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

Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi
Final Report
V. INSTITUTIONAL FRAMEWORK
The Government’s institutional framework for PPP, and the institutional setup for its national
PPP Unit, must include provision of standardized procurement and contracting documents,
PPP best practices, standard procedures, and guideline tools to identify, structure, evaluate,
award, and monitor PPP projects. Development of these Standards and Guidelines should be
done during the interim phase of the PPP program, while the program is operated within the
Privatisation Commission, and before PPP regulations are passed and the permanent Unit is
established under the Ministry of Finance.
V.A.
Phases of PPP Institutional Setup
Phase I: Mobilize the national PPP program as follows:
1. Assign selected PC personnel to conduct PPP activities;
2. Conduct preparation and dissemination of PPP Standards and Guidelines;
3. Draft PPP Regulations to be issued under Public Finance Management Act;
4. Establish a PPP website to disseminate information about the PPP program, provide
details regarding PPP project opportunities for investors, disseminate information and
status reports of PPP procurement activities, and provide easy and quick access to PC
personnel tasked with conducting PPP activities;
5. Conduct capacity building programs, in the Ministry of Finance for assessment of risks
associated with contingent liabilities in PPP contracts, in the stakeholder government
agencies to develop skills that will eventually become centers of knowledge known as
PPP Nodes, and in the Privatisation Commission for staff who have been tasked with
undertaking PPP activities; and
6. Design, conduct fundraising activities, and establish the institutional setup for a Project
Development Facility to fund technical support for PPP transactions.
The approach inherent with this Interim Stage design is to keep salaries and overhead as low as
possible while PPP deal flow can be created. At the same time, the Interim Stage affords time to
set up the essential components of a PPP Institutional Framework, and to set up a mature stage
PPP Unit, both of which cannot be complete until: (a) the new PPP Regulations are passed; (b)
Government and donor funding is budgeted and formally put into place for the PPP Unit and
the PPP Program; (c) sufficient capacity has been built within the Ministry of Finance for
contingent liability risk assessment, in the PC for staff assigned to the PPP Program, and in
stakeholder government agencies for project identification, assessment, structuring, contracting,
and contract management; and (d) the Project Development Facility has been formally
established, and funded.
There is a lot of work in this initial stage, and completing the tasks will take a minimum of 6
months and a maximum of 12 months to 18 or even 24 months, depending on how quickly
Government and donors can get the PPP Regulations passed and take all of the necessary
decisions regarding institutional setup and funding. Although donor funding for the
Privatisation Commission is expected to end on 12/31/07 we have been advised by the PC’s
THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 38