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

Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi
Final Report
These Advisors are usually funded via donor contributions. After a few years, the Advisors’
skills are transferred and they are no longer needed.
Most PPP Units have two or three core functions, each managed by its own department. In
many countries, development of the PPP Unit’s functions, organization, and authority have
generally followed the phases highlighted on the following page. The Malawi PPP Unit will
already have capacity inherited from the PC, so it can begin at Phase II and evolve to Phase III
over a 5-10 year period. PPP projects will require ongoing government involvement and there
will be a need to have a constant guiding presence in reaching out to the market to identify and
execute PPP projects in many different sectors. In Privatization although the transaction
technically ends when the asset sale is completed, there is usually an expectation or even a legal
requirement that the subsequent service provision by the private operator must conform to
certain specified standards. This is always the case when a Privatization transaction involves a
regulated industry and/or public utility.
The PPP Unit could have three main functional areas: (1) a Transactions function, to support
the analysis, structuring, bidding, evaluation, and negotiation of projects consistent with MoF
approval; (2) a Monitoring & Compliance function, to monitor and ensure compliance with the
PPP contracts that have been approved by the PPP Unit; and (3) Education and Promotion
function to reach out to line agencies and stakeholders on how to plan and implement PPP and
how to use the guidelines and procedures essential to project success. There would also be a
need for a minor finance and administration function in which accounting, financial reporting
and control, office management, human resource management, and administration are
conducted.
In the Transactions function group, personnel must be capable of managing all phases of the
PPP Project Life Cycle, i.e. project identification, analysis, structuring, tendering, negotiation,
and monitoring. Personnel in this functional group should have skills in at least:
International & domestic lending and banking;
Financial analysis & risk assessment;
Asset management & technical assessments;
Transaction negotiations, both legal and financial;
Legal agreement/contract preparation and management; and
PPP Economics (affordability, value for money, risk allocation).
V.E.
Phases of PPP Program Evolution
PPP Programs typically go through three phases of evolution. For this reason, PPP Units need
to be flexible and scalable as the nature and volume of their activities changes while the national
PPP Program goes thorough its life cycle.
The chart below summarizes the key elements of this life cycle.
THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 45