G20 launches tool to improve PPP management

19 Jul 18

The G20 is encouraging the public sector to improve oversight and management of public-private partnerships that are up and running.

The Global Infrastructure Hub, set up by the G20 in 2014, today launched a to public officials in charge of managing PPP infrastructure projects after initial agreements have been signed.

Guidance from the hub suggests governments need to monitor the private partner’s obligations and ensure the partnership is managed effectively to ensure “value for money” and minimise the risk of disputes during the operation and construction phases.

Chris Heathcote, chief executive of the Global Infrastructure Hub, said: “A great deal of attention is paid to the preparation, procurement and negotiation processes of PPPs.

“However, this is only the start of delivering a successful project, and in many ways the hard work begins after financial close.

“Simply signing a PPP contract and letting it run its course will not automatically lead to the private sector delivering the public service to the level of quality expected and has the potential to undermine the entire process of project preparation and procurement.”

Research by the hub found that up to 48% of PPP contracts globally are renegotiated within the first 12 years. Projects are typically around 25-years long.

It is therefore important that the government’s contract management team has the capacity and resources needed to “successfully manage a renegotiation”, Heathcote said.

The guidance also s ensure that the projects are delivered on time, on budget and that the governments get better value for money from their private sector partners, the hub said.

The tool has been created with global professional services consultancy Turner & Townsend. It provides guidance to increase the quality of PPP infrastructure investments internationally.

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