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Public-Private Partnerships (PPPs)

Context

This area of work supports countries in the implementation of the OECD Principles for Public Governance of Public-Private Partnerships (2012). The principles support the establishment of a sound institutional framework to 1) ground the selection of PPPs in value for money and 2) ensure integrity, transparency and prudent management of fiscal risks.   

THE DECISION ON THE PROCUREMENT OF AN ASSET IS MADE BEFORE CHOOSING THE MODE OF DELIVERY, IN OECD COUNTRIES (2020)

Why is this important?

Private investment has the potential to supplement public investment to meet investment needs. Investors, particularly long-term ones, expect governments to be competent and reliable partners and to promote a stable business climate for investment.  The use of PPPs in OECD countries calls for capacities in government in terms of skills, institutional structures and legal framework to address the complexity of PPPs. Policymakers are encouraged to adopt a robust system of assessing value for money that involves classifying, measuring and contractually allocating risks to the party best able to manage them. Good governance of PPPs requires the alignment of public sector areas such as institutional design, regulation, competition, budgetary transparency, fiscal policy and integrity at all levels of government.

•    Establishing a clear, predictable and legitimate institutional framework supported by competent and well-resourced authorities is essential for the good governance of PPPs. Regulations affecting the operation of PPPs should be clear, transparent and adaptable to changing conditions.

•    The selection of PPPs should be grounded in value for money principles and based on a whole government perspective. The decision to choose the delivery mode should be separate from how to procure and finance the project to avoid institutional, procedural or accounting bias, either in favour or against PPPs.

•    Transparency in the budgetary process is essential to minimise fiscal risks and ensure the integrity of the procurement process. This will help ensure the affordability and sustainability of the overall investment envelope.

EXISTENCE OF A DEDICATED UNIT FOR PPPs IN THE EXECUTIVE BRANCH IN OECD COUNTRIES (2018)