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PPP Risks and Benefits Analysis
- 1. 1. Public private partnership 2. Risks and Benefit Analysis 7/12/2017 1 Presenters Shivram Shrestha Shreekanta Kandel Suson Sapkota Yubraj Ghimire
- 2. 7/12/2017 2 1. Public Private Partnership
- 3. Public private partnership A contractual agreement between a public entity and private entity Arrangement of involving private sector in developing and delivering facilities that are developed by government Private party provides a public service or project For the delivery of infrastructure or services in the public interest Where the public partner focuses principally on the output and allows the private partner to determine the input in which a substantial transfer of appropriate risk takes place to the private party Better value of money demonstration than traditional public provision Funded and operated through a partnership of government and one or more private sector companies 7/12/2017 3
- 4. Obstacles of PPP Implementation Factors are: unstable government lack of cooperation and cooperation among government agencies lack of political commitment 7/12/2017 4
- 5. Main Types of PPP Arrangements In Nepal Revenue PPPs(revenue from user charge) Availability PPPs(revenue from organization) Hybrid PPPs 7/12/2017 5
- 6. Public Private Partnership PPP – Background Global competitiveness Report 2009/10 produced by the world Economic Forum Nepal's position in infrastructure at 131 out of 133 countries surveyed throughout the world need for increased investment in infrastructure and other basic services government's investment and involvement is not enough implying the needs for a greater role of the private sector 7/12/2017 6
- 7. The Government of Nepal (GON) has accepted public-private partnerships (PPP) as an alternative source of procuring assets and services, including the private sector's financial participation for meeting the increasing demand for infrastructure and services in the country For Example, KMC started PPP for Gongabu bus park, construction of foot- bridges at different locations. 7/12/2017 7
- 8. Eligible Partners and their Roles in PPP Private partners Private enterprises: domestic or foreign NGO/INGOs Community based organizations, cooperative organizations Public partners Central or National level ministerial and government departments individually Electricity Authority etc. Local level public bodies, specifically district, municipal and VDC level government entities 7/12/2017 8
- 9. 2. Risks and Benefit Analysis 7/12/2017 9
- 10. Risk Issues Risks related to PPPs: Economic and financial risks Market risks Political risks. Operations and Maintenance risks Environmental risks Acceptability of user fees 7/12/2017 10
- 11. Risk Management Importance: Monitor and measure progress Identifies new risk items and issues Establish new risk management priorities Provide management with visible target dates and milestones 7/12/2017 11
- 12. Risk Management Methodology Identify the risks Plan the risk response Monitor the risks Document lessons learned 7/12/2017 12
- 13. Benefits of Public Private Partnerships Exploring PPPs as a way of Introducing public sector technology and innovation in providing public services through improved operational effiency. Motivating the private sector to deliver projects on time and within budget. Imposing budgetary certainly by setting present and the future costs of infrastructure projects over time. Utilizing PPPs as a way of developing local private sectors capabilities through joint ventures for local firms in areas such as civil works, electrical works ,maintenance services, etc. 7/12/2017 13