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Handbook for Integrating Risk Analysis in the Economic Analysis of Projects
The purpose of this Handbook is to support the development of a practical and operationally relevant methodological framework for the analysis of risk in project design and project economic analysis.
Library
Understanding Options for Public-Private Partnerships in Infrastructure (Delmon, Jeffrey. 2010)
Sorting out the forest from the trees by Jeffrey Delmon
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Contract Expiry and Asset Handover
The final task in managing a PPP contract is to manage the transition of assets and operations at the end of the contract term. The approach to this transition should be clearly defined in the…
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Dealing with Change
Over the life of a typical PPP contract—10 to 30 years—developments will occur that could not have been predicted when the contract was signed. It is also likely that the parties will dispute…
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Monitoring and Managing PPP Delivery and Risk
To achieve the whole life value for money promised by a PPP, government needs to make sure that the planned allocation of responsibilities and risks is put into practice, monitored, recorded and…
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Establishing Contract Management Structures
Establishing the contract management structures means defining responsibilities for contract management within government, and how the relationship with the private party will be managed. It also…
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Achieving Contract Effectiveness and Financial Close
Once the government and the preferred bidder have signed the PPP contract, they are contractually committed to implementing the PPP. However, there are several additional steps before project…
Library
Risk Mitigation Instruments in Infrastructure: Gap Assessment
This report is designed to help policy-makers, multilateral and bilateral financial institutions and the private sector to navigate and understand the current state of affairs of Risk Mitigation…
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Managing the Bid Process
The central step of procuring PPP projects is generally managing the bid process. This may follow pre-qualification to select the participating bidders (although not always, as described in Deciding…
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Qualifying Bidders
The next step is often to carry out a bidder pre-qualification process to select the companies and consortia that will be invited to submit proposals. Not all countries select qualified bidders in…
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Marketing the PPP
Marketing the PPP helps attract bidders and investors. This is particularly important in the early stage of a PPP program—governments need to make a positive effort to build bidder interest to…
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Deciding the Procurement Strategy
The first step in managing a PPP transaction is defining the procurement strategy. This includes defining the following key aspects of the procurement process:Pre-qualification—whether to use a pre-…
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Termination Provisions
In most cases, PPP contracts have a defined term. The contract typically sets out the contract termination date and arrangements for contract close and asset handover. The PPP contract, or in some…
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Defining Clear Policy and Processes
The World Bank report on the Framework for Unsolicited Proposals (WB 2017d) discusses the need for a clear framework on USPs. Governments must first decide whether to allow USPs as part of their PPP…
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Dealing with Intellectual Property and Confidentiality
Legal provisions for the protection of proprietary information and intellectual property rights encourages investors to submit innovative unsolicited proposals. At the same time, the government needs…
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Creating Competitive Tension
Many private companies submit unsolicited proposals with a view to directly negotiate a contract for the proposed project—creating the problems described in Benefits and Pitfalls of Unsolicited…
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Benefits and Pitfalls of Unsolicited Proposals
Considering unsolicited proposals allows governments to benefit from the knowledge and ideas of the private sector. For example:USPs may allow governments to identify and prioritize projects, help…
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Dispute Resolution Mechanisms
Because PPP arrangements are long-term and complex, contracts tend to be incomplete, as described in Adjustment Mechanisms. Where this creates room for differences in interpretation, disputes can…
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Adjustment Mechanisms
PPP projects are long-term, and are often risky and complex. For example, a new toll highway faces obvious risks such as fluctuations in demand, but also hidden risks such as demand to provide more…
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Payment Mechanism
The payment mechanism defines how the private party to the PPP is remunerated. Adjustments to payments to reflect performance or risk factors are also important means for creating incentive and…
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Performance Requirements
The PPP contract should clearly specify what is expected from the private party in terms of the quality and quantity of the assets and services to be provided. For example, this could include…
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Translating Risk Allocation into Contract Structure
Much of the PPP literature focuses on risk allocation. Some of it can give the impression that, once a preferred risk allocation has been settled, this can somehow translate smoothly into a detailed…
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Allocating Risks
Allocating risk, in the context of a PPP, means deciding which party to the PPP contract will bear the cost (or reap the benefit) of a change in project outcomes arising from each risk factor.…
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Identifying Risks
The first step toward structuring the PPP is often to put together a comprehensive list of all the risks associated with the project. Such a list is known as a risk register. In this context, a risk…
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Assessing the Ability to Manage the Project
A less common but still highly relevant component of project assessment focuses on the ability of the procuring authority to manage the delivery of the project, i.e. project preparation, tendering,…