Capacity-Building Workshop on Public Private Partnerships (PPPs) on 28 April 2008 in Amman, Jordan
The Capacity Building Workshop on public private partnerships (PPPs) took place on 28 April 2008 in Amman, Jordan. It was hosted by the Executive Privatisation Commission (EPC) of the Hashemite Kingdom of Jordan in co-operation with the OECD in the framework of the Good Governance for Development (GfD) for Arab Countries Initiative, Working Group IV on Public Service Delivery, Public-Private Partnerships and Regulatory Reform.
The OECD defines a public-private partnership as an agreement between the government and one or more private partners according to which the private partners deliver a public 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.
Public private partnerships (PPPs) are increasingly used as an arrangement for delivering public services involving the private sector in both OECD and Arab countries. PPPs enables governments to benefit from market-based mechanisms and private sector management to add value and improve efficiency. They are not a solution for all problems, but in certain cases can provide high value-for-money.
H.E. Eng. Abdel-Rahman El-Khatib, Chairman of the Executive Privatisation Commission in Jordan chaired the seminar. Mr. Khereddine Ben Soltane, Legal and Legislative Advisor to the Government of Tunisia represented the Chair of the GfD Working Group IV on public private partnerships, public service delivery and regulatory reform. Around 40 participants represented 6 Arab countries: Egypt, Jordan, Lebanon, Morocco, Tunisia and Yemen. From the Jordanian side, a large number of institutions participated actively from ministries to private stakeholders. Mr. Philippe Burger, Professor of Economics and Chairperson of the Department of Economics at the University of the Free State in South Africa, a well known expert on PPPs, participated and conducted most of the workshop.
This workshop aimed at bringing together experts and policy makers to help develop a common understanding on how to construct successful PPPs by reviewing some OECD and MENA case studies and good practices.
The final objective was to create capacities, involving both public and private entities. This kind of activities on PPPs has been highlighted during the GfD Initiative by participating Arab countries as one of the priorities.
Discussions and structure of the workshop
The Workshop was prepared to allow delegates participate actively by presenting their experiences, asking questions and discussing among experts. Mr. Philippe Burger, Professor of Economics and Chairperson of Department, Department of Economics, University of the Free State, South Africa, conducted the workshop. Mr. Philippe Burger has previously participated actively in the work on PPPs in the OECD, greatly contributing to the OECD publication, Public-Private Partnerships: In Pursuit of Risk Sharing and Value for Money
The Workshop was organised in three sessions:
The first session addressed a general overview of PPPs, definition, rationale and basic terms such as:
affordability and risk to develop an understanding on basics of PPPs. It was an opportunity for Arab countries to present on their experiences on PPPs.
The second session discussed about how to bring value-for-money to public service delivery, which should be the main justification for using PPPs. Value-for-money meaning more efficiency in delivering, which is brought with competition policies promoting the right incentives. Participants explored what kind of services were best suited to be organised through PPPs, the use of policy tools for decision makers as the Public Sector Comparator (PSC), and mechanisms to measure PPPs’ performance.
The third session focused on institutional and accounting aspects of PPPs. The promotion of central institutions with a long term approach is important to ensure coherence, oversight and continuation over the political cycle. Characteristics of the PPP units were discussed. Other public governance issues such as transparency, accountability and elements of the regulatory policy were presented.
It was concluded that the effectiveness and success of PPPs depends on different issues to consider:
An appropriate allocation of risk between partners.
Efficiency and value for money (VFM)
Affordability of the projects
Budgeting and accounting of PPPs
Establishment of PPP units
A sound regulatory framework for PPP, including complementary regulations on competition policy, transparency and accountability
This workshop has been a unique opportunity to (i) build up a common understanding on PPPs in the OECD and the Arab region. This exercise of policy dialogue has also helped to (ii) create capacities for officials in different Arab countries, having them participating in an international forum to better understand the problematic behind public service delivery in general, and more concretely on PPPs. The event also facilitated the (iii) creation of links between institutions working on the subject in different countries. And finally, (iv) interest was raised to continue working on these issues in the framework of the GfD Initiative.