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Principle 13: In the case where the contract is terminated by the Fiji Government unilaterally, or by the proponent in case where the Fiji Government defaults on its obligations, the proponent will be compensated for actual expenses incurred on the project plus a reasonable rate of return 53. This “comfort” provision is required to attract the private sector to invest in large and costly infrastructure projects that may have a long concession period. This is also a disincentive for any future government to nationalise a PPP project or projects. Principle 14: A permanent inter-governmental committee reporting to an Advisory Board will periodically review and, as necessary, revise the implementing regulations 54. The Public-Private Advisory Board will consist of equal representation of key stakeholders from the public and private sectors. The permanent inter-governmental committee will be made up of the Chief Executive Officers of the Ministries of Finance and National Planning, Public Enterprises and Public Sector Reform and Commerce, Business Development and Investment as well as the Attorneys Generals Office. This will ensure the provision of dynamic regulations that can be periodically revised to respond to changing needs. 55. The inter-governmental committee, while reporting to the Public-Private Advisory Group, must also draw on private sector expertise as appropriate to address and resolve issues and make recommendations to the Advisory Group with the primary objective of establishing the degree of standardisation needed to create an attractive market for PPPs across all sectors of public capital infrastructure and public services. Implementing the PPP Policy 56. It is essential to ensure a standardised approach consistent with this policy framework to the development of the PPP programme overall, while recognising the need for flexibility to accommodate diversity at project level. Guidelines and procedures as part of the Implementing Regulations and will need to be developed and finalised prior to the passing of the legislation. 57. The first stage of implementing the PPP policies was the enactment of the PPP Act. The commencement date of the Act was the 3rd of April 2006. The Act is essentially the embodiment of the policies. In the course of drafting this legislation the Ministry consulted widely with various stakeholders both from the private sector as well as the public sector. The comments and suggestions of all our stakeholders have been incorporated in the Act. 58. Furthermore, Cabinet in its last meeting on the 7th of June, 2006 approved the establishment of a Public Private Partnership Unit (‘PPP Unit) within the Ministry of Public Enterprises 9 . The Unit will be tasked with the responsibilities of conducting awareness programmes, identifying possible PPP projects and conducting pre-feasibility studies of these projects. As PPP is an emerging concept of funding infrastructure 9 Cabinet Decision 224/ 2006 14
development, there is a plethora of evolving issues that will need to be addressed. Thus, the Ministry will continue to engage consultants initially to provide arms length advice in order to provide effective and appropriate solutions as these issues evolve. 59. In summary the PPP Unit, working together with the other public and private sector interests, will give a high priority to: (i) Delivery of the PPP programme; (ii) Developing a standardised approach in terms of tendering procedures, model contracts and documentation, in step with progress in the programme; (iii) Ongoing development and review of PPP policy; and (iv) Resolving outstanding obstacles to the wider use of PPPs (including legal, taxation, financial and other issues). 60. This will ensure that PPP becomes a standard element of Government procurement method and a stream of PPP projects is developed and a sustainable and dynamic PPP market is created in Fiji in the long term. South Africa Case Study – Lessons Learnt 10 61. South Africa like many other countries is faced with the problem of infrastructure backlogs and budget constraints. The government through its Department of Finance recognised the need to partner with the private sector in order to address this problem. Consequently various PPP initiatives in various sectors were considered as an alternative way of delivering services. This case study examines one initiative that has been implemented for the provision of public services by the private sector through Asset Procurement and Operating Partnership Systems (APOPS). The Department of Public Works (DPW) engaged in the APOPS programme in 1996. This programme lies within the broader PPP framework. 62. The Department of Public Works – APOPS Directorate is currently engaged in pilot projects for the procurement of correctional facilities structured along the design, build, finance and operate (DBFO) approach. 63. The private sector consortium is responsible for the design, build, finance and operation of the facility and at the end of the concession period which is 25 years, the facility will be transferred back to the State. The government pays the private sector (referred to as the concessionaire) periodically for the services rendered. In the APOPS programme, the three main objectives to be considered are to secure value for money, optimal risk allocation and affordability and these objectives have important implications with regards to the financing of the projects. 10 CSIR (2001) 15
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