mark williams | partnerships bulletin | 1 december 2016
Greater collaboration between the public and private sectors in emerging markets is transforming property and infrastructure and providing exciting opportunities for economic growth.
What is often lacking in these partnerships is the expertise, experience and credibility to fully unleash the huge potential of PPPs. However, with specialist training it is possible to equip public sector organisations with the capabilities to prepare, procure and manage these valuable partnerships. The benefits of having these skills are very clear, because the more skilled public sector teams manage to secure better value bid prices from the private sector partner and the funders.
PA is the first consultancy able to deliver the newly launched APMG PPP certification programme, the Certified PPP Professional (CP3P), which has been developed by and is awarded from APM Group. We have partnered with the Chartered Institute of Public Finance and Accountancy (CIPFA) to provide this training and have just returned from delivering it to World Bank and government PPP unit staff in Kenya, Uganda and Rwanda.
The certification programme has been developed by a number of regional development banks and the World Bank Group, and was part funded by the Public-Private Infrastructure Advisory Facility to enhance PPP performance globally. And it is clear that it will provide a credible demonstration that an individual has PPP skills that are aligned with international good practice. At a national scale, the benefits of this accreditation programme include equipping organisations with the knowhow to champion vital collaborative infrastructure programmes and projects.
The programme comprises three assessed stages: foundation level (now available); practitioner level – in preparation (expected in the second quarter of 2017); practitioner level – execution (again expected second quarter of 2017). The successful completion of the training and passing of the exams endorses individuals with the CP3P credential.
As part of the training, we needed to understand the national scale of the PPP opportunities in Kenya, Uganda and Rwanda and so ran a “readiness assessment”. This allowed us to consider the views of the World Bank and PPP unit staff and understand their perceptions from an international investor standpoint. The issues covered in this assessment included the institutional framework for progressing PPPs; the state of the economy; the level of political engagement; and support for a PPP pipeline.
We identified that there are a number of PPP projects in the pipeline, including those in procurement, under construction and operating, and that these are supported by strong GDP growth: 5.6% in Kenya, 5% in Uganda and 7.5% in Rwanda. It was also clear that, at an individual level, staff were enthusiastic, had a good level of existing skills and they recognised the importance of having programme/project managers, technical, financial/commercial and legal experts in their teams.
A key principle of the CP3P training and accreditation is to drive the use of a standard global language for describing PPPs. This is not to say that local terminology, legislation, guidance and approach will change, but a CP3P professional will be able to recognise and reconcile the differences between the approach in their own and other jurisdictions.
PA is the only major consultancy that provides training on the UK Treasury’s Better Business Case (BBC) approach, again developed and awarded by APM Group. As a result, we included BBC material in the CP3P training.
We drew on our own experience as practitioners to ensure that the staff understood how to implement a project effectively, based on a strong business case process, and a good PPP arrangement. We wanted to underline the importance of not spending time and resource developing a theoretically perfect PPP arrangement, which is then not implemented.
We were also able to use our experience from working on both the public and private sector sides to provide insights into private sector motives in PPP deals and on the importance of post contract signature contract monitoring.
It is vital to recognise that these are long-term (25 years) relationships where the public value/value for money of a PPP accrues throughout the operational phase and so these projects need ongoing scrutiny.
These partnerships are going to remain high on the agenda in many countries. Property and infrastructure spending is forecast to hit $9trn by 2025, a proportion of which will be PPPs.
In addition, the World Bank has approved 407 loans with a PPP component, between 2002 and 2016 totalling $15.6bn, and the UK Defence Infrastructure Organisation has announced that it will explore and analyse alternative funding sources, such as PF2, to meet £2bn of required investment.
All that means that the CP3P training and accreditation is a very timely addition to the support available to those embarking on PPP projects.
Mark Williams is property and infrastructure lead at PA Consulting Group