Politrickery and PPPs – A Recipe for Failure

Political Interference

The recent failure of the Purple Line PPP project in Maryland and the Collapse of the HART light rail project in Honolulu have one thing in common – the danger of undue political interference and intransigence in their selection and procurement. See Below.

Unfortunately, in many instances around the world, Public-Private Partnerships (PPPs) have been initiated for the narrow purpose of achieving party specific political agendas rather than reinforcing national development goals which are supported by all segments of society.  This cannot be allowed to continue.

Legitimate Projects

Unfortunately, it is not uncommon that prestige and political legacy projects that are launched ignore fundamental PPP best practices and selection principles that include projects as being merit worthy and viable.  Decision making should include value for money, value for people, and value for future considerations that reinforce project’s commercial, economic, and sustainability viability, rather than focus on short term political goals that only seek to curry the favor of narrow constituencies and win votes. Only these projects should be considered legitimate.

Virtuous Selection Criteria

The application of virtuous project selection criteria is becoming increasingly important in times of economic and environmental distress.  The Covid-19 pandemic has emphasized the need for bankable projects that investors would consider investment worthy because they embrace innovation, sustainability and resilience.  Because of the pressing needs to impartially leverage the cumulative resources of both the public and private sectors, wise and benevolent political leadership should proactively work to avoid guile and political prejudice when PPP procurement pipelines and projects are envisioned and structured.  This approach will lessen perceptions of political risk and contribute to project bankability.

Attractive Investment Through a Transparent Enabling Evnironment

It must not be forgotten that if the political establishment wishes to attract investment (including foreign investment) that transparency is increasingly becoming a prerequisite for developers and investors who want to limit political risk as all costs. Investors are not sentimental and a country’s poor political track record could preclude it from building an investment worthy national PPP initiative.

One might ask the question; how can we create a PPP procurement enabling environment that is not held hostage to political whims? Here are some suggestions – 

• Ensure an enabling environment (legal framework) that lays the foundations for enforceable and lawful PPP project implementation
• Create an independent procurement agency that has regulatory oversight over all government institution’s PPP selections and procurements at national and subnational level
• Improve procurement governance that ensures that incompetence, nepotism, corruption, and political maleficence cannot take hold in institutions that are launching PPP projects 
• Steadfastly embrace transparent and competitive procurements so that all bidders feel that they have an equal footing when responding to government tender requests
• Share all project information equally so that no bidders gain an undue advantage over other bidders through selective releases of information to “favored” cronies
• Adopt e-procurement platforms that document and archive all procurement submissions, actions, and decisions (see – Ansarada - https://www.ansarada.com/ ) so that every award decision can be defended publicly and probity implemented 
• Change the mindset of procurement officers so that they understand that they should not feel compelled to accept politically expedient arguments that projects selected should “appear to save money” (Purple line project)
• Institute procurement capacity building programs that ensure that bureaucrats are armed with the tools (guidelines) to countermand undue political interference
• Educate politicians on why it is of national importance that long-term PPP projects should extend beyond their political tenure
• Ensure robust “conflict of interest” protocols to ensure that connected parties declare any possible conflicts in their participation in project procurements
• Preclude considerations of Unsolicited Proposals that try and circumvent established procurement guidelines, especially in the case of specific projects already being considered for transparent and competitive procurements
• Root out private sector bad players through disbarments and other punitive actions

Tools to Circumvent Politrickery and Enhance Ethical Project Procurement 

Many practitioners have asked me what tools exist to circumvent politrickery in PPP projects? UNECE and members of WAPPP (WAPPP.org) have collaborated on the development of two tools that can advance a national PPP procurement initiative that is not held hostage to maleficent political interference. They are the following – 

The UNECE PPP COE (Geneva) SDGs Guidelines on Zero Tolerance to Corruption in PPP Procurementmakes the following practical recommendations - 

• “Creating a culture of Integrity and establishing principles of Transparency and Accountability are essential steps to generate a framework for Good Governance which subsequently contributes to building Trust between all stakeholders. 
• Ensuring that Ethical Codes of Conduct are in place as well as organizing related capacity building and training at all levels within public sector and administrations are the positive measures to generate the right appropriation process of what constitutes an ethical code of conduct. 
• Ensuring a transparent, independent, efficient and quick procedure of enforcement shall be organized as well as ensuring the enforceability of related decisions are further recommended. Legally binding on all parties. 
• Ethical Code of Conducts need to be in place within the Public Sector and the Private sector, over the course of a procurement process, must show evidence of its adherence to similar/ Best Practices Ethical Codes of Conduct.”

These guidelines provide valuable insights into what can be done to ensure that corruption and undue maleficent political interference can be avoided (follow the link to recommended guidelines -  https://www.unece.org/fileadmin/DAM/ceci/documents/2016/PPP/Forum_PPP-SDGs/Draft_UNECE_PPP_Standard_on_Zero_Tolerance_to_Corruption_in_PPP_Procurement.pdf

The UNECE PPP COE’s (Geneva) Guiding Principles on People-first Public-Private Partnerships in support of the United Nations Sustainable Development Goals is another valuable tool that should be consulted.  

According to UNECE - “People-first PPPs” can be perceived as a type of Public-Private Partnerships (PPPs) that can be designed to implement the Sustainable Development Goals and thereby to be “fit for purpose”. It is defined as an enhanced approach for PPPs that overcomes some of the weaknesses in the way the traditional PPP model has been implemented. 4 PPPs are contract delivery tools for public infrastructure provision involving initial private financing. They include two types: “government-pay PPPs” which are primarily funded by taxpayers and “concessions” which are primarily funded by the users of the infrastructure. 5 The People-first PPP model proposed is consistent with the Sustainable Development Goals so that PPPs would be made “fit for purpose” and oriented towards meeting the needs of “People-first”. The concept is critically important to focus PPPs on delivering desirable and necessary outcomes from infrastructure investment that focus PPPs on delivering “value for people”. See - https://www.unece.org/fileadmin/DAM/ceci/ppp/Standards/ECE_CECI_2019_05-en.pdf

Currently UNECE is also developing a tool that will help countries rank their PPP projects conformance with these guidelines, which will strengthen good governance in the selection of PPP projects and limit undue political interference in projects. 

UNECE has also produced sectoral guidance in PPP standards that can be adopted to ensure that PPPs are implemented in an ethical way. See - https://www.unece.org/ppp/standards.html

Conclusion

In defense of politicians, PPP programs cannot exist without their support and guidance.  It is therefore important that politicians who have a true interest in sustainable, resilient and viable PPPs have a political voice in decision-making as countries struggle to achieve their sustainable Development Goals (SDGS) in meaningful and respectful PPP partnerships. 

Let’s avoid Politrickery in PPPs and do them for the right reasons with the common interest of a nation at heart.