Purpose and Benefits
The PPP Certification Program Guide, referred to as the PPP Guide is the Body of Knowledge (BoK) on public-private partnerships (PPPs), will help public officials and their advisors implement efficient, sustainable PPPs. The PPP Guide is part of the family of CP3P credentials that, once mastered, enable PPP practitioners to achieve the title “Certified PPP Professional” under the auspices of the APMG PPP Certification Program. The APMG PPP Certification Program, referred to as the Certification Program is an innovation of the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the Inter-American Development Bank (IDB), the Islamic Development Bank (IsDB), the Multilateral Investment Fund (MIF), the Public-Private Infrastructure Advisory Facility (PPIAF) and the World Bank Group (WBG).
Although the underlying principles of PPPs are the same everywhere, circumstances around the world dictate that government officials apply these principles in ways that are specific to their nation’s needs. The PPP Guide identifies the underlying principles and the elements of good practice that are applicable in most circumstances in emerging markets and developing economies, while recognizing the need for local variations. In this respect, the PPP Guide complements existing guidance materials on PPPs prepared by governments and international institutions, such as multilateral development banks (MDBs).
The primary focus of the PPP Guide is on emerging markets and developing economies, but much of it is also relevant to developed economies. Developed economies are at varying levels of maturity in their use of PPPs and may have become dependent on practices that have been tailored to their situations over time. They may benefit from knowledge of good practices that have evolved more recently in emerging markets and developing economies.
The PPP Guide focuses specifically on privately-financed PPPs because these are often more complex and challenging than PPPs that lack private finance. Despite the focus on privately-financed PPPs, much of the content here also reflects good practice for other PPP models.
Adopting internationally recognized good practice, as described in the PPP Guide, offers significant benefits for governments, including the following:
- It increases the likelihood of developing and implementing a successful PPP program that delivers the right projects effectively and efficiently, and it provides Value for Money solutions to society’s infrastructure needs;
- It facilitates access to international investors. By following internationally recognized good practice as set out in the Guide, a government can increase the attractiveness of its PPP program to these businesses, which in turn can further improve the Value for Money outcomes of the program; and
- It aids knowledge transfer and equips public officials and their advisors to better learn from the vast pool of international experience in PPPs.
The private sector can also benefit from the PPP Guide, as it can provide private sector employees of PPP investors, financiers, construction companies, and infrastructure operators, as well as advisors and consultants, with an appropriate understanding of the motivations, objectives, and concerns of governments — their future public partner. In addition, since many private sector organizations involved in PPPs are international businesses, understanding internationally recognized good practice can assist these businesses in accessing new markets more successfully.
By helping public officials and their advisors create efficient, sustainable PPPs, and by promoting private sector understanding of and confidence in PPP programs, this PPP Guide will enhance the ability of governments to fill the global infrastructure gap.
The Audience for the PPP Guide
The PPP Guide is intended for individuals who are working on any aspect of a PPP, or individuals with an interest in PPPs. Its content is relevant to both public and private sector employees, and to countries at all levels of development.
The Structure of the PPP Guide
The PPP Guide consists of nine chapters and a glossary that defines common terms.
Chapter 1 – PPP Introduction and Overview explains the focus of the PPP Guide and describes the particular features of a PPP contract, the variations in terminology and contract structure, the potential benefits of PPPs as a procurement option, the particular challenges and potential pitfalls, the need to develop a PPP framework, the need to carefully manage the PPP process, and the main elements of the PPP process.
Chapter 2 – Establishing a PPP Framework describes the elements of a PPP framework and the challenges that arise. The chapter includes guidance on PPPs’ strategic management and governance.
The remaining chapters guide readers through the phases of a typical PPP cycle.
Chapter 3 – Project Identification and PPP Screening describes the main features of a robust project identification process, and explains how to assess the suitability of a project for PPP delivery. The chapter also includes an introduction to the cost-benefit analysis to confirm the Value for Money (VfM) of projects.
Chapter 4 – Appraising PPP Projects describes the need for and approaches to PPP project appraisal and preparation, including an introduction to commercial feasibility analysis and other related analyses that should be undertaken before a government decides to invest in and procure the PPP project.
Chapter 5 – Structuring and Drafting the Tender and Contract describes how to design a PPP tender strategy and structure a PPP contract. The chapter explains financial risk structuring, revenue, and payment mechanisms. It outlines the most common and advisable approaches to risk allocation and the key requirements of the Request for Qualifications and Request for Proposals. The chapter also describes how to incorporate the contract structure and tender strategy into the tender package.
Chapter 6 – Tendering and Awarding the Contract describes the main challenges and requirements for managing the tender process up to executing the contract.
Chapter 7 – Strategy, Delivery and Commissioning explains the need for and importance of a proactive contract management strategy, the main features of a contract management function, and the main challenges of contract management during the construction phase of a PPP project.
Chapter 8 – Operations and Hand-Back describes the main challenges and particularities of contract management during the operations phase of the contract, up to and including the hand-back of the asset upon the contract’s expiration.
The Relationship between the PPP Guide and the Credentials
This PPP Guide has been designed as a stand-alone publication that compiles and describes elements of good practice for those considering and implementing a PPP. This Guide is the core of the APMG PPP Certification Program, which offers a brand-new credential, called CP3P, for PPP practitioners.
A Note about Examples and Case Studies in the PPP Guide
Infrastructure projects are large and complex, and they always involve a range of challenges. The success or failure of a project can only be determined once the long-term operational outcomes are known. It cannot be judged based on a single element or event. The PPP Guide uses a range of case studies and examples to illustrate both successful and less successful practices. By including case studies and examples, the PPP Guide makes no judgment about the individuals, projects, or governments involved, or the overall success or otherwise of the projects concerned. Rather, the PPP Guide demonstrates how those involved in PPPs have learned through experience — and, no doubt, will continue to do so.
The APMG and World Bank Group teams that worked on this project extend their gratitude to all those involved in the development of the PPP Guide. The team of authors around the world, as well as the professional reviewers of the PPP Guide, have played a crucial part in this publication. Thanks also goes to the Consultative Committee, comprising representatives from the MDBs and PPIAF, for conducting the final reviews of the document. For further information on the teams that created this PPP Guide, please see the author and reviewer pages.