Public–private partnership unit explained

A Public–private partnership unit (PPP unit) is an organisation responsible for promoting, facilitating and/or assessing Public-private partnerships (PPP, P3, 3P) in their territory. PPP units can be government agencies, or semi-independent organizations created with full or partial government support. Governments tend to create a PPP unit as a response to prior criticisms of the implementation of P3 projects in their country.^[1] In 2009, 50% of OECD countries had created a centralized PPP unit, and many more of these institutions exist in other countries.

Definition

There is no widely accepted definition of what a PPP unit is. The World Bank defines a PPP Unit as an organization that “promotes or improves PPPs. It may manage the number and quality of PPPs by trying to attract more PPPs or trying to ensure that the PPPs meet specific quality criteria such as affordability, value for money, and appropriate risk transfer.” Heather Whiteside describes them as "quasi-independent" institutions operating at "arm's length" from the government, and "created to promote, evaluate and develop P3 projects and policies."

Overview

Different governments have encountered different institutional challenges in the PPP procurement process which justified the creation of a PPP Unit. Hence, these centralized PPP units need to address these issues by shaping their functions to suit their government's needs. The function, location (within government), and jurisdiction (i.e., who controls it) of dedicated PPP units may differ among countries, but generally, they include:

Policy guidance and advice on the content of national legislation. The guidance also includes defining which sectors are eligible for PPPs, as well as which PPP methods and schemes can be carried out.
Approving or rejecting proposed PPP projects (e.g., playing a gatekeeper role at any stage of the process, such as the initial planning or final approval stage).
Providing technical support to government organizations at the project identification, evaluation, procurement, or contract-management phase.
Capacity building (e.g., training of public-sector officials that are involved in PPP programs or interested in the PPP process).
Promoting PPPs within the private sector (e.g., PPP market development).^[2]

The United Kingdom's PPP units, the Treasury Task Force on PPP (1997) and later Partnerships UK (1998) were staffed with people linked with the City of London, and accountancy and consultancy firms who had a vested interest in the success of the country's PPP policy: Private Finance Initiative. This helped the government override the public sector's opposition to expanding P3s. These institutions played a central role in establishing P3s as the "new normal" for public infrastructure procurements in the country.^[3] In contrast, the Infrastructure Investment Facilitation Center (1999) suffered from a lack of formal or informal power, and so was involved in less than half of the 3P projects developed in the country.

Effectiveness

A 2013 review^[4] of research into the value of centralized PPP units (and not looking at the value of PPPs in general or any other type of PPP arrangement, as it was aimed at providing evidence needed to decide whether or not to set up a centralized PPP unit) found:

No quantitative evidence: There is very little quantitative evidence of the value of centralized PPP coordination units vis-à-vis ministries or government agencies individually procuring PPP projects. Most of the studies conducted on PPP units focus on their role and carry out only brief descriptive analyses of their value.
Limited authority: The majority of the PPP units reviewed in the literature do not play a particularly important role in approving or rejecting PPP programs or projects. While their advice is used in the decision-making process by other government bodies, the majority do not actually have any executive power to make such decisions themselves. Hence, when they have more authority, their value is seen to be higher.
PPP units differ by country and sector: Government failures, in regards to PPP units, vary by government. The requirements for PPPs also vary by country and sector, as do the risks involved (financial, social, etc.) for the country government. Hence, PPP units need to be tailored to solve these failures and properly assess risks and need to be located in the correct government departments, where they can command the most power. PPP units can play a number of important roles in the PPP process, but not all such units will play the same role, as their functions have been tailored to the individual country's needs. In some cases, limits on their authority have curtailed their effectiveness.
Implicit value: The lack of rigorous evidence does not prove that PPP units are not an important contributor to the success of a country's PPP program. The literature review does show that while there is no quantitative data to this effect, there are widespread perceptions about the importance of a well-functioning PPP unit for the success of a country's PPP program.

The author of the 2013 review^[4] found no literature that rigorously evaluates the usefulness of PPP units. The literature does show that PPP units should be individually tailored to different government functions, address different government failures, and be appropriately positioned to support the country's PPP program. Where these conditions seem to have been met, there is a consensus that PPP units have played a positive role in national PPP programs.

Criticism

Centralized PPP units have been criticized for structuring their project assessments with a bias in favor of PPPs over traditional procurement methods, especially if Promoting PPPs as part of their mandate.^[1] As P3 units are usually staffed with people linked with private financial, consultancy and accountancy firms who have a vested interest in the success of P3 policies, this creates an apparent conflict of interest.^[3]

Some PPP units have been criticized for paying their executive staff well above the public sector's standard pay rate, which was deemed necessary for enticing people with financial experience to work for them.^[5]

Some have questioned the usefulness of creating P3 units, as everything in their mandate could theoretically be accomplished by the government ministry responsible for public infrastructure.^[4]

List of PPP Units

Country	Territory	PPP unit	Duration
Australia	New South Wales	NSW Public–private partnerships
	Queensland	Projects Queensland
	Victoria	Partnerships Victoria	1999–present
Bangladesh	National		1999–present
Bangladesh	National	Public–Private Partnership Authority	2010–present
Belgium	Flanders	Flemish PPP Knowledge Center
Belgium	Wallonia	Financial Information Cell
Brazil	Federal	PPP Unit
	Bahia	PPP Unit
	Espírito Santo	PPP Unit
	Minas Gerais	PPP Unit
	Pernambuco	PPP Unit
	São Paulo	PPP Unit
	Rio Grande do Sul	PPP Unit
Canada	Federal	PPP Canada	2009–2018
	British Columbia	Partnerships BC	2002–present
	New Brunswick	Partnerships New Brunswick
	Ontario	Infrastructure Ontario	2005–present
	Quebec	Quebec Agency for Public–Private Partnerships^[6]	2004–2009
		Saskbuilds	2012–present
China	National	Public–private partnerships Center
China	Hong Kong	Hong Kong Efficiency Unit
Croatia	National	Agency for Public–Private Partnerships
Czech Republic	National	PPP Association
Denmark	National	Danish Business Authority
Egypt	National	PPP Central Unit
Estonia	National	Public Procurement Center
France	National	Mission d'Appui aux Partenariats Public–Privés	2004–2017
Germany	Lower Saxony	PPP Task Force
Germany	North Rhine-Westphalia	PPP Task Force
Ghana	National	PPP Advisory Units
Greece	National	Secret Secretariat for PPPs
Honduras	National	Commission for the Promotion of Public–Private Partnerships
	National	Hungary Central PPP Unit	2003–present
Ireland	National	Central PPP Policy Unit
Israel	National	PPP Unit (Ministry of Finance)
India	Federal	Department of Economic Affairs PPP Cell	2006–present
	Andhra Pradesh	Urban Finance and Infrastructure
	Assam	Assam PPP
	Bihar	Infrastructure Development Authority
	Karnataka	Infrastructure Development Department
	Maharashtra	Region Development Authority
	Odisha	PPP Unit
	Punjab	Infrastructure Development Board
	Uttarakhand	PPP cell
Indonesia	Federal	Indonesia Infrastructure Guarantee Fund
Indonesia	Federal	PPP Directorate of Bappenas
Italy	National	Project Finance technical unit
Jamaica	National		1980–present
Japan	National	PFI Promotion Office
Kazakhstan	National	Kazakhstan PPP Center
Kenya	National	PPP Unit
Kosovo	National	Partnership Kosovo
Kuwait	National	Partnerships Technical Bureau
Latvia	National	Central Finance and Contracting Agency
Lebanon	National	Higher Council for Privatization and Partnerships
Malawi	National	Public Private Partnership Commission
Malaysia	National	PPP Unit
Mauritius	National	PPP Unit
Mexico	Federal + Regional	Program for the Promotion of Public–Private Partnerships in Mexican States	2007–present
Namibia	National	PPP Unit
Nigeria	National	Infrastructure Concession Regulatory Commission
New Zealand	National	National Infrastructure Unit
Pakistan	Federal	Private Power Infrastructure Board
	Federal	Infrastructure Project Development Facility
	Punjab	PPP Cell
	Sindh	PPP Unit
Peru	National	ProInversion
	National	Public-Private Partnership Center (PPP Center)	1999–present
Poland	National	The department for PPP in the Ministry of Funds and Regional Policy
Portugal	National	Project Monitoring Technical Unit	2012–present
Russia	Federal	PPP Development Center
Senegal	National	Agence nationale chargée de la promotion des investissements et des grands travaux
Senegal	National	Unité Nationale d'Appui aux Partenariats Public–Privés
Serbia	National	Commission for Public Private Partnerships
South Africa	Federal	South African Treasury PPP Unit	2000–present
South Korea	National	Private Infrastructure Investment Management Centre	2005–present
Sri Lanka	National	Utilities Commission of Sri Lanka, Board of Investment
Uganda	National	PPP Unit (MoFPED)
United Arab Emirates	Dubai	PPP Unit	2015–present
United Kingdom	National	Treasury Task Force for PPP	1997–1998
		Partnerships UK	1998–2011
		Local Partnerships	2009–present
	Northern Ireland	Strategic Investment Board
	Scotland	Scottish Futures Trust	2008–present
United States	Puerto Rico	PPP Authority
Uruguay	National	Public–Private Participation Unit	2009–present

Source: World Bank^[7]

Notes and References

Siemiatycki. Matti. September 1, 2015. Public-Private Partnerships in Canada: Reflections on twenty years of practice. Canadian Public Administration. en. 58. 3. 343–362. 10.1111/capa.12119. 1754-7121.
World Bank (2007) "Public-Private Partnership Units: Lessons for their designs and use in infrastructure"
Shaoul. Jean. Stafford. Anne. Stapleton. Pamela. 2007. Partnerships and the role of financial advisors: private control over public policy?. 2020-06-06. Policy & Politics. 35 . 3 . 479–495 . en. 10.1332/030557307781571678.
Web site: Literature Review: Evaluating the Costs and Benefits of Centralised PPP Units. Alberto Lemma. EPS PEAKS.
Book: Whiteside, Heather. Public-private partnerships in Canada. Fernwood Publishing. 2016. 978-1-55266-896-2. Halifax. 952801311.
Web site: Cosette. Robert. La nouvelle Agence des partenariats public-privé du Québec.
Web site: PPP Units Around the World Public private partnership. 2020-06-09. ppp.worldbank.org.