You are here

Share:

Project Identification and PPP Screening

31. Objectives of the Project Identification and Screening Phase: Where We are in the Project Cycle

The PPP process is composed of a number of phases: identifying the project and screening it as a PPP, appraising the project, structuring the procurement process and the contract, tender and award, and finally managing the contract.

This process requires a significant amount of time and resources. To ensure that those resources are well-spent, reduce the likelihood of failure, and guarantee the procurement process will run more efficiently, governments must carefully choose which projects are included in the PPP pipeline and developed to feasibility level.

An effective method to ensure that those resources are well spent is a two-step approach: preliminary analysis which is developed within the Screening Phase (this chapter of the PPP Guide) and full appraisal (chapter 4 of the PPP Guide). This will avoid the risk of unnecessarily consuming resources in the Appraisal Phase. See box 3.1.

BOX 3.1: Learning Objectives

This chapter covers the activities from project identification to approval of the project to be developed as a PPP, as well as readiness to initiate the next phase (Appraisal). This chapter will allow the reader to:

  • Ensure a project has sufficient economic merit to proceed;
  • Avoid the risk of sinking resources into the analysis and structuring of a non-feasible PPP project; and
  • Prepare and get ready for the next phase: Appraisal.

The process assumes that a public need to provide a service has already been identified. Thereafter, solutions for that need will have to be considered so as to select one, which will be screened as a PPP during the course of this phase, thereby converting the project cycle into a PPP project cycle[1].

This chapter then explains the process and the information required in order to pre-assess the project, and to screen it as a potential PPP — that is, to determine, on the basis of preliminary information, whether it is likely that a project will be successfully implemented and will provide value as a PPP. It also identifies the main direct and indirect stakeholders and risks involved in the project, which may impact it positively or negatively and which must be considered in the next phase: Appraisal.

This chapter will present the main items to be covered in a screening report, a summary of the outcomes of this phase, and the needs for the next step.

The screening process is one step in a progressive analysis. This analysis can take much time to be developed. Governments commonly have unrealistic expectations of how quickly the process can be completed. Governments also have a tendency to take a long time to decide to do a PPP, and when this decision is taken there is often significant pressure to implement the project as fast as possible. This can lead to poor outcomes later on.

Trying to mitigate some of these pitfalls, the screening process is intended to guarantee the best allocation of public resources and to meet the needs of society. The effort that the public sector spends in this phase to identify the best project will provide benefits later, as changes made further along in the project cycle as a result of poor or inadequate work in this phase commonly cost more, not only in financial terms but also in time.

 

[1] In practice, a project will usually have already been selected and a technical solution identified, probably in the course of an infrastructure plan (for example, a transport infrastructure plan) or a specific program (for example, a health program). The project will then flow directly into the PPP screening stage.  However, the flow of the process described in this PPP Guide includes the project identification in this phase; it highlights the importance of selecting the optimal technical solution to achieve PPP project success. The PPP option is just an option to procure the project, which will not convert a weak project (in economic and social terms) into a valuable or optimal solution. Rather, it is intended to protect and maximize the Value for Money of the project. 

Add new comment

By submitting this form, you accept the Mollom privacy policy.