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Appraising PPP Projects

421 Obtaining the Final Approvals

The appraisal exercise, reflected in the appraisal report, should recommend one of the following four decisions to be made by the governmental body charged with making the final green light decision or procurement decision.

  • The project should be procured as a PPP;
  • The project creates economic value but should not be procured as a PPP, in which case the traditional procurement route could be assessed;
  • The project should not be procured at all; and
  • More information is required to make an effective recommendation.

Sometimes more than one public body is involved in the approval process, and authorization may relate to a particular appraisal exercise, depending on the institutional framework of the respective country (see the example in box 4.17). Common approval processes in PPPs are discussed in further detail in chapter 2.7.5.

BOX 4.17: The Case of Chile: An Example of a Decision Framework

In Chile, a set of feasibility exercises are required for the final approval. In the country, three different players are involved in the green light decision: the Ministry of Finance, the Attorney General, and the Social Development Ministry. Each of these bodies requires specific sets of assessments to approve the procurement.

Assessment

Approving Body

Fiscal impacts of direct liabilities

Ministry of Finance

Contingent liabilities estimation

Ministry of Finance

Quantitative Value for Money evaluation

Ministry of Finance

Detailed economic assessment

Social Development Ministry

Legal due diligence

Attorney General

 

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