{"id":56893,"date":"2022-05-12T10:45:08","date_gmt":"2022-05-12T10:45:08","guid":{"rendered":"https:\/\/revistaidees.cat\/?p=56893"},"modified":"2022-05-13T08:10:00","modified_gmt":"2022-05-13T08:10:00","slug":"public-private-partnerships-and-sustainable-development-goals","status":"publish","type":"post","link":"https:\/\/revistaidees.cat\/en\/public-private-partnerships-and-sustainable-development-goals\/","title":{"rendered":"Public-Private Partnerships and Sustainable Development Goals"},"content":{"rendered":"\n

In December 2021 I participated in a major Public-Private Partnership (PPP) conference in Istanbul, attended primarily by participants from emerging economies. There was considerable enthusiasm for PPPs as a mechanism to help developing countries achieve their sustainable development goals (SDGs). This continued enthusiasm was interesting in the light of reduced global keenness for PPPs over the last two years, due to the fact that unexpected COVID pandemic induced force majeure<\/em> risks in the projects [1]<\/a>1 \u2014 See the following article for interesting perspectives: Baxter, D. (2020) 157 PPP Practitioners from 69 Countries Share their Insights on the Status of PPPs in the Pandemic Epoch [Disponible en l\u00ednia].\n<\/span><\/span>. It was noteworthy that one of the distinguished PPP conference speakers made the following comment during his speech \u2013 \u201cPPPs need to be seen as a tool to help countries achieve their SDGs rather than merely a procurement mechanism.\u201d His comment addressed the crux of the matter. PPPs will remain a useful development tool if we change our approach to implementing them based on lessons learned.<\/p>\n\n\n\n

What are the Public-Private Partnerships?<\/h5>\n\n\n\n

\u00c9It is important that we understand what PPPs are before we consider them as development tools. Fortunately, there is a general consensus on what PPPs are. The World Bank describes <\/a>PPPs broadly as \u201cA long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.\u201d The United Nations Economic Commission for Europe (UNECE) has a wider description <\/a>that states that PPPs are \u201cthe mechanism for financing, designing, implementing and operating public sector facilities and services.\u201d UNECE also refers to PPPs including \u201cinnovative methods used by the public sector to contract with the private sector, who bring their capital and their ability to deliver projects on time and to budget, while the public sector retains the responsibility to provide these services to the public in a way that benefits the public and delivers economic development and an improvement in the quality of life.\u201d<\/p>\n\n\n\n

So, while PPPs at the highest level can be described as a long-term partnerships between the public and private sectors to deliver services or build government assets, when one delves deeper it becomes clear that PPPs are formal contractual agreements between the public and private sector that leverage private sector innovation and financial resources and which require appropriate sharing and allocation of risk. Additionally, if the formal contractual partnership is successful, the private sector is remunerated according to contractually required performance based on pre-determined outcomes.<\/p>\n\n\n\n

It is important to caution those who are exploring PPPs as a tool for development that PPPs should not be confused with partnerships between the public and private sectors (also sometimes called PPPs) which are philanthropic in nature and which are often driven by corporate social responsibility (CSR) considerations.<\/p>\n\n\n\n

Why PPPs?<\/h5>\n\n\n\n

The primary reason for implementing PPPs in emerging economies is the public sector funding gap that developing countries face. They often have limited financial resources to develop critical infrastructure or deliver urgently needed services that are strategically required to achieve their national sustainable development priorities. Because of this need the public sector is inclined to reach out to private sector developers and investors to bridge this gap.<\/p>\n\n\n\n

\n
\n

The primary reason for implementing Public-Private Partnerships in emerging economies is the public sector funding gap that developing countries face<\/p><\/blockquote>\n<\/div>\n\n\n\n

\n

Reaching a decision to embrace PPPs requires considerable due diligence and an acceptance that feasibility study findings might conclude that candidate projects might not be implementable as PPPs. If proposed PPP projects are well planned, proven to be commercially and financially viable, have clear desired outcomes, and are procured competitively and transparently they have a chance for success. Additionally, institutional capacity building should be implemented to strengthen implementing parties and enabling environments should be codified to reinforce the legal parameters within which PPPs and implemented and operate.<\/p>\n<\/div>\n<\/div>\n\n\n\n

Poorly Implemented PPPs Are a Risky Proposition<\/h5>\n\n\n\n

Unfortunately, in too many cases, PPPs are poorly implemented and procurements are rushed. Proponents of PPP projects need to be realistic about PPPs and understand challenges that they are facing. If not, a laissez-faire<\/em> approach will increase project exposure to risks and the possibility of project failure. Regrettably, there are too many accounts of avoidable PPP failures and delivery shortcomings that have led to dissatisfaction, in certain circles with PPPs.<\/p>\n\n\n\n

In a 2014 report <\/a>written by David Hall titled – \u201cWhy Public-Private Partnerships Don\u2019t Work \u2013 The Many Advantages of the Public Alternative\u201d – the potentially shadowy side of PPP processes is highlighted. Revealed PPP weaknesses include \u201cconfidential negotiations to protect secrecy, lack of public consultation, lots of false promises, and incredibly complex contracts designed to protect corporate profits.\u201d Additionally, the specter of bribery, limited implementation capacity, and poor understanding of PPPs scope and complexity by public sector employees is also raised in the report.<\/p>\n\n\n\n

This prognoses is unfortunate as PPP have great potential if they are implemented in a transparent manner by skilled practitioners who are supported by an enabling environment (legal framework). Successful implementation of PPP projects therefore requires qualitative and quantitative screening processes that help decision makers decide whether a PPP approach is appropriate for a project under consideration.<\/p>\n\n\n\n

A New Paradigm to Implement Successful PPPs in Emerging Economies?<\/h5>\n\n\n\n

We have to ask what can be done to implement successful PPPs in emerging economies? UNECE has launched an initiative that provides qualitative project screening guidance (best practices) for emerging economies that wish to successfully use PPPs as a tool to achieve their SDGs and avoid many of the mistakes that have been made in the past. UNECE\u2019s \u201cGuiding Principles on People-First Public-Private Partnerships (PPPs) for the United Nations Sustainable Development Goals (UN SDGs)<\/a>\u201d introduces best practices that should be embraced by PPP proponents in emerging economies.<\/p>\n\n\n\n

The aptly named \u201cPeople First Public Private Partnership\u201d (PfPPP) approach (paradigm) has identified specific outcomes for PPPs that can enhance PPP\u2019s design and implementation by emerging economies if adopted. They include the following:<\/p>\n\n\n\n