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Presentation of Centre of
Excellence's UNECE ICoE PPP
Marc Frilet
Managing Partner « Frilet – Société d’Avocats »
Chair of the Management Committee of GcilA
Vice-President of the French Institute of International Legal Experts (IFEJI)
Vice-chair of CICA PPP-Working Group
Board member of ETIC-PPP
Fellow American College of Construction Lawyers
Developing pipelines of Concessions and other PPPs for essential public
services: the role of the UNECE international Center of Excellence
For over 30 years, CICA and IFEJI members have been confronted to many issues and in developing
Concessions and other PPPs in many countries.
CICA and IFEJI decided 10 years ago to set up working groups comprising public and private
practitioners covering a wide range of sectors: economy, finance,legal (drafting regulations and
contracts institutional framework, alternative dispute resolution, etc.)
Experts of those working groups have participated or organized numerous programs with multilaterals
and on the ground, exchanging, training and contributing to preparation and negotiation of contracts
to the drafting of regulations, etc.
In the last 5 years, several of those experts have participated to the UNECE program as members of
PPP Team of Specialists.
UNECE has proposed to CICA and IFEJI to set up an International Center of Excellence “policies, laws
and institutions” (ICoE) in France: this Center will be launched on May 21st in Paris
Lessons learnt and way forward (1)
1.
The rate of projects in distress for essential public services is more than
alarming, it is a deterrent for future projects (excerpt from WB chart)
(Source: Mark Moseley)
Lessons learnt and way forward (2)
2. Learning by doing for PPP is not an option
3. Private sector does not invest in the dark (Cannes G20 in 2011)
4. Without well designed regulations and equitable standard attracting the private
sector in financing construction and operation of essential public services, it will be
impossible to bridge the public investment gap and the post 2015 development
goals have no chance to be reached
5. The situation may be redressed but not under business as usual
6. Top priorities:
 avoid many misunderstanding on the definition and nature of PPP
 Identify the form of delivery to prioritize in emerging economies and less
developed countries
PPP NEED OF DEFINITION
PPP is not:
•
Global Design & Build or Design, Build & Operate contract for the Construction of
Public Building or Public Infrastructure paid by Public Authority: This is Public
Procurement.
•
A financial tool permitting to the Public Authority to defer the payment of a Public
building or Public infrastructure when fiscal resources are not available.
PPP is:
• A global contract for the Design, Financing, Construction or Rehabilitation and
Operation of Public Building or Public Infrastructure which is the basis of a public
service.
• The Private sector is not paid upon of the construction: but upon satisfactory delivery
of the service.
PPP DEFINITION
Two main families :
Payment by Public
Authority when service is
rendered only to it
Payment by end users
when full service is
delivered to them
(sometimes with an
element of subsidy)
(PFI/PPP availability
payment)
(Concession and
Affermage PPP)
More or less 2,000 projects
More or less €200 billion total invest.
More or less 25,000 projects
More or less € 1,000billion total invest.
Brazil is one of the few countries where the 2 families are clearly distinguished
in separate laws
WHICH PPP TO CHAMPION FOR EMERGING ECONOMIES AND
LDCs ? Most common answers
• PPP having the least liability on fiscal budget for paying the service to the
private investor. (Most States budgets have fiscal limits for pledging public
money beyond a certain threshold)
• PPP having the “best transformational” effect to reduce poverty and to
contribute to growth. (leading to increase of future tax income.)
• PPP for essential Infrastructure services (transport, utilities, urban services
etc…)
PPP where the private sector in charge of delivery of the full public service
and recovers mostly from end users
In a nutshell, priority for the family of Concession and Affermage PPP
The Center of Excellence Work program and organization
1. Focus
 On the 2 families of PPP with priority on Concession PPP family
2.
Preliminary step
 Identify core issues common to most projects around the world limiting or drying the
private sector appetite and impairing the smooth implementation of pipelines of
projects
 Status: IFEJI and CICA working group have organized or participated to series of
seminars and workshops around the world over the last few years
 Outcome: For Concession PPP 30 issues or challenges common to most projects
around the world have been identyfied so far
List of the main practical issues to address together for developing
pipelines of PPP for essential public services
1. PPP preparation: procedural steps preparation
Planning and
prioritization
2.
Prefeasibility
Comprehens
ive eco-fin.
scenario
Decision to
tender
PPP procurement: procedural steps
Preselection
Prequalification
3.
Socioeconomic
order of
magnitude
RFP
Outcome
oriented
Primary
evaluation
Global
evaluation
and possible
dialogue
Contract
award
PPP contract conditions
Construction
conditions
Source: CICA IFEJI
PPP WG (tested in
several workshop
with over 30
countries
represented)
Reference
business
case
Public service
scope and
operation
Adaptation of
service to the
needs
Partnering
ADR
List of the main practical issues to address together for developing
pipelines of PPP for essential public services
4. PPP legal principles governing public contract
Economic
equilibrium
5.
Sovereign
rights of the
Public
Authority
Uncommon
rights of
project
company
Outside
regulation
PPP procurement: procedural steps
Due process,
fair trial and
arbitration
6.
Public
service
priority
Expropriation
and security
of tenure
Granting of
permits and
authorizations
Tax and
custom
certainity
Evaluation and
selection
authority
Monitoring
authority
Stability of
regulations
PPP contract conditions
Governance
Integrity
Efficiency
Source: CICA IFEJI
PPP WG (tested in
several workshop
with over 30
countries
represented)
Planning and
prioritization
authority
Choice of
outside
advisers
How to address those issues in a coordinated manner in order
to satisfy both public and private sector ?
Lessons learnt and new 'excellence driven' approach:
• Design a state of the art work program taking care of all the key
issues and developed in a well structured order
• Have the program implemented by world class experts assigned
to a dedicated team offering the following guarantees:
 Free of special interest and;
 Ability to identify region by region, sector by sector, the
real issues and the relevant information which can be the
basis of lessons learnt
How to address those issues in a coordinated manner in order
to satisfy both public and private sector ?
I.
The work program: an innovative and progressive methodology
1.
Access and organization to raw materials
•
Identifying the materials
•
Searching or gathering the materials
•
Sorting and reviewing the materials
•
Analyzing the materials
•
Outline plan for concept notes or position memorandums
2.
Drafting of concept notes and memorandums
• For the purpose of packaging and disseminating the information
• For the purpose of training
• For the purpose of e-learning
3.
Drafting of documents for universal use
• Guidance notes and procedures
• Standard bidding documents
• Framework laws and regulations
• Template contracts
How to address those issues in a coordinated manner in order
to satisfy both public and private sector ?
1. Program implementation: setting up the high level Central team
The program may only be succesfull if it is implemented by a Central team meeting high level requirements
and working closely with local and regional specialists:
 Key requirements for the Central team
• Multidisciplinary experts having an in-depth experience of drafting regulations and implementing
projects in developed countries, emerging economies and LDCs
• All experts subject to strict neutrality and ethical rules (ref: G7 CONNEX initiative)
• Team able to develop close contacts with the development world including IFIs and public and private
sector representatives in regions and countries
• Team including legal and institutional experts coming both from the civil law and the common law
countries
 Status
• The core of the team for the ICoE has been selected and organized in a non-profit organization: ETICPPP
• More practitioners with necessary experience and ready to comply with ETIC-PPP code of conduct are
welcome
How to address those issues in a coordinated manner in order
to satisfy both public and private sector ? (2)
2. Program implementation: development of regional Hubs: proposal for Brazil
Regional hubs could play a decisive role for optimizing the program implementation. The Hubs would
work closely with the Central team for identifying regional or local issues through a well structured
program leading to a new level of exchanges between practitioners from all around the world.
This organization will permit to the central team to identify better relevant lessons learnt from various
regions and propose an initial level of synthesis which is an essential part of a succesfull work
program. Thereafter the Hub will continue to play an important role in exchanging, evaluating
proposals made by Central team in a coordinated manner.
The creation of a first regional Hub is well on the way in Western Africa under the auspices of
Association of regional Bar and governmental entities.
We hopeful that with the support of UNECE, CICA and IFEJI and based on the preliminary contacts
made a Latin American Hub will be created soon.
What to expect from the implementation of the work program ?
1. A progressive improvement of local regulations and practices deriving from initial exchanges
between the HUB and the Central team.
Those improvments may be limited to some topics or sectors but often decisive: examples:
project preparation, procurement, contract terms, corruption, etc.
2. A natural capacity building process for all stakeholders including public, private, financial
world, participating to those exchanges
3. Better evaluation of the roadmap to be followed by countries, regions, for improvment of
the legal and regulatory framework leading to pipelines of projects fo essential public
services
4. A major improvment of a comprehensive legislative, institutional, regulatory and
contractual framework necessary for pipelines of resilient projects in the essential public
infrastructure sector
We are convinced that the ICoE may play a decisive role for unlocking pipelines of projects for
essential public services in the region with improved governance
Thank You !
Marc Frilet
Frilet – Law firm/ GcilA
91, rue du Faubourg Saint Honoré
75008 Paris – France
Tel : + 33 1 56 26 00 40
e-mail : [email protected]
www.frilet.com
www.gcila.org