficit  
Many  countries  have  insufficient  infrastructure  spending  
November  26,  2007  
Canada’s  $123  billion  municipal  infrastructure  deficit  is  not  the  final  price  
tag  for  all  its  infrastructure  needs,  says  a  construc<on  industry  official.  The  
$123  billion  is  huge  number  but  that  is  just  part  of  the  story,”  says  Jeff  
Morrison,  Canadian  Construc<on  Associa<on  “ That  just  looks  at  the  
rehabilita<on  of  the  exis<ng  stock.  It  does  not  include  the  price  of  new  
infrastructure  needed  to  add  capacity  and  expand  systems.”  

7.5  -­‐  9.0%   Federal  Finance  Minister  Lindsay  Tanner  has  warned  the  government  won't  
be  spending  lavishly  to  address  a  huge  infrastructure  deficit  that  could  top  
$750  billion  because  of  popula<on  growth.  But  the  government  was  
5.5  -­‐  7.0%   making  some  headway  with  a  $22  billion  investment  in  its  2009/10  budget,  
he  told  an  infrastructure  conference  in  Sydney  on  Wednesday.  

June  19,  2008    

3.0%   Over  the  past  several  decades,  we  have  accumulated  a  sizeable  public  
4.0%   infrastructure  deficit.  As  a  result,  a  variety  of  infrastructure  boYlenecks-­‐
2.9%   traffic  congested  roads,  clogged  ports,  and  an  an<quated  air  traffic  system,  
2.6%   to  men<on  just  a  few-­‐have  begun  to  undercut  our  economy's  efficiency  and  
undermine  our  quality  of  life.    
Tes<mony  Before  the  House  CommiYee  on  Transporta<on  and  Infrastructure  
By  Bernard  L.  Schwartz  (New  America  Founda<on)    
Low  Income   Middle  Income   High  Income  
Countries   Countries   Countries   “  the  infrastructure  gap  in  the  country  was  holding  back  economic  growth  
by  1.5-­‐2  per  cent  every  year”    
Actual   Needed   Mr  P.  Chidambaram,  Minister  of  Finance  India  
Source:  World  Bank  2006  

10  
Fiscal  Constraints  
Limit  possibility  to  increase  infrastructure  spending  

Canada:  60.8%   UK:  47.2%   Germany:  62.6%   Russia:  6.8%  

$  814  billion   $  1.1  trillion   $  1.8  trillion   $  151  billion  

2.5%   14.2%   4.4%   8.1%   Japan:  170.4%  

France:  67.0%   $  7.5  trillion  
US:  60.8%   $  1.4  trillion   7.6%  
$  8.7  trillion   8.2%  
11.9%  

Public  debt  as  

India:  78%   percentage  of  GDP  
$  2.5  trillion  
8.1%  

Argen<na:  51%  
$  294  billion  
Public  Debt  as  percentage  of  GDP  2009  
1.3%  
Public  Deficit  as  percentage  of  GDP  2009  

Sources:  CIA  Factbook  2007  and  2010,  Visualeconomics  

11  
Private  Infrastructure  Finance  
Significant  growth  in  the  developing  world  to  support  funding  of  infrastructure  deficit  

160,000  
Europe  and  Central  &  
Investment  in  Physical  Assets  in  USD  million  

140,000   South  Asia  have  been  

emerging  in  the  past  
120,000   decade  
CAGR  17%  
100,000  

80,000  

60,000  

40,000  

20,000  

0  
1990  1991  1992  1993  1994  1995  1996  1997  1998  1999  2000  2001  2002  2003  2004  2005  2006  2007  2008  

East  Asia  and  Pacific   Europe  and  Central  Asia   La<n  America  and  the  Caribbean  
Middle  East  and  North  Africa   South  Asia   Sub-­‐Saharan  Africa  
Sources:  PPIAF  database  

12  
Private  Infrastructure  Finance  
…and  also  in  some  of  the  matured  economies  

e.g.  mainland  Europe   e.g.  UK    

Value  of  projects  contracted  in  €  billion)   Value  of  projects  contracted  in  £  billion    

CAGR  
CAGR   21%  
17%  
8.92  
9.61  
7.37   7.35  
8.19  
7.32  
6.54  
4.95   4.96  
4.73   5.25  
4.26  
3.32   3.46  
2.21   2.48   2.4  
1.29   1.05   1.17  
0.70   0.43  
2001   2002   2003   2004   2005   2006   2007   2008   1995   1996   1997   1998   1999   2000   2001   2002   2003   2004   2005   2006   2007   2008  

Sources:  Public  Private  Finance  

13  
 PPP  Leaders  
Delivering  some  10-­‐30%  of  their  infrastructure  services  through  PPP  

120   935   1000  

100   900  
100  
800  
Value  of  projects  in  billion  USD  

700  

Number  of  Projects  

80  
600  

60   450   55   500  
50   400   50  
400  
40   32   300  
215  
200  
20   126  
100  
100  
19  
0   0  
UK  2008   India  2009   Korea  2010   Mainland  Europe   Australia  2005   Canada  2010   South  Africa  
2001  -­‐2008   2009  

Value  of  Projects  (in  USD  billion)   Number  of  Projects  

Sources:  www.pppindindiadatabase.com,  University  of  Sydney,  IFSL,  The  

Conference  Board  of  Canada,  Na<onal  Treasury  South  Africa,  Ministry  of  Strategy  
and  Finance  in  Korea   14  
I.  Defining  PPP  

II.  Accelera<ng  Investments  

III.  Value  for  Money  

IV.  No  Guarantee  for  Success  

V.  Cri<cal  Success  Factors  

15  
Infrastructure  Risks  
Delivering  infrastructure  through  tradi<onal  procurement  imposes  severe  risks  on  the  public  
sector  
Cost  overruns   Delays   Less  demand  (e.g.  roads)  
Percentage  of  Projects   Percentage  of  Projects   Actual  as  percentage  of  Forecast  

KPMG's  review  of   EIB  review  of  50   Li  Hensche's  review  

1,035  projects  in   40%   projects  with  delay   60%   of  8  toll  roads  in   55%  
India   >  1  year   Australia  

NAO's  review  of   Vassallo's  review  of  

NAO's  review  of  
cost  overruns  in  the   73%   70%   14  toll  roads  in   65%  
delays  in  the  UK  
UK   Spain  

Flyvbjerg's  Review   KPMG's  review  of   S&P  review  of  first  

of  258  projects   90%   1,035  projects  in   82%   year  traffic  on  105   75%  
worldwide   India   toll  roads  

*Research  results  are  presented  merely  for  the  purpose  of  stressing  the  risk  factors  of  infrastructure.  The  
results  are  no  indicator  for  a  government’s  ability  to  deliver  infrastructure  as  the  underlying  methodology  and  
assump<ons  for  the  different  studies  are  different  and  not  quite  comparable.  

Sources:  Flyvbjerg  2003,  KMG  2010,  NAO  2005,  EIB  2005,  Vassallo  2007,  
Standards  &  Poor  2005,  Li  &  Hensche  2009  
16  
Effec<ve  Delivery  
PPPs  can  provide  Value  for  Money  by  delivering  infrastructure  more  on  <me  and  more  on  
budget.  
On  Time  Delivery   On  Budget  Delivery  
Percentage  of  Projects   Percentage  of  Projects  

85%   75%  
Tradi<onal   Tradi<onal  
53%   83%  

99%   97%  
PPP   PPP  
99%   100%  

Australia   UK   Australia   UK  

Sources:  MoYMcDonald  2002,  Allen  Consul<ng  2007  

17  
Cost  Savings  
PPPs  can  reduce  life  cycle  costs  up  to  10-­‐30%,  though  the  methodology  to  assess  this  is  subject  
to  discussion  
Average  Cost  Savings  of  PPP  versus  TradiJonal   Public  Sector  Comparator  into  PerspecJve  
Public  Sector  Comparator  Outcome   Tool  to  assess  value  for  money    

Pros  
⊕  Ra<onalizes  use  of  PPP  
Australia   28%  
⊕  Helps  scoping  and  structuring  the  PPP  
⊕  Supports  selec<ng  the  most  aYrac<ve  bid  
UK   20%  
Cons  
⊖  Public  sector  alterna<ve  is  merely  
hypothe<cal  given  absence  of  public  funds  

Netherlands   11%   ⊖  Assessment  is  highly  tenta<ve  as  it  requires  

es<ma<ng  long  term  costs  and  revenues  and  
given  the  lack  of  consensus  on  the  discount  
rate    

Sources:  UK  Na<onal  Audit  Office,  Melbourne  University,  Rijkswaterstaat,  Dutch  

Ministry  of  Finance  
18  
Performance  Improvement  
PPPs  can  improve  the  quality  of  public  service  delivery  

e.g.  in  Electricity  and  Water  DistribuJon   or  in  availability  payment  based  PPPs  
Review  of  301  u<li<es  with  PSP  and  926  state-­‐owned  enterprises  (SOEs)   Review  of  151  projects  in  the  UK  and  41  projects  in  Scotland  
over  more  than  a  decade  of  opera<on  in  71  developing  and  transi<on  
economies.     •  96  percent  of  project  managers  considered  PPP  
•  12  percent  increase  in  residen<al  connec<ons   sa<sfactory  or  beYer  with  73  percent  even  good  
for  water  u<li<es     to  very  good  (UK)  
•  29  percent  increase  for  electricity  distribu<on   •  92  percent  of  users  considered  infrastructure  
companies     services  delivered  via  PPP  to  be  of  acceptable  
•  19  percent  increase  in  residen<al  coverage  for   standards  (UK)  
sanita<on  services     •  91  percent  of  authori<es  was  sa<sfied  with  the  
•  18  percent  increase  in  water  sold  per  worker   availability  of  the  infrastructure  (Scotland)  
(following  the  introduc<on  of  concession   •  56  percent  of  authori<es  believe  that  the  
contracts)  and  a  32  percent  increase  in   contract  offers  good  or  excellent  value  for  
electricity  sold  per  worker     money  (Scotland)  
•  45  percent  increase  in  bill  collec<on  rates  in  
electricity  
•  11  percent  reduc<on  in  distribu<on  losses  for  
electricity  (following  par<al  dives<tures)  and    
•  41  percent  increase  in  the  number  of  hours  of  
daily  water  service.   Sources:  PPIAF  2009,  Ipsos  Mori  2009,  Cambridge  Economic  Policy  
Associates  2005  
19  
Transac<on  Costs  
Cost  of  PPP  transac<on  are  more  than  10%  of  capital  costs  for  both  the  public  and  the  private  
sector  and  tend  to  be  three  <mes  higher  than  in  the  tradi<onal  procurement  case  
Total  TransacJon  costs  for  PPP  between  8  and  20%   Higher  than  for  tradiJonal  procurement  
Average  transac<on  costs  as  percentage  of  capital  costs  based  on   Private  sector  transac<on  costs  as  percentage  of  project  costs  
review  of  55  projects  in  the  UK   for  different  project  size  categories  
0.61%  
0.58%  

0.48%   0.50%  

4  –  7%  

3  -­‐  6%  
0.13%  
0.09%  
0.06%   0.04%  
1  -­‐  7%  

Public  Sector   Winning  Bidder   Failed  Bidders   GBP  0  -­‐  25   26-­‐50   51  -­‐  100   101  -­‐  200  

PPP   Tradi<onal  

Sources:  EIB  2005,  Adam  Smith  Ins<tute  1996  

20  
Cost  of  Capital  
Cost  of  public  finance  appear  to  be  lower  than  cost  of  private  finance,  but  are  they  really?  
Public  Finance   Private  Finance  

•   Cost  of  capital  is  defined  by  the   •   Cost  of  capital  is  defined  by  the  risk  
At  first  sight   risk  free  interest  rate   free  rate  plus  a  risk  premium  investors  
approximated  by  the  interest  rate   and  banks  require  for  the  risks  they  
on  government  bonds   incur  

Underlying   •   creditworthiness  of  the  respec<ve   •   risk  profile  of  the  project  
driver   authority  

•   All  project  risks  are  borne  by  the   •   All  project  risks  are  borne  by  the  
Consequence   tax  payers   capital  providers  

•   Cost  of  capital  in  case  of  public   •   cost  of  capital  in  case  of  private  
Conclusion   finance  should  include  a  risk   finance  takes  project  risks  into  account  
premium  

*The  issue  of  cost  of  capital  and  related  discount  rates  for  the  purpose  of  value  for  money  analysis  is  ongoing  
subject  of  discussion  among  PPP  prac<<oners  and  has  not  yet  lead  to  consensus  on  an  appropriate  viewpoint.    
21  
I.  Defining  PPP  

II.  Accelera<ng  Investments  

III.  Value  for  Money  

IV.  No  Guarantee  for  Success  

V.  Cri<cal  Success  Factors  

22  
PPPs  can  Fail  
In  transport  infrastructure  

Toll  Roads  in  Mexico   M1/M15  in  Hungary  

•  Between  1987  and  1995,  52  projects  (25   •  Hungary  M1/M15  was  the  first  toll  motorway  
compe<<vely  tendered)  was  awarded  (largest   tendered  and  implemented  in  Central  and  
PPP  toll  road  program  at  the  <me)   Eastern  Europe.  
•  Construc<on  cost  overruns  averaged  25%  and   •  Traffic  volumes  were  about  40%  lower  than  
average  actual  revenues  were  about  30%   an<cipated,  despite  the  forecasts  being  
below  forecasts  (only  5  projects  met  or   prepared  by  independent  experts.  
exceeded  targets)   •  Because  of  the  presence  of  a  nearby  free  
•  Average  toll  road  fee  increased  from  US$  0.02/ alterna<ve.  
km  to  US$  0.17  azer  concessioning   •  As  a  result,  the  concessionaire  was  unable  to  
•  Government  took  over  23  projects  and  paid   service  its  debt  and  ul<mately  the  government  
outstanding  debt  to  Mexican  Banks  (about  US$   had  to  take  over  the  concession  at  a  high  cost.  
5  billion)  and  construc<on  companies  (about  
US$  2.6  billion)  

Sources:  World  Bank  2009  

23  
PPPs  can  Fail  
In  social  infrastructure  

Hospitals  in  Australia   Hospitals  in  Canada  

•  The  Victoria  government  contracted  with   •  In  2008  the  AbboYsford  Regional  Hospital  and  
consor<a  to  develop  three  major  PPP  hospitals   Cancer  Centre  was  delivered  as  a  PPP.    
in  the  mid-­‐90s.   •  To  date  the  government  has  spent  over  $7  
•   Under  the  terms  of  the  contract,  the  consor<a   million  in  administra<ve  costs  to  pursue  
had  to  accept  public  medicare  pa<ents  without   projected  savings  that  were  ini<ally  es<mated  
extra-­‐billing.  The  consor<a  agreed  to  provide   at  $3  million  over  the  length  of  the  30+  year  
services  at  96%  of  the  cost  for  public  hospitals.     contract.    
•  The  government  had  to  buy  back  the  hospital   •  Construc<on  costs  have  increased  from  $210  
from  Australian  Hospital  Care  in  October  2000   million  to  $355  million,  and  the  annual  
azer  the  consor<um  lost  $10  million  on  the  La   opera<ng  lease  for  the  private  sector  
Trobe  Hospital  and  announced  it  was  suing  the   contractor  has  doubled  from  $20  million  to  $41  
government.   million.    
•  Legal  and  consultant  costs  for  this  deal  are  
budgeted  at  $24.5  million  which  will  be  paid  by  
the  public.  

Sources:  Canadian  Centre  for  Policy  Alterna<ves  2006,Metro  Valley  Newspaper  

Group  
24  
PPPs  can  Fail  
..and  even  in  the  most  matured  PPP  markets  

Eurotunnel  between  UK  and  France   The  London  Underground  

•  In  1986,  the  Euro  tunnel  group  was  founded  to   •  In    2003  the  London  Underground  began  
carry  out  a  joint  project  between  the  United   opera<ng  as  a  PPP,  whereby  the  infrastructure  
Kingdom  and  France  to  build  a  rail  tunnel  under   and  rolling  stock  were  upgraded,  maintained  
the  English  Channel.     by  two  private  companies  (Metronet  and  Tube  
•  The  es<mated  cost  of  the  project  was  £4.9bn   Lines)  under  30-­‐year  contracts  
but  the  final  cost  to  complete  the  project  was   •  The  £30  billion  scheme  was  put  in  jeopardy  
around  £10bn  which  is  double  the  projected   when  Metronet,  went  into  administra<on  in  
cost.  The  business  thereazer  failed  meets  its   2007  azer  costs  for  its  projects  spiralled  out  of  
running  costs  by  genera<ng  adequate  passenger   control  leading  to  a  cost  overrun  of  2  billion  
and  cargo  traffic  to  meet  its  forecasts.  There   •  The  government  took  over  the  responsibili<es  
were  many  reasons  for  this  failure.   of  Metronet  following  its  collapse.  
•  Consequently,  company  struggled  to  pay  its  
financial  obliga<ons  and  the  debts  had  to  be  
restructured  leading  to  high  write  offs  with  the  
involved  banks  

Sources:  NAO  UK  

25  
I.  Defining  PPP  

II.  Accelera<ng  Investments  

III.  Value  for  Money  

IV.  No  Guarantee  for  Success  

V.  Cri<cal  Success  Factors  

26  
PPP  Policy  
Ensure  a  cohesive,  coherent  and  comprehensive  policy  tailored  to  your  objec<ves  

Assess   Formulate   Facilitate     Implement     Monitor  

the  situa<on  and  analyse   objec<ves  to  address   policy  through   policy  by  alloca<ng   implementa<on  of  policy  
problems  and  recognise  issues   problems  and  define   development  of   resources  and   by  appropriate  
program  to  meet   suppor<ng  instruments   responsibili<es   mechanisms  
objec<ve  

Infrastructure   Goal  Analysis   InsJtuJonal  Sefng   Budget  AllocaJon   Fiscal  Risk  

Adequacy  Assessment   What  do  we  want  to   To  ensure  adequate  skills  and   To  provide  the  necessary   Management  
To  assess  adequacy  of   achieve  with  PPP     competencies  and  clear   resources  for   Iden<fy,  value  and  monitor  
capacity,  quality  and   responsibili<es  for  preparing   implementa<on  of  policy   fiscal  risks  arising  from  PPP  
delivery   and  implemen<ng  projects  

Affordability   Programming   Financial  Instruments   CommunicaJon  and   Performance  

Assessment     Where  and  how  do  we  want   To  facilitate  effec<ve  and   Training   Measurement  
To  assess  available  fiscal   to  apply  PPP   efficient  access  to  private   To  ensure  that  all   Measure  outcome  of  policy  
space  and  user’s  willingness   capital   stakeholders  are  informed   and  match  with  iden<fied  
to  pay   and  understand  how  to  act   objec<ves  

PPP  Readiness   ConsultaJon   LegislaJon  and  or   Commitment   Adapt  

Assessment     To  ensure  that  all  major   Guidance   To  ensure  effec<ve  and   If  circumstances  change  or  
To  iden<fy  any  major   stakeholders  agree  and   To  provide  an  enabling   efficient  delivery  of  the   policy  is  not  effec<ve  or  
constraints  for  PPP  or  areas   commit  to  the  objec<ves   environment  and  clear   policy   efficient  revise  policy  
for  further  improvement   and  program   instruc<ons  to  all  actors  

Sources:  VandenBroek  Consul<ng  2010  

27  
PPP  Life  Cycle  
Ensure  bankable  and  affordable  PPPs  that  provide  value  for  money  and  apply  transparent  and  
compe<<ve  bidding  procedures  and  adequate  monitoring  mechanisms  
Ensure  that  the  scope  of  your   Ensure  that  your  project  is   Ensure  that  your  project  is  
Iden<fy  your  PPP   project  is  clear     adequately  jus<fied   suitable  for  PPP  

organize  your  team  and  decision  

organize  your     Retain  and  manage  advisers     Plan  your  ac<vi<es  and  decisions  
makers    
PPP  
Understand  the  op<ons  for   Analyse  op<ons  and  design  the   If  applicable  op<mise  the  structure  
Structure  your     structuring  PPP   most  suitable  structure   with  financial  instruments  
PPP  
Understand  the  op<ons  for   Define  selec<on  and  award   Analyse  op<ons  and  design  most  
Design  the     tendering  PPP   criteria   suitable  tender  strategy  
tender  strategy  
Manage  the  public  opinion   Assess  the  environmental  impact   Design  land  acquisi<on  strategy  
Engage    
stakeholders  
Draz  the  PPP  contract   Complete  the  tender  documents   Market  your  PPP  to  the  industry  
Prepare  your      
tender  
Understand  the  output  of  the   Understand  the  role  and  
Contract  your     Manage  the  transac<on  
transac<on   requirements  of  the  banks  
PPP  
Ensure  that  your  partner  delivers   Know  how  you  want  to  manage   Agree  on  how  you  want  to  handle  
Govern  your     as  agreed   change   windfall  gains  
PPP  
Understand  how  your  PPP  can   Be  prepared  for  any  kind  of   Agree  on  how  you  want  to  seYle  
Terminate  your     end   termina<on   termina<on  
PPP  
Sources:  ECORYS  2009  

28  
Disclaimer  

The  informa<on  contained  herein  is  of  a  general  nature  and  is  not  intended  to  address  the  circumstances  of  any  par<cular  
individual  or  en<ty.  Although  I  endeavour  to  provide  accurate  and  <mely  informa<on,  there  can  be  no  guarantee  that  such  
informa<on  is  accurate  as  of  the  date  it  is  received  or  that  it  will  con<nue  to  be  accurate  in  the  future.  No  one  should  act  
on  such  informa<on  without  appropriate  professional  advice  azer  a  thorough  examina<on  of  the  par<cular  situa<on.  
©VandenBroek  Consul<ng,  May  2010  
Hoogeinde  59  
5142  GB  Waalwijk  
The  Netherlands  
T:  +31  6  22  45  21  89  
E:  Marcel.vandenbroek.nl@gmail.com  
W:  www.vandenbroekconsul<ng.nl  

29  
30