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Body of Knowledge:
PPP Introduction and Overview - Appendix B - Sharia Finance
The combined use of an istina’a and ijara can be illustrated in figure B1. as follows.
FIGURE B1: Combined Use of Istina’a and Ijara
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Body of Knowledge:
PPP Introduction and Overview - Appendix B - Sharia Finance
Islamic financing of a PPP project normally assumes an asset-based project financing that requires the transfer of tangible/real assets. However, there may be some situations where the transfer of tangible/real assets is not permitted. For example, if a PPP project asset is of cultural and/or...
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Body of Knowledge:
Establishing a PPP Framework
A PPP framework is best understood as the established procedures, rules and institutional responsibilities that determine how the government selects, implements and manages PPP projects. By setting procedures and rules, good PPP practice can be established within the government. This has the effect...
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Body of Knowledge:
Establishing a PPP Framework
A good PPP framework aims to ensure that the right projects are selected as PPPs, and that they are developed, delivered and managed in a structured, transparent and efficient way. Equally, a good framework minimizes the risks that a PPP project will not deliver Value for Money (VfM).
PPPs involve...
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Body of Knowledge:
Establishing 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...
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Body of Knowledge:
Establishing a PPP Framework
As introduced in chapter 1.9, governments should adopt a structured and programmatic approach if they want to rely significantly on the PPP model for new infrastructure development. This is a way to attract stronger and more consistent interest from the private sector. In this sense, a PPP program...
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Body of Knowledge:
Establishing a PPP Framework
The scope of the PPP framework indicates the types of projects for which the framework will apply. Scopes are generally defined by jurisdiction, sector, size, and contract type. It is good practice for designers of a framework to consider each of these dimensions, and to be explicit in the...
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Body of Knowledge:
Establishing a PPP Framework
To be effective, PPP frameworks need to be documented. They also have to have some enforcement mechanisms. Governments need to make the following decisions.
How will the PPP framework be made binding on government officials?
How will the PPP framework be communicated to all stakeholders?
What will...
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Body of Knowledge:
Establishing a PPP Framework
Countries vary widely in how they document and give force to PPP frameworks. Countries with “common law”[27] legal systems tend to rely on policy documents and administrative guidance materials. Countries with “civil law”[28] legal systems are more likely to enact the PPP framework in statute law,...
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Body of Knowledge:
Establishing a PPP Framework
The diversity of legal traditions and PPP types shows there is no single best way to document and give force to a PPP framework. Rather, the right way to establish a PPP depends on the administrative and legal traditions in the country, and the government’s objectives. This section looks at the...
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Body of Knowledge:
Establishing a PPP Framework
Regardless of the tradition within which a PPP framework is constructed, it is not constructed in isolation. Rather, it builds on, incorporates, and modifies the pre-existing frameworks for contracting, procurement, and financial management in government. It makes sense to use as much of the...
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Body of Knowledge:
Establishing a PPP Framework
Thus far the discussion has assumed that a government is creating a framework to guide its own actions. However, where there are multiple levels of government, and there may be instances when one level may wish to empower, influence, or control a lower level of government. In federal systems,...
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Body of Knowledge:
Establishing a PPP Framework
The framework should provide guidance on each stage of developing and implementing a PPP project from initially identifying candidate projects, to managing PPP contracts throughout the project lifecycle.
Governments need to ensure that only ‘good’ PPP projects are developed. These are PPPs that,...
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Body of Knowledge:
Establishing a PPP Framework
The process starts with project origination, typically following the same or using a similar process as for originating public sector investment projects, while screening projects for their potential suitability as PPPs. Screening at this stage is usually indicative, limited to the information...
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Body of Knowledge:
Establishing a PPP Framework
Candidate projects that survive the “screening” are then developed and appraised. Again, this is an iterative, or multi-stage, process. The appraisal report, often called a “Business Case”, is typically the basis for approval to proceed with the PPP transaction.
In describing the framework in this...
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Body of Knowledge:
Establishing a PPP Framework
Before the PPP transaction can be implemented, the tender documents and the draft PPP contract need to be prepared. To prepare the tender documents, the evaluation criteria and proposal requirements must be developed. To prepare a contract, the outputs, responsibilities, and risk allocation need to...
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Body of Knowledge:
Establishing a PPP Framework
A well designed and implemented procurement is central to achieving Value for Money from the PPP. Procurement processes can include marketing the PPP, checking the qualifications of bidders, inviting and evaluating proposals, interacting with bidders during the process, selecting the preferred...
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Body of Knowledge:
Establishing a PPP Framework
Finally, having executed the contract, the PPP enters the final and longest “stage” – managing the contract throughout its operational phase. The challenge is to ensure the PPP provides Value for Money throughout the contract, not just at the Construction Phase. This typically requires ongoing...
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Body of Knowledge:
Establishing a PPP Framework
As an alternative approach to originating and developing PPP project ideas, some governments accept unsolicited or privately-initiated PPP projects. By welcoming “privately-initiated” projects, governments can harness information and ideas that private firms have about how to provide services...
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Body of Knowledge:
Establishing a PPP Framework
Institutional responsibilities for PPPs, that is, which entity will play what role at each step of the process will need to be defined in the framework.
Institutional arrangements differ widely from place to place. This depends on the particular needs of the PPP program and the pre-existing...
