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Public Private Partnerships in the caribbean webinar presentation part 2


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Part two of investigation into Public Private Partnerships and the potential scope and role for their application to development interventions in the Caribbean- presented as a webinar for the PMI (c) International Development Community of Practise (IDCoP)

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Public Private Partnerships in the caribbean webinar presentation part 2

  1. 1. “Public-Private Partnerships and the Future of Development Projects in the Caribbean” Presenter: Resel Melville (PMP, D.E.A, B.A (Hons) Date: June 13 2013
  2. 2. 2 RECAP OF THE FIRST WEBINAR i. Key Definitions: * What is a PPP/ P3? * Who are the players/ parties involved? * Types of PPPs ii. Recent history of PPPs- 1990’s to 2000’s iii. Present day: global context *Busan Global Alliance *EU Agenda for Change *WTO Aid for Trade Initiative iv. Present day- regional context * CARICOM Single Market and Economy * CARIFORUM-EU Economic Partnership Agreement v. P3s for Development- pros and cons vi. Examples of recent/major Public Private Partnerships in Key Development Sectors in the Caribbean vii. Part 2: a preview…. “Public-Private Partnerships and the Future of Development Projects in the Caribbean”
  3. 3. • What types of projects in the Caribbean would benefit from a P3 approach? • What do we need to consider when thinking about setting up dedicated PPP Units in the Caribbean? – National – Regional • What are requirements for effective management of P3s for development…and at different stages of the project life cycle? • What is the project manager’s role in such a complex process?
  4. 4. 4 Reminder- what is a PPP? • “a voluntary alliance between various equal actors from different sectors whereby they agree to work together to reach a common goal or fulfill a specific need, that involves shared risks, responsibilities, means and competencies.” (USAID/CED, Public Private Partnerships for Development- A Handbook for Business, July 2006) Presentation Title “a contractual agreement between public sector and private sector (for-profit) where resources and risks are shared to meet a specific public need.” (UNDP SSC
  5. 5. 5 Case Study- Trinidad and Tobago Presentation Title Fast Facts • Population: 1,305,000 • Capital: Port-of-Spain; 55,000 • Area: 5,128 square kilometers (1,980 square miles) • Language: English, French, Spanish, Hindi • Religion: Roman Catholic, Anglican, Hindu, Muslim, Presbyterian • Currency: Trinidad and Tobago dollar • Life Expectancy: 71 • GDP per Capita: U.S. $20,400 (Est 2012) • Literacy Percent: 99 • Industry: Petroleum, chemicals, tourism, food processing • Agriculture: Cacao, sugarcane, rice, citrus; poultry • Exports: Petroleum and petroleum products, chemicals, steel products, fertilizer
  6. 6. 6 PPP Programme for Trinidad and Tobago FOMIN: Multilateral Investment Fund (member of the IDB Group) Purpose: To strengthen capacity of the Government of Trinidad and Tobago to structure and oversee the implementation of 2 Pilot PPP projects in order to create a demonstration effect Executing Agency: Ministry of Finance and the Economy Related Areas: Infrastructure, Public Services, Public-Private Partnerships Approval Date: July 16 2010 Funding: FOMIN- US$864,285 Counterpart- US$1,277,955 Presentation Title NATIONAL PPP PROGRAMME OF TRINIDAD AND TOBAGO (T&T) P3 PROGRAMME RATIONALE/ OBJECTIVES - Government’s commitment to “improve the quality of the economic and social infrastructure across the country” - to expand access to effective and efficient infrastructure and infrastructure services - To meet social needs through better health and education facilities; improved road networks, transport systems, water and waste management, energy, communications infrastructure - To provide infrastructure for sustainable development of the tourism sector - To improve the value achieved from the allocation of government resources to identified sectors/ get best value for money
  7. 7. 7 Government of the Republic of Trinidad and Tobago PPP Policy Approved by Cabinet June 2012 • PPP Definition • PPP Value Drivers • Aim and Scope • Universal Criteria for Projects • Project Development/ Implementation Processes • Institutional Responsibilities for the Programme Presentation Title T&T PPP UNIT - Lead, drive, coordinate the National Infrastructure P3 Programme - Develop and disseminate guidelines on processes and criteria for Identifying, Preparing, Procuring, and Implementing P3 Projects - Review, select, evaluate, recommend projects to be done as P3s - Work with implementing agencies , facilitate agreements - Provide oversight of P3 projects; ensure consistency, good coordination - Repository of skills and knowledge on P3s NATIONAL PPP PROGRAMME OF TRINIDAD AND TOBAGO (T&T)
  8. 8. 8 • PPP Definition- a long term contract between a private party and a Government Agency for providing a public asset or service in which the Private Party bears significant risk and management responsibility.” • PPP Value Drivers- risk transfer; whole of life costing; innovation; asset utilization; focus on service delivery, accountability • Aim and Scope- achieves value for money, is fiscally responsible, ensures transparency and honesty, is environmentally and socially sustainable • Universal Criteria for Projects- feasibility & economic viability; commercial viability; value for money; Fiscal responsibility • Project Development/ Implementation Processes- Project Identification; Business Case; Transaction; Contract Management • Institutional Responsibilities for the Programme- Ministerial Committee, PPP Unit, PPP Project Execution Teams incl. contract management team Review and approval: A PPP must be approved by Cabinet at 2 stages- (a) Business Case - to approve the P3 Transaction; (b)Transaction- to sign the P3 Contract Presentation Title NATIONAL PPP PROGRAMME OF TRINIDAD AND TOBAGO (T&T)- LEGAL FRAMEWORK
  9. 9. 9 Presentation Title NATIONAL PPP PROGRAMME OF TRINIDAD AND TOBAGO (T&T)- INSTITUTIONAL FRAMEWORK MINISTERIAL COMMITTEE - Ministers of: Finance (Chair), Planning, Education, Health, Housing &Environment, Public Utilities, Transport, Works &Infrastructure, Attorney-General. (can be expanded to incl. specific Ministry leading a P3) - Strategic direction, oversight, change management PROJECT EXECUTION TEAMS - Constituted for each P3 project - Experienced advisors, Ministry reps, P3 Unit, other Gov’t entities, other special advisors - Develops business case, leads proj. implementation/P3 transactions - Reports to Ministerial Committee PPP UNIT (MOFE) (Secretariat to MC) CONTRACT MANAGEMENT TEAMS - Legal and other expertise - Manages contracts for P3s - Reports to Ministerial Committee/ consults same to manage change INFRASTRUCTURE DEVELOPMENT BANK??? - loans/ equity - Guarantees, capital mobilisation, interest rate subsidies, insurance products…
  10. 10. 10 CASE STUDY: HAITI Fast Facts • Population:8,288,000 • Capital: Port-au-Prince; 1,961,000 • Area:27,750 square kilometers (10,714 square miles) • Language: French, Creole • Religion: Roman Catholic, Protestant, Voodoo • Currency: Gourde • Life Expectancy:51 • GDP per Capita: U.S. $1,400 • Literacy Percent:53 • Industry: Sugar refining, flour milling, textiles, cement • Agriculture: Coffee, mangoes, sugarcane, rice; wood • Exports: Manufactures, coffee, oils, cocoa
  11. 11. 11 Presentation Title NATIONAL PPP PROGRAMME OF HAITI 4 Strategic Lines of Action: 1. Development of Overarching National Framework a. Definition of a P3 in Haitian context i. Identify various forms/ structures for P3s b. Definition of Strategic Priorities/direction/ operations of the Programme c. Elaboration of specific legal and regulatory frameworks for the operations of P3s d. Development of detailed guides and manuals (based on int’l standards: - Management of tendering process - Evaluation of projects - Project implementation - Contract management - Monitoring and evaluation of P3s
  12. 12. 12 Presentation Title NATIONAL PPP PROGRAMME OF HAITI 4 Strategic Lines of Action: 2. Mobilisation of Resources for the development of P3s. a. Mobilisation of financial resources ($$) by the State - US$25 Million- 2012-13 budget for launch/ start-up - Grants - Co-financing - Leveraging of private capital/ investments - Other State Contributions to P3s- public/government assets (quantity, description, strategic contribution/ value for money TBD)
  13. 13. 13 Presentation Title NATIONAL PPP PROGRAMME OF HAITI 4 Strategic Lines of Action: 3. Establishment of Institutional Framework for development and management of P3s. Strategic Steering Committee - Strategic priorities/ policies - Key Ministries, Central Bank, Recognized Private Sector Rep. Industrial Development Fund (FDI) -Trust (financial pole); management of financial resources for MEF; financial partner to participating financial institutions -Banking and financial institutions Central Management Unit - “promotion and management of P3s” - research; advisory; evaluation; - technical assistance; capacity building - Core staff of National experts/ ad hoc short term specialists Network of Chartered/ Accredited Management Centers - guarantee permanent follow- up of P3 operations, guarantee creditable financial and managerial performance; ensure company compliance with tax requirements -key accounting and management professionals
  14. 14. 14 Presentation Title NATIONAL PPP PROGRAMME OF HAITI 4 Strategic Lines of Action: 4. Implementation of the Haiti National P3 Programme- promotion and management of P3 projects in key Sectors Strategic Sectors for implementation of P3s in Haiti… - Tourism - Agri-business - Maritime Infrastructure - Airports - Housing Sectors where existing/ previous P3 implemented… -Electricity -Potable Water -Agriculture/ agri-business -Transport -Communication -Manufacturing -Tourism -Mobile Banking….
  15. 15. 15 Presentation Title Fig.1: PPP Reference Guide Overview Source: Public Private Partnerships Reference Guide V.1.0, World Bank/ PPIAF 2012
  16. 16. 16 Presentation Title www.caribank.orgTHE CARIBBEAN DEVELOPMENT BANK Established: 1969 Entry into Force: 1970 Members – Antigua and Barbuda; The Bahamas; Barbados; Belize; British Virgin Islands; Cayman Islands; Dominica; Grenada; Guyana; Jamaica; Montserrat; St. Kitts/Nevis/Anguilla, St. Lucia, St. Vincent and the Grenadines; Trinidad and Tobago; Turks and Caicos Islands; Canada and the United Kingdom; Venezuela; Colombia; Anguilla ( formerly part of the State of St.Kitts/ Nevis/Anguilla); Mexico, Italy, Germany; China, Haiti, Suriname and Brazil For additional details on the CDB see: dbpurpose-2013.pdf PURPOSE: to contribute to the harmonious economic growth and development of the member countries in the Caribbean and to promote economic cooperation and integration among them, having special and urgent regard to the needs of the less developed members of the region MISSION: to be the leading catalyst for development resources into the Region, working in an efficient, responsive and collaborative manner with (BMCs) and other development partners, towards the systematic reduction of poverty in their countries through social and economic development .” FUNCTIONS: - To assist Borrowing Member Countries (BMC) to optimize use of resources, develop their economies & expand production & trade - To promote private & public investment, encourage development of the financial upturn in the region & facilitate business activity/ expansion - To mobilise financial resources from within & outside the region for development - To provide technical assistance to regional BMCs - To support regional & local financial institutions & a regional market for credit/ savings - To support & stimulate development of capital markets in the region
  17. 17. 17 The CDB and Private Sector Development in the Caribbean CDB Strategic Priorities for the Private Sector • Business and Product Development • Financial Intermediation • Direct Support • Facilitate Participation in Private Infrastructure • Privatisation • Technical Assistance • Environmental management • Guarantees • Research & Development • Catalysing Investment Flows • Capital Market Development • Equity ( Funds, Investments) • Creating an enabling environment (legal and regulatory framework) • Policy Dialogue • Public and Corporate Governance • Risk Management Presentation Title Extract: “Assistance may be considered for projects to establish, expand, diversify and modernize productive facilities in various sectors including energy, manufacturing, agribusiness, tourism, transportation, infrastructure, telecommunications and financial services.” CDB will give due consideration for investment to projects which are deemed to be beneficial to the economy of the BMCs. Priority is given to those activities which will enhance the region’s foreign exchange earning capabilities, generate employment, and those which promote poverty reduction, social equity and environmental protection. cdb/organisation/projects-department/psdd
  18. 18. 18 Key characteristics of a Public Good (national, regional or international) - Non-rivalry between users- can be used by more than one “user” simultaneously; - Non-exclusion from use- must be available to more than one user at no or negligible additional cost. e.g: policy and other frameworks, institutions, databases… Sectors where RPGs can be created, using PPPs :Health, Transport/ Infrastructure, Citizen Security, Environmental management, Energy, Investment, Communication, ICTs etc. Presentation Title PUBLIC PRIVATE PARTNERSHIPS FOR REGIONAL PUBLIC GOODS (RPG) Types of P3s for RPG - Consultation between public and private actors - Concertation (or agreement) of policy between actors; collaboration on standard setting, and - Operational functions such as joint research and product development or programme implementation Examples of Caribbean Regional P3s for RPGs: - PanCaribbean Partnership against HIV & AIDS; - Caribbean Cooperation in Health (CCH III); - Caribbean Disaster and Emergency Risk Agency (CDERA)-Regional disaster risk management for sustainable tourism in the Caribbean.
  19. 19. 19 • Public Partners- traditional and emerging International Development Partners (IDPs) bilat. countries; multilateral organisations, international and regional financial institutions; Caribbean Governments • Private Partners- for profit corporations, not-for-profit corporations, Non-governmental organisations, civil society (at various levels) Presentation Title PUBLIC PRIVATE PARTNERSHIPS FOR REGIONAL PUBLIC GOODS (RPG)- RESOURCES AND FUNDING
  20. 20. 20 REALITY CHECK- the Challenging reality for P3s in the Caribbean • “less effective Governments tend to have less effective PPP Units… lack of political commitment, transparency and coordination in Government agencies reduces the Units chances for success.” (PPIAF Info.Note 4, 2012) • Political will or lack thereof • Prior experience of the Government in P3s • (Deficiencies in ) Relevant existing laws and regulatory authorities/ enforcement capacity  small market size and difficulties in achieving economies of scale  weak enabling environment for business  limited access to financial services and capital markets,  inadequate infrastructure for competitiveness  a dearth of management skills  insufficient support for Innovation and Technological development  Limited capacity to manage environmental risks Presentation Title
  21. 21. 21 Presentation Title The Public Private Partnership Lifecycle… for more details and tools see-
  22. 22. 22 The Partnering Initiative- Questions for Partnership Practitioners… • A. ORGANISATIONAL ISSUES 1. What are the underlying motivations / drivers for my organisation’s interest and involvement in the partnership? How can I help the other partners understand these? 2. How do the other partners regard my organisation? How can I help partners to understand my organisation better? • B. PROFESSIONAL COMPETENCY ISSUES 3. What professional skills & competencies do I have and how are they useful to the partnership? 4. What new skills/ competencies do I need to have to partner effectively? How can I acquire them? 5. How do other partners perceive my skills/ competencies? • C. PARTNERSHIP ISSUES 6. What do I see for the Partnership in the future? Do others share my vision? ANY OTHER ISSUES TO EXPLORE** Presentation Title
  23. 23. 23 Presentation Title