Transcript IREX Webinar on PPPs

Introduction to
the PPP Model
UNECE
Team of Specialists
for PPPs
Presented by:
Art Smith
Chairman, UNECE TOS-PPP
[email protected]
October 9, 2012
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Financing the Infrastructure Gap –
an Imperative for GDP Growth
Infrastructure Financing Gap = The gap between
Funding Requirements for Investments in Infrastructure
(New + Operations & Maintenance) and actual
infrastructure expenditures
 The Infrastructure Financing Gap is huge in
developing countries amounting to more than
US$900 billion/year
 Across the developing world, this amounts to 60% of
the total infrastructure financing requirement.
THE WORLD BANK
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Private Investment in Infrastructure, 1990-2010
$US Billions*
Source: World Bank and PPIAF, PPI Project Database
*Adjusted by U.S. CPI
4
Private Investment in Infrastructure, 1990-2010, by Region
$US Billions*
Source: World Bank and PPIAF, PPI Project Database
*Adjusted by U.S. CPI
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Definition of Public-Private Partnership
(PPP)
• A Public-Private Partnership is a contractual agreement
between a public agency (federal, state or local) and a
private sector entity. Through this agreement, the skills
and assets of each sector (public and private) are shared
in delivering a service or facility for the use of the general
public.
• In addition to the sharing of resources, each party shares
in the potential risks and rewards in the delivery of the
service and/or facility.
Source: www. ncppp.org
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Completed PPP Projects (U.S.)
Union Station, Washington, DC
JFK International Terminal 4, New York
Las Vegas Monorail, Nevada
Dulles Greenway, Virginia
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Completed PPP Projects (U.S.) cont.
James F. Oyster School, Washington, DC
New York Avenue Metro
Washington, DC
Fredericksburg, VA Parking Lot
Tolt Water Plant, Seattle, WA
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Potential Economic Objectives of PPPs may include:
 Reduce development risk
 Obtain project financing
 Reduce public capital investment
 Accelerate service availability
 Optimize value for money
− Access to management expertise
− Access to technology
 Optimize risk allocation
 Mobilize excess or underutilized assets
 Foster local capital markets
 Indirect economic benefits
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Potential Social Objectives of PPPs may include:
• Achieve legitimate political goals
• Improve service to the community, e.g., increased access
to drinking water which meets WHO standards
• Extend services to remote or marginalized regions or
populations
• Reduce income inequality
• Provide environmental enhancement
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PPP Challenges in the Former Soviet Union
• Legal and Regulatory Frameworks
• Property Rights
• Public and Private Sector Capacity
• Political Commitment
• Transparency