Development of Policy, Legal, and Insitutional Framework for - ppiaf

Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi
Final Report
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Financial risk analysis & risk assessment;
Asset management & engineering assessment;
Transaction negotiations, both legal and financial;
Legal agreements/contract preparation and management;
Project appraisal (affordability, risk allocation, and value for money)
Public awareness, outreach and education.
In infrastructure, the long-term project risk of up to 20 to 30 years can be enormous if the PPP
Unit does not have the above-described expertise and access to experienced PPP specialists. As
is the case in most countries, much of this experience should be acquired from the local and
international private sector. While GOM capacity is high and the experience in some agencies is
substantial, the requisite depth and breadth of PPP experience will likely have to be outsourced.
Of course, in the long run, this also saves operating costs, as the PPP Unit will be able to add
more resources as required. Therefore, competitive recruitment will be required as well as the
need to solicit funding, both from GOM and donor sources to finance operating expenses and
consultant services.
Best practices in other countries, as well as considerations in Malawi, influence what the PPP
Unit should resemble. In general, we suggest commencing with a small initial team of
approximately 4-5 personnel until such time that a) the ‘deal flow’ is identified and matures, b)
Long term PPP legislation is established and c) Outsourcing of experts to develop and oversee
PPP transactions is mainstreamed.
Within this report we anticipate that the mature PPP Unit at its final stage (3-5years plus) will
have a small but flexible team of 10 or more professionals, overseen by a Managing Director
with Division or Practice heads. These managers will need to be able to oversee and manage
external consultant inputs, as well as liaise with donors to maximize the effectiveness and
utilization of grant funding. The PPP Unit will need to be scalable and demand driven, and its
management will need to be proactive in initiating things like stakeholder awareness, training
and capacity building, dissemination of information relating to PPP, standardization of PPP
procedures, and the local and international marketing of PPP project opportunities. The need to
scale up to these ‘mature’ levels will be determined by impact and demand for services,
including high growth areas such as municipal PPP’s rural PPP’s, and social PPP’s such as
health and education, in addition to traditional economic infrastructure.
PPP Unit Interim and Long Term Roles and Institutional Relationships
After considering several options and after examining a number of existing Government bodies,
such as, MOF/PERMU, OPC, DSC, the PC, MoTPSD and its MIPA, MoTPW, and the status of
MoEPD, we have narrowed down our analysis to one preferred option (see Figure 1 below) In
attempting to utilize existing expertise, PERMU and the PC offered the most promise, however
not without some institutional alignment issues, as well as limitations of staff resources in
PERMU and the present physical location of the PC. We also took into consideration the
Privatization Unit’s workload and how the PC would be (or would not be) able to fully or
partially integrate PPP activities within its current mandate or an expanded mandate.
THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 7