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

Development of Policy, Legal, & Institutional Framework for the PPP Program in Malawi
Final Report
Action Plan for PPP Program:
The following key steps are necessary to keep the momentum in establishing and managing an
effective PPP program. They are discussed in more detail in the body of the report.
‣ Key Miniseries to jointly sponsor a PPP Cabinet Paper (based on PPP Policy paper set out
in this Report)
‣ Enact and Publish a ‘draft’ National PPP Policy
‣ Consult stakeholders on the proposed ‘draft’ PPP Policy
‣ Draft Ministerial Regulations on PPP
‣ Draft PPP Guidelines and Standard Operating Procedures as attachments to the
Ministerial Regulations
‣ Assess PPP ‘deal flow’ and begin PPP Pilot Project Development
‣ Finalize Design of a Project Development Facility to invite Donor Support
‣ Establish a PPP Unit to Implement the PPP Guidelines and SOP’s
‣ Develop Model PPP Contracts and/or Concession Agreements
‣ Develop Standard PPP Procurement Documents and Procedures
‣ Conduct Transaction Assistance and PPP information dissemination
‣ Conduct Training/Capacity Building at Central, Regional & Local level
Governance and Regulatory Implications of Proposed PPP Framework
Because the regulatory framework in Malawi is under-developed, the PPP program will require
the formulation and utilization of Model Contracts for each of the sectors in which PPP activity
will be undertaken. The purpose of the Model Contracts is to provide parties to PPP contracts
with the protections that would otherwise be provided by independent regulators. Along with
these Model Contracts, the National PPP Policy and its related PPP Act and PPP Regulations,
must provide highly specific policies and procedures for PPP procurement. We emphasize that
the use of contracts to provide the protections that would otherwise be provided by
independent regulators is an imperfect science filled with risks of unanticipated disputes. The
PPP Program must place a heavy emphasis on developing the regulatory framework as quickly
as possible.
In implementing a PPP Program, it will be necessary to issue new Standardized Procurement
Documents and Procedures because PPP procurement is significantly different from traditional
procurement. PPP requires a business orientation similar to that of private sector joint ventures,
while in traditional procurement the arrangement is relatively simple: Government is the buyer
and the private sector is the seller. In order to provide guidance regarding the complexities of
PPP business relations, and their related risk allocation mechanisms, it is necessary to write
entirely new sections of the procurement regime. One way to do this would be to have all of the
Government agencies involved in procurement, especially the Office of the Director General of
Public Procurement (ODGPP), modify their existing procurement policies, regulations, and
procedures.
Another option would be to include new PPP procurement policies, regulations, and
procedures in the Regulations to be enacted or under a new PPP Act. This is our recommended
approach, because within one body of legislation all of the material can be covered, whereas if
all agencies modify their procurement policies, regulations, and procedures there will be the
THE INSTITUTE FOR PUBLIC-PRIVATE PARTNERSHIPS 5