PPP RESEARCH ROADMAP CIB TG 72 PublicPrivate Partnership
PPP RESEARCH ROADMAP - CIB TG 72: Public-Private Partnership TG 72 Coordinators: Professor Akintola Akintoye University of Central Lancashire Preston, United Kingdom Professor Mohan Kumaraswamy The University of Hong Kong, SAR The University of Hong Kong
Introduction o o o Public Private Partnerships (PPPs) - increasingly used to accelerate economic growth, develop and deliver physical and social infrastructure and to boost value for money and good governance Spectrum of nature and types of PPPs has expanded Many countries/ sub-sectors are seeking the ‘right PPP models’ for their scenarios The University of Hong Kong
PPP - Key Strengths o o o o Optimum risk allocation Whole-life focus – including life-cycle costing & value concerns Maximised design efficiencies with focus on sustainability Robust programming of lifecycle maintenance and facilities management Performance-based payments to the private sector Single point delivery system, reducing interface risk for the public sector client Improved service provision with focus on resilience The University of Hong Kong
PPP – Key Weaknesses • PPP procurement process has often been slow and expensive for both public and private sector…. . So increasing costs and reduced value for money for taxpayer • PPP contracts -insufficiently flexible during operational period, so adjusting to meet changed service requirements is difficult • insufficient transparency on future liabilities to taxpayer and on returns to investors; • inappropriate risks transferred to private sector resulting in higher risk premium to public sector • equity investors in PPP projects perceived to have made windfall gains in some cases - hence concerns about value for money of projects. • More variables, hence more room for errors, mainipulations, collusion… corruption? The University of Hong Kong
n Major changes in the PPP landscape after the 2008 financial crisis, along with changes in stakeholders’ expectations - need capturing in an extended & higher reaching research programme. n Examples of Change Areas ¨ Governance (including legal and structure issues) ¨ Financing modalities ¨ Developed/ Developing countries priorities & differences ¨ Institutional framework ¨ Procurement (including contractual) frameworks ¨ Sectoral priorities & differences (e. g. water sector, transport, etc. ) The University of Hong Kong ¨ Relationship Management from a PPP perspective
TG 72: PPP v CIB TG 72: Public Private Partnership is a Task Group of CIB – launched in Aug. 2008 under the umbrella of CIB W 092 on ‘Procurement’ v First Phase mandate was until end 2011. v Second Phase extended to end 2016. The University of Hong Kong
TG 72: PPP TG 72 addresses PPP at an international level n Provides a global forum to facilitate exchange and synthesis of research on issues (social, economic, political, cultural, environmental, etc. ) that underpin PPP. n Identifies emerging international PPP practices through project lifecycles. n The University of Hong Kong
TG 72: PPP n Aim - to develop a thriving international PPP research community involving practitioners and experts n Also aim to identify champions from each continent to codify and co-ordinate PPP knowledge & practices in that region. Developed a template - for capturing knowledge & practices in PPP development across countries and regions n The University of Hong Kong
TG 72: 2 nd phase Outputs v v v v Hosted progressive meetings to identify the major issues and priorities relating to areas previously identified and subsequent emergent issues. Hosted TG 72 Doctoral Workshop on PPP with Association of Researches in Construction Management. International conference on PPP with W 92 (Procurement Systems) W 070 (Facilities): Joint CIB W 070, W 092 & TG 72 International Conference on Facilities Management, Procurement Systems and Public Private Partnership: Delivering Value to the Community: Cape Town, South Africa, 23 -25 January 2012 Hosted and participated at special PPP sessions in high impact conferences. Organised a 2 nd major International Conference in UK (Preston) with EU Cost Action Programme on PPP in Transport Sector in March 2013 (note: 1 st major International Conference was in Feb. 2009 in Hong Kong in 1 st Phase of TG 72) Delivered a 2 nd Special Issue in a leading CIB encouraged journal (BEPAM) devoted to the findings of TG 72’s work ((note: Special Issue was in another CIB encouraged journal in 1 st Phase of TG 72) Published a PPP book as a part of CIB book series- “PPP: A Global The University of Hong Kong Review” PPP Research Roadmap – to be finalised - based on final-phase
PPP Research Roadmap and PPP Book PPP: A Global Review, 2016 CIB Series TG 72 Public Private Partnerships The University of Hong Kong
Book: Public Private Partnerships A Global Review o o o Provides an international PPP perspective drawing upon fast developing body of principles and practices from many countries. Enables readers to capture the level of maturity of PPP development in countries included in the book, understand similarities and differences in their practices, and compare regulatory frameworks and institutional infrastructure in place to support implementation of PPP Helps to map the ‘best value’ ways forward in The University of Hong Kong different contexts
Structured Book: Sections for each Country Chapter 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Introduction: general information about the country; public sector infrastructure procurement. Origin and Drivers: how and why it started; motivation Policy Framework for PPP: government policy on PPP and its development Financial Context for PPP: financial institution structure and support, sources of funds, refinancing, Institutional Framework: contractual, legal, governance Organisational Structure: Stakeholders, roles and responsibilities; level of control Extent of Use/Adoption of PPP: core sectors, number of projects; amount of investment, longer term ownership Types of PPP: classifications of PPP using World Bank categorisation; changes in PPP usage and extent over time Future Developments: outlook on future infrastructure needs, opportunities for Local and international investors; research & development agenda Conclusions The University of Hong Kong
Countries /Regions included in the Book • • • China Portugal Greece Italy Ireland United Kingdom Belgium Finland Switzerland Indonesia Malaysia The University of Hong Kong • • • USA Canada Hong Kong Thailand Australia Nigeria India Turkey Japan
Messages across the PPPs o o o Recurrent themes are about (i) value for money, (ii) affordability, and (iii) accountability (iv) fragmentation of PPP knowledge (v) transparency and evaluation processes Complexity of PPP contracts and processes: governments do not possess the necessary management skills to set up and follow them up. In a vast majority of the PPPs, where the contract terms were renegotiated this has led to a systematic increase in the payments by the public sector The University of Hong Kong
Research Agenda After our review of the ‘state of the art’ , a proactive strategy for PPP R&D was identified with a specific agenda - - categorised under following key themes. o o o o Theme 1: Financing, and financial models and structure Theme 2: Risk allocation and management Theme 3: Transparency and Accountability including Regulatory and Institutional frameworks Theme 4: Public Policy and Private/Public Sector relationships and behaviours Theme 5: PPP Project Evaluation Theme 6: Contractual structure Theme 7: PPP Performance Indicators The University of Hong Kong
Future Developments o o Given tight budgetary restrictions governments will continue to use PPPs to invest in areas such as health, water, and sanitation or railways The budgetary process of PPPs needs to be more reliable and transparent. Decisions will have to be based on Value for Money, and not on the off-balance sheet attractiveness. It is necessary to have a complete and robust public sector comparator and a review on the risk allocation process. The University of Hong Kong
TG 72 PPP Roadmap Final Draft: Issued in April 2016 for Review and Improvement What are the areas of the draft roadmap that require strengthening and improvement? 1. Conceptual framework 2. State of the Art 3. Future Scenario 4. Development Strategy 5. Research Contribution 6. Research Agenda The University of Hong Kong
PPP Research Roadmap: Conceptual framework o o o What are the primary issues involved in PPP developments? How do these interrelate? What influences them? Who are the stakeholders? What are the critical (make or break) areas of their expertise? What are the characteristics of the most relevant PPP systems, processes and technologies? The University of Hong Kong
PPP Research Roadmap: State of the Art o o o Where are we today? What are the perceived problems, challenges, barriers and needs for improvement? What have been the failure factors in aborted, sub-standard or failed PPP scenarios? Who are the world’s leading countries with proven expertise in PPP and what are the factors that make them successful? What are the factors that have successfully contributed to PPP developments? What are the factors that define a successful PPP development? The University of Hong Kong
PPP Research Roadmap: Future Scenarios n n n What is our vision of where PPP will (and/or should) be in 5, 10 and 20 years? Stakeholders’ opinions on required/envisaged future systems, processes and technologies, Preferred future principles, practices and skills for PPP. The University of Hong Kong
PPP Research Roadmap: Development Strategy o o What is needed in terms of concepts, knowledge, information, tools, and applications for a successful PPP development? What systems, processes, mechanisms are needed? How do we get from where we are today to where we want to be in the future for a successful PPP? The University of Hong Kong
PPP Research Roadmap: R&D Contribution o o How can research and development (R&D) contribute to such a development strategy? What are the requirements for R&D to significantly contribute to PPP success? The University of Hong Kong
PPP Research Roadmap: R&D Agenda n n n What should be the agenda for research for PPP locally and worldwide? What will be the critical and other relevant areas of PPP research and development; the required sequences of development, hence priorities for PPP research? What forms of international cooperation should be set up – (a) within the research community and (b) between research and practice, in order to accelerate the desired forms of PPP development – to deliver greater value to stakeholders. The University of Hong Kong
PPP Development strategy and Research & Development Agenda is categorised under the following THEMES in CIB TG 72 PPP Research Roadmap issued for consultation in April 2016 n n n n Theme 1: Financing, and financial models and structure Theme 2: Risk allocation and management Theme 3: Transparency and Accountability including Regulatory and Institutional frameworks Theme 4: Public Policy and Private/Public Sector relationships and behaviours Theme 5: PPP Project Evaluation Theme 6: Contractual structure ANYTHING Theme 7: PPP Performance Indicators IMPORTANT WE HAVE MISSED? The University of Hong Kong
PPP as a topic of research will always be a moving target – hence both challenging & rewarding. CIB TG 72 inputs and outputs are not just direct contributions, but also meant to inspire others to join and activate R&D initiatives in this exciting, fast moving & potentially rewarding arena. The University of Hong Kong
Interested in seeing the Roadmap? Please visit http: //site. cibworld. nl/dl/publications/pub_406. pdf Feedback welcome! Akintola Akintoye aakintoye@uclan. ac. uk or Mohan Kumaraswamy mohan@hkucc. hku. hk The University of Hong Kong
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