Table of Contents

  • Dedicated public-private partnership (PPP) units include any organisation set up with full or partial aid of the government to ensure that necessary capacity to create, support and evaluate multiple public-private partnership agreements are made available and reside in government. Although dedicated units are considered a relatively recent phenomenon, in 2009 over one-half of all OECD member countries reported the existence of a dedicated PPP unit of some kind (see Table 0.1). The establishment of a dedicated unit serves to enhance the capacity of government to successfully manage the risks associated with a growing number and value of publicprivate partnerships. Given the substantial sums involved and the long duration of public-private partnerships, the importance of risk allocation, and the contractual complexity of the relationship, the management of public-private partnership agreements requires a high level of capacity.

  • There is no standard definition of what constitutes a public-private partnership. The OECD (2008) defines a public-private partnership as: an agreement between the government and one or more private partners (which may include the operators and the financers) according to which the private partners deliver the service in such a manner that the service delivery objectives of the government are aligned with the profit objectives of the private partners and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partners.

  • Whereas the previous chapter introduced dedicated PPP units and their general functions across OECD member countries, this chapter examines the institutional architecture surrounding the procurement of public-private partnership projects in five case studies: Germany, Korea, the United Kingdom, the State of Victoria (Australia) and South Africa. These countries have been selected based on their respective experience with public-private partnerships and different country characteristics. All five countries have over ten years of experience with public-private partnerships. The volume and value of their projects range from 19 worth EUR 1.9 billion in South Africa to 450 projects worth EUR 43.3 billion in the United Kingdom (see Table 2.1). The sample includes four OECD member countries and one non-member country; three unitary and two federal countries; as well as four central and one sub-national/state governments.

  • Approximately two-thirds (18) of all OECD member countries report that they have established a dedicated PPP unit in one form or another. This chapter provides a snapshot of the institutional arrangements surrounding public-private partnerships in countries that report having such a unit – at national or sub-national level. But this chapter does not discuss the PPP units in Germany, Korea, the United Kingdom and Victoria (Australia), which are discussed in Chapter 2. The snapshot of each country has been constructed drawing on government websites, annual reports and other sources. That a country does not have a dedicated PPP unit does not necessarily mean that it does not have an active public-private partnership programme.

  • The OECD established principles covering five important sets of challenges for national authorities in private sector participation in infrastructure (OECD, 2007). First, the decision to involve the private sector has to be guided by an assessment of the relative long-term costs and benefits and availability of finance, taking into account the pricing of risks transferred to the private operators and prudent fiscal treatment of risks remaining in the public domain. Second, authorities need to ensure an enabling policy framework for investment. Third, the success of private involvement in infrastructure depends on public acceptance and on the capacities at all levels of government to implement agreed projects. A fourth challenge for public authorities and the private sector is to establish a working relationship toward the joint fulfilment of the general public’s infrastructure needs. Fifth, insofar as they are not rooted in formal legal requirements, governments’ expectations regarding responsible business conduct need to be clearly communicated by governments to their private partners.