Development of Policy, Legal, and Insitutional Framework for - ppiaf
Development of Policy, Legal, and Insitutional Framework for - ppiaf
Development of Policy, Legal, and Insitutional Framework for - ppiaf
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<strong>Development</strong> <strong>of</strong> <strong>Policy</strong>, <strong>Legal</strong>, & Institutional <strong>Framework</strong> <strong>for</strong> the PPP Program in Malawi<br />
Final Report<br />
Three Phases <strong>of</strong> PPP Unit Evolution<br />
Phase I: <strong>Policy</strong> <strong>and</strong> Coordination Unit. Governments initially establish the parameters, guidelines <strong>and</strong><br />
procedures but with limited en<strong>for</strong>cement – hoping that PPP projects will flourish <strong>and</strong> that the private sector is<br />
keen to invest. While an important first step, most countries realize quickly that setting a PPP Unit or program is<br />
insufficient without clear cut objectives, rules, regulations, training, marketing <strong>and</strong> political support.<br />
Phase II: Comm<strong>and</strong> <strong>and</strong> Control. In reaction to failures or inability to limit public financial risk, some PPP Units<br />
then transition to greater capacity <strong>and</strong> control. They usually then retain substantial approval authority <strong>and</strong> project<br />
veto power leading to higher quality projects <strong>and</strong> adherence to market based approaches, pr<strong>of</strong>essionalism <strong>and</strong><br />
transparency.<br />
Phase III: Decentralization <strong>and</strong> Adherence to Common St<strong>and</strong>ards. In this phase, after PPP procedures <strong>and</strong><br />
rules are implemented successfully over several years, most governments are confident that the line agencies<br />
<strong>and</strong> local government have the capacity to plan <strong>and</strong> implement PPP projects with assistance from the PPP Unit<br />
<strong>and</strong> outside consultants. This is the trademark <strong>of</strong> a mature PPP program <strong>and</strong> in fact, in some cases, the PPP<br />
Unit transitions to a different organization one that is less about oversight <strong>and</strong> now focused more on results <strong>and</strong><br />
implementation.<br />
The appraisal <strong>of</strong> project opportunities by the PPP Unit will involve several stages. The first<br />
stage is a generally project viability assessment, with a focus on Af<strong>for</strong>dability <strong>for</strong> government<br />
<strong>and</strong> consumers. The second is a more detailed analysis, based on a pre-feasibility study <strong>and</strong><br />
focused on Risk Allocation. The third is a comprehensive analysis <strong>of</strong> the feasibility study, with<br />
a focus on Value <strong>for</strong> Money. The chart below provides an example <strong>of</strong> workflow in a successful<br />
PPP Unit.<br />
THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 46
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