PPP Contracts in an Age of Disruption
Disruptive technologies present extraordinary opportunities for progress, with cleaner, more efficient, and more resilient infrastructure services. These opportunities should be seized and celebrated. However, changes from the status quo create pain points that must be carefully managed, in particular when long-term PPP contracts are structured based on a financial model on which financing relies. Unraveling such commitments has proven contentious and difficult.
The increasing number of global disruption raises many questions;
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How can private sector adoption of emerging technologies be supported within existing and future PPP projects?
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How can new technologies be harnessed to strengthen PPP projects going forward?
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Which parties should bear the burden of the risk of obsolete and stranded assets?
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And how can governments “future-proof” their pipeline PPPs?
The sections addresses these questions systematically by;
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defining disruptive technologies and their potential impacts on infrastructure projects and PPP contracts;
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outlining different policy options during the project development phase that encourage private sector adoption of innovative technology while improving resilience towards technological disruption; and
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discussing considerations for PPP contract management as well as future contracts to embed flexibility that allows for the integration of new technologies and accounts for technology disruptions that will inevitably occur.
To learn more visit the Executive Summary or the Sections below.
Acknowledgements
The preparation of this report and the country case studies was led by the World Bank. The authors of this report are Jenny Jing Chao (Task Leader, Senior PPP Specialist) and Susanne Foerster (Consultant) from the Infrastructure Finance, PPP & Guarantees Group (IPG). The report was developed under the guidance of Fatouma Ibrahima (Practice Manager).
The country case studies benefited greatly from the valuable contributions and perspectives of James Harris, Fred Drap, Chris Melville, and Akshay Jaitly.
Peer review comments were gratefully received from Christina Paul, Jeffrey Delmon Mikel Tejada Ibanez, and Daniel Benitez.
The guidance was partly funded by the Public-Private Infrastructure Advisory Facility (PPIAF). PPIAF, a multi-donor trust fund housed within the World Bank, provides technical assistance to governments in developing countries. PPIAF's main goal is to create enabling environments through high-impact partnerships that facilitate private investment in infrastructure. For more information, visit www.ppiaf.org.
Sections
