Many economies yet to adopt good practices in PPP: WB

Oct 04, 2016 (LBO) – The World Bank has in a report set out new benchmarks for public-private partnerships (PPP) procurement across 82 economies.

“Many economies are yet to adopt broadly recognized good practices to prepare, procure, and manage public-private partnerships (PPP),” the new World Bank Group’s Benchmarking PPP Procurement 2017 report stated.

The report flags potential improvements that can help governments fill the gap in an effort to provide better PPP procurement and enable better infrastructure service delivery to all.

The report benchmarks government capabilities in 82 economies across four key areas: PPP preparation, PPP procurement, unsolicited proposals, and PPP contract management.

“Across the four areas measured, the data finds that most economies fall short of recognized good practices,” the report said.

“Project preparation and contract management are the two areas where a significant number of countries perform poorly,”

The average performance of each of the categories varies across regions and income level, with OECD high- income economies and the Latin America and Caribbean region performing on or above average.

“The report aims to inform decision-making on the design of PPP procurement policies and regulations by comparing economies to recognized good practices that ensure transparency and encourage fair competition,” said Fernanda Ruiz Nunez, senior economist, World Bank Group.

“There is considerable scope to improve practices around PPPs, including around disclosure of information.”

The report highlights that a transparent information system is essential to monitor and manage PPP contracts. Nonetheless, only 16 percent of the economies measured require data to be publicly available.

“This benchmarking exercise is the first attempt to collect and present systematic data on PPP procurement on a large scale by providing comparable data on the regulatory frameworks governing the processes,” said Tania Ghossein, senior private sector development specialist, World Bank Group.

“It analyzes the regulatory framework at the national level using a highway transport project as a case study for comparison purposes and presents a picture as of the end of March 2016.”

When designed well and implemented in a balanced regulatory environment, PPPs can bring greater efficiency and sustainability in providing such public services as water, sanitation, energy, transport, telecommunications, health care, and education.

Every country has its own unique challenges, priorities, and financial constraints. In some cases, PPPs can bring great benefit by leveraging the management capacity, innovation, and expertise of the private sector, while at other times a traditional public sector approach could be more appropriate.