1.2 What is in a PPP Framework?

A PPP framework should guide governments and private partners through each step in developing a PPP, ensuring that projects are well structured and delivered in line with expectations. The PPP framework will achieve this by outlining procedures and decision rules for various institutions, and by ensuring effective public financial management and oversight.

A PPP framework should articulate its objectives. These make explicit what the government wants the PPP framework to achieve. They also provide a basis for subsequent evaluation of the framework. The objectives of the PPP framework are discussed in detail in section 1.3.

A good framework will also set out its scope, that is, the types of projects to which it applies. The framework may be most effective for certain kinds of projects within certain sectors. For example, it may not be sensible to have PPPs of a low value follow the same rigorous procedures as those that apply to high value PPPs. The scope of the PPP framework is discussed in section 1.4.

The PPP framework will need to be developed taking into account the legislative and administrative contexts. The PPP framework will often be embodied in PPP specific policy documents or legislation. The legal and administrative instruments that can be used in PPP frameworks are outlined in chapter 1.9.

PPP frameworks typically define:

• Procedures: What things need to be done, by whom, in what order, to allow the right decision to be made and the right actions to be taken? For example, the Appraisal Phase could set out how a specified agency in government will gather and process information to assess whether the project would be best done as a PPP. The kinds of procedures that should be contained in a PPP framework are explored in section 1.6;
• Decision criteria: How will decisions be made at each step? Again, at the Appraisal Phase, one criterion should be “whether the public interest will be better served by doing this as a PPP or as a conventional public sector project”. The types of decision criteria that should be contained within the framework are also explored in section 1.6; and
• Institutional responsibilities: Which entities are responsible for which tasks and objectives? For example, a specialist PPP unit may be responsible for assessing whether a project is best done as a PPP or not; the cabinet may be responsible for making a decision at to whether a project should proceed as a PPP; the ministry of finance may have a responsibility to advise on fiscal commitments made to a PPP project. How the PPP framework should identify and assign responsibilities among institutions is set out in section 1.7.

The PPP framework should set also out how fiscal commitments are managed (section 1.8) as well as how proper oversight for the program is established (section 1.9).