Region: Europe and Central Asia
Country: Afghanistan
Topic: Transparency, Good Governance and Anti-corruption
Keywords: About PPP, Knowledge Lab
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Document(s):
Document Summary:
The Diagnostic Report examines the political, legal, and institutional environment for the disclosure of information on PPPs in Afghanistan. Based on these findings, benchmarked against the World Bank’s disclosure framework, the Diagnostic Report provides a gap assessment of the environment for PPP disclosure in Afghanistan. It makes specific recommendations to improve disclosure, including recommended customized guidelines for PPP disclosure in Afghanistan.
Document Details:
In May 2016, the World Bank published a Framework for Disclosure of Information in Public-Private Partnerships (PPPs), which provides a template for the preparation of a PPP Disclosure Diagnostic that assesses the transparency and accountability of PPP programs based on the disclosure of information. Between March 2020 and October 2020, a joint Government of the Islamic Republic of Afghanistan and World Bank team conducted a study on PPP disclosure in Afghanistan, using the World Bank’s PPP Disclosure Diagnostic template. This study led to the preparation of a PPP Disclosure Diagnostic Report (hereinafter “Diagnostic Report”) for Afghanistan. The Diagnostic Report examines the political, legal, and institutional environment for the disclosure of information on PPPs in Afghanistan. Based on these findings, benchmarked against the World Bank’s disclosure framework, the Diagnostic Report provides a gap assessment of the environment for PPP disclosure in Afghanistan. It makes specific recommendations to improve disclosure, including recommended customized guidelines for PPP disclosure in Afghanistan.
The findings suggest that there has been some movement toward greater transparency and openness in all areas of government in Afghanistan, but that there is still scope for further progress given that relevant legal reforms are relatively new and still to be fully institutionalized. Article 50 of the 2004 Constitution of Afghanistan ensures that citizens “have the right of access to information” from public institutions. This principle was enhanced substantially with the enactment of the Access to Information Law in 2014,1 which was subsequently revised in 2019.2 The law further guarantees access to information and aims to “ensuretransparency, strengthen the culture of provision of information, promote people’s participation in good governance, ensure accountability in the conduct of institutions, and combat corruption”.
The legal and institutional frameworks for PPPs in Afghanistan are relatively recent, and these frameworks are still in the process of being institutionalized. Their impact on improving PPP disclosure is therefore not significant. Afghanistan’s PPP legislation was initiated in 2016 through the PPP Law,3 issued by Presidential Decree. The National PPP Policy was subsequently issued in 2017,4 and the PPP Law was revised in 2018. Draft PPP Regulations have been prepared but are yet to be approved. Although these documents contain comprehensive guidance on most aspects of the PPP project cycle, there is limited information on disclosure. Despite references to a disclosure policy and an approach to confidentiality that reflects international best practices, there is limited practical guidance on the specific project information that should be disclosed or kept confidential.
Moreover, given that the PPP program in Afghanistan is just beginning, contracting entities have limited PPP capacity and experience and no specific experience on PPP disclosure. The Public-Private Infrastructure Database5 indicates that seven PPP projects, with a total investment commitment of US$259.5 million, reached financial closure between 2003 and 2019 in Afghanistan. These include two telecom projects that date back to 2005 and 2006, prior to the enactment of PPP legislation. More recently, four energy generation projects have been developed since 2017 and there are approximately 150 additional projects at various stages of development in the PPP pipeline across the energy, transport, and health sectors.
There is limited PPP-related information available in the public domain in Afghanistan. The Central Partnership Authority (CPA) recently launched a new website (not yet fully populated), there is some PPP- related information published on the Ministry of Finance website, and procurement information is published on the National Procurement Authority website. Further, sector-specific information related to energy generation projects is available through the website of Da Afghanistan Breshna Sherkat, the national power utility. In part, the lack of aggregated, organized information on the PPP program reflects the challenges to effective PPP disclosure identified in this report. These include limited disclosure guidance within the PPP legal framework, limited human and financial resources for records management and to collate PPP disclosure information (for example, to populate and run the CPA’s website), and lack of enforcement of sanctions for non-disclosure of information.6
Given these findings, it is necessary to develop a synergized framework and process for optimal PPP disclosure practices. This Diagnostic Report recommends a systematic structure for proactively disclosing information through customized guidelines for disclosure in PPPs in Afghanistan, including the type of project information to be disclosed, the form of disclosure, and the timelines and responsibilities for disclosure. The report suggests the use of predefined standards, tools, and mechanisms, to facilitate and encourage adherence to the disclosure framework in accordance with existing legislation. It provides recommendations to improve the 2018 PPP Law to strengthen disclosure-related clauses and guidance for further disclosure clauses in the PPP Regulations that are currently being drafted. The report also proposes standard contract clauses on disclosure that could be incorporated within future PPP contracts.
The Government of the Islamic Republic of Afghanistan intends to use this framework as a tool to improve the transparency and accountability of its PPP program. Robust disclosure of PPP information can significantly improve PPP governance and performance and help the PPP program achieve better value for money. The implementation of the recommended disclosure framework supports the government’s objective of a sustainable PPP program.
Updated: April 12, 2022