IREX Webinar on PPPs

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Transcript IREX Webinar on PPPs

Introduction to
the PPP Model
Team of Specialists
for PPPs
Presented by:
Art Smith
[email protected]
October 9, 2012
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.
Private Investment in Infrastructure, 1990-2010
$US Billions*
Source: World Bank and PPIAF, PPI Project Database
*Adjusted by U.S. CPI
Private Investment in Infrastructure, 1990-2010, by Region
$US Billions*
Source: World Bank and PPIAF, PPI Project Database
*Adjusted by U.S. CPI
Definition of Public-Private Partnership
• 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
• 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.
Completed PPP Projects (U.S.)
Union Station, Washington, DC
JFK International Terminal 4, New York
Las Vegas Monorail, Nevada
Dulles Greenway, Virginia
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
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
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
• Reduce income inequality
• Provide environmental enhancement
PPP Challenges in the Former Soviet Union
• Legal and Regulatory Frameworks
• Property Rights
• Public and Private Sector Capacity
• Political Commitment
• Transparency