According
to the World Bank, implementation of Public private partnership programs and
projects have seen a rise since the last two decades or so and are becoming
complementary solutions to traditional public procurements contributing a
significant percentage in infrastructure investments even though designing, structuring
and implementing them remains a
challenge and a complex issue, still.
In
that regard, I discovered that the success of PPP programs in Chile is more comprehensive
and compelling to learn from, particularly for developing world, and I feel worth
re-mentioning here.
Firstly,
Chile not only enabled the PPP program by a decree but also defined the PPP
framework well.
Secondly,
they updated the decree in to a concessions law to accommodate the challenges
they faced along their way, and through the law they set out the institutional
responsibilities and processes for developing and implementing PPPs. They
formed a Concessions Unit in the Ministry of Public Works (MOP) that act as an
implementing agency for all PPPs in the country. They then authorize this unit
to manage the PPP programs from start to the PPP’s lifetime with
clearly-defined processes.
Thirdly,
the National Planning Authority is tasked to review and approve the technical
and economic analysis of the project employing the advisory of technical
groups.
Fourthly,
the Ministry of Finance is tasked to approve PPP tender documents before they
can be published, any changes made during the tender process, and any
significant changes made through the lifetime of the contract. To manage these
oversight responsibilities, the Ministry of finance established a Contingent
Liabilities Unit, which reviews all projects in detail prior to approval, and
calculates the value of the government’s liabilities initially and throughout
the contract.
Fifthly, the Treasury makes all the payments
established in the PPP contract in accordance with the procedures and
milestones stipulated in the PPP contract.
Finally,
they formed a technical panel to resolve disputes that emerge during the
implementation of the project. If the solution proposed by the technical panel
does not resolve the problem, the parties are allowed to escalate their
complaints to the Arbitration Commission or the Appeals Court of Santiago.
In
conclusion, in my opinion, a clearly defined PPP framework, institutional
responsibilities, processes and top government commitments, builds the
confidence and trust of the private sector in Chile to put their capital, to
projects of total investment value of USS$14 billion to public private
partnership arrangements for a longer term, and ultimately a success for Chile.
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