Public private partnership units

Public private partnerships (PPPs) are an alternative method for government procurement of infrastructure and are employed widely throughout the world to delivery better procurement performance and improved delivery of public goods and services. As a specialised form of procurement for delivering large, complex and highly networked infrastructure assets, PPPs require enabling policy frameworks, expertise in the selection, analysis, negotiation and delivery of projects and a good understanding of long-term contract management. In developed and developing countries, PPP policy is managed by PPP units formed within a central policy-making agency of government. PPP units require experience and technical skills across a number of disciplines, personnel must possess a good understanding of commercial issues and capital markets, and the unit must work collaboratively with line agencies to achieve PPP policy objectives.

This paper surveys international best practice for PPP units and finds that the effectiveness of PPP programs is improved with a well-designed PPP unit located in Treasury or a major agency of government and which is equipped with a wide charter, highly-skilled procurement specialists with strong transactional experience. The major challenges for the PPP unit include building capacity within government, cultivating a competitive bid market, developing a project pipeline, provide oversight and assistance to agencies and serve a technical support role within government. Countries that can design their PPP agencies to meet these objectives are more likely to have an effective PPP program than those countries that do not.