Budgeting and public expenditures

3rd annual OECD symposium on public-private partnerships (12-13 April 2010)

 

The 3rd annual OECD Symposium on Public-Private Partnerships was held in Paris, 12-13 April 2010. The agenda was devoted to three main topics regarding PPPs:

 

1. The financial crisis and the use of PPPs

The financial crisis had an immediate negative impact on the volume of PPP projects in member countries. As credit markets dried up, debt capital became next to impossible to secure by SPVs, and new projects that had not already been finalised largely came to a standstill. In response to these developments, a number of countries made efforts to unclog the PPP pipeline by making financing available in various forms. The United Kingdom chose to do so by setting up a unit within the Treasury that acts like a private sector bank: the Infrastructure Finance Unit. France and Portugal chose to set up a guarantee scheme, and other countries such as Korea and Mexico set up special PPP initiatives as part of their fiscal stimulus plans.

This session was devoted to a broad discussion of what consequences the financial crisis had for PPPs, what remedial actions were put in place by governments, how they worked, and what developments can be expected.

Speakers:

  • Isabelle Dupuis, Executive Director, UBS.
  • Ben Clements, Division Chief for the Expenditure Policy Division, Fiscal Affairs Department, IMF.
  • Nicholas Jennett, Head of European PPP Expertise Centre (EPEC), European Investment Bank.
  • François Bergere, Secrétaire général, Mission d'appui aux PPP, Ministère de l'Économie, de l'Industrie et de l'Emploi, France.
  • Charles Lloyd, Head of Corporate and Private Finance, HM Treasury, United Kingdom.
  • Jay-Hyung Kim, Managing Director, Public and Private Infrastructure Investment Management Center, Korea.

 

2. Ensuring value for money when choosing between PPPs and traditional public procurement

There are often differences between the procedural, institutional and legal requirements of traditional infrastructure public procurement (build-and-deliver) and the procurement of services through public-private partnerships (PPPs). Whereas in principle, value for money constitutes the decisive element in deciding between the two methods of procurement, the differences in requirements may skew the choice by creating an incentive to prefer one type of procurement to the other. In turn, this may cause value for money not to be the decisive criterion in the choice between methods of procurement.

With the focus on attaining value for money, this session discussed traditional infrastructure public procurement and the procurement of services through public-private partnerships in order to consider good practices aligning the requirements for these two types of procurement.

Speakers:

  • Ian Hawkesworth and Philippe Burger, OECD Secretariat, presented a paper comparing PPP and traditional procurement processes in member countries.
  • James Sheppard, OECD Secretariat, presented OECD work on integrity in public procurement.
  • Francisco Borja Gari, Deputy Managing Director, Acciona Concesiones.
  • Edward Humpherson, Assistant Auditor General, The National Audit Office, United Kingdom.
  • François Bergere, Secrétaire général, Mission d'appui aux PPP, Ministère de l'Économie, de l'Industrie et de l'Emploi, France.
  • Danny Graham, Director, Private Projects Branch of New South Wales Treasury, Australia.
  • Charles Lloyd, Head of Corporate and Private Finance, HM Treasury, United Kingdom.

 

3. The use of PPPs for infrastructure investments in urban areas

Several large-scale urban infrastructure projects in a number of OECD countries have been financed using PPPs, in order to strengthen the competitiveness and growth of major cities. These projects have in many cases involved the national and subnational government, as well as private partners, and can substantially reshape the dynamics of a city. Other infrastructure projects and programmes have been recognised as having the potential to transform the social face of a community.

This session discussed the lessons that can be learned when using the PPP model by way of a number of case studies presented by experts involved in the actual projects. The session was organised in co-operation with the Regional Competitiveness and Governance Division of the GOV Directorate, OECD.

Speakers:

  • Hélène de Largentaye, Councillor for Sustainable Development, The City of Paris, France.
  • Michael Coleman, Chief Executive Officer, Partnerships for Schools, United Kingdom.
  • Danny Graham, Director, Private Projects Branch of New South Wales Treasury, Australia.
  • David Hall, Director, Research Unit, Public Services International (Business School, University of Greenwich), on behalf of TUAC, the Trade Union Advisory Committee to the OECD.
  • Luciano Greco, Professor, University of Padova, Italy.

 

The meeting closed with a discussion of future work.

 

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