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

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Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi Final Report Figure 1 – PPP Unit Institutional Roles and Reporting Framework MOF – Operating within OPC Policies MOEP (Budget Accountability) PPP Unit MOTPS (Program Accountability) PDF PPP Transaction Monitoring & Compliance Education & Promotion THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 12
Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi Final Report II. INTRODUCTION AND RATIONALE Over the past several months, the IP3 team has conducted extensive field research, interviews, and reviews of existing reports in order to formulate a comprehensive plan for Government to create a policy, legal, and institutional framework for PPP. At the end of this research and analysis period, the team prepared a draft Cabinet Paper, for the Minister of Finance to present to Cabinet, proposing specific actions that could be undertaken by Government in order to establish such a PPP framework. This Final Report serves as both an update of our previous reports and a Road Map for implementing the PPP Program in Malawi. The Global Transition from Privatization to PPP Along with numerous other countries, Malawi has been conducting Privatization in an effort to shift the burden of service delivery onto the private sector. This has been done by transferring the ownership and control of public enterprises to the private sector, with the objective of having services performed by those public enterprises subsequently performed by private enterprises, thereby relieving Government of the costs associated with owning and operating public enterprises. The Public Enterprises (Privitisation) Act provided the legal mandate for such transfers of ownership and control of existing facilities. As we now approach the point at which most of the existing facilities have already been sold or contracted to the private sector, it is necessary to mobilize a PPP program to enable private sector participation in the operation of new facilities. It is important to keep in mind that the evolution from privatization to PPP should be treated as an evolution, not a radical shift in direction. In many countries, some political elements have tired of the privatization process and all of the negative publicity it tends to attract, caused by the common misperceptions that the privatization process always involves massive layoffs of workers, giving over control of valuable assets to foreign interests, selling off things that government should own to protect the public interest, etc. Our advice to those elements is “be patient just a little while longer” and allow the natural process of evolving from privatization to PPP take its course with enough time to manage the transition without a radical shift in policy. International Transition Models and Options for Malawi Managing the transition from privatization to PPP is a delicate and complex task, but fortunately Malawi is not alone in this mission. Many countries are going through the same process, and some have already gone through at least the initial stages of the transition, so there are some international models that can be used as guidelines. Most of the challenges relating to the transition are not in the area of policy, which can evolve naturally and without any radical changes, but rather in the areas of institutional setup and enabling legislation. In Malawi, and in many other countries, one could in theory launch a national PPP program very quickly by simply issuing some PPP standards and guidelines. There is already PPP activity underway in Malawi, so maybe the only need is for Government to provide guidelines on how to do it correctly. THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 13
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