Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist. Such assistance, I am convinced, must not be on a piecemeal basis as various crises develop. Any assistance that this Government may render in the future should provide a cure rather than a mere palliative – George C Marshall
This week President Zelensky in a passionate speech to the World Economic Forum called for economic aid for Ukraine’s recovery.??He invoked the words of George C. Marshall??- above - where he stressed that economic aid must not be on a piecemeal basis.??This condition is spot on.??President. Zelensky also mentioned the United24 online platform where donors can donate money that will be used to rebuild the Ukraine, as well as other programs that will soon follow.
Public-Private Partnerships (PPPs)??- I believe - will be a valuable tool to bridge the massive funding gap that currently exists for public infrastructure works needed to repair the war damage in the Ukraine.??If this objective is to be achieve efficiently, it is important that PPPs are understood.??PPPs are not philanthropy and should not be confused as simple short-term partnerships between the public and private sector.??They are more than that. They are long-term contractual agreements which mobilize the financial resources and innovation of the private sector to deliver projects that the public sector cannot deliver on its own.
Although United24 calls for donor aid, PPP projects will require more than donations if they are to be sustainable and resilient. They will also require long-term commitments and not once off gestures of largess.??To ensure a cohesive approach, the national Ukrainian PPP Unit should be the leader of a coordinated effort that prioritizes potential PPP project priorities and needs and which coordinates the efforts of national ministries and local governments.
Successful PPP implementation will be enhanced if the following best practices are considered:
- Structured PPPs?agreements that are more than partnerships between the public and. Private sector are needed.??These efforts should not be confused with corporate social responsibilities (CSR) philanthropy efforts which are short-term in nature and are not contractually binding.
- PPP Projects need to be bankable.?This means that they need to be commercially and economically feasible and investment worthy.
- Risks need to be identified and mitigated.?The identification of risk (i.e. political, construction, corruption, financial, perceptual, environmental, etc.) will need to be addressed and responsibilities allocated to the appropriate parties. If risk assessments are cursory in nature, projects will almost certainly face unnecessary challenges that could damage the reputation of future PPP endeavors in the Ukraine.
- Investor sentiments and perceptions need to be addressed.?Investors are not sentimental.??If they feel that proposed projects are too risky they will invest elsewhere.??Investor concerns and perceptions will need to be addressed collaboratively through a consultative process between public sector proponents and private sector partners.
- The Enabling Environment needs to be strengthened.?It is important that the current Ukrainian PPP legal framework be strengthened and reformed if necessary so that PPPs can be procured efficiently and in a streamlined manner. It is important to note that fast tracking should not become synonymous with practices that provide short cuts to transparent and competitive procurement best practices.
- Unsolicited Proposals (USPs) should be considered in only expectational circumstances. Pressure will be applied by private sector institutions to help with the reconstruction that might not have the full interests of the state and people of the Ukraine at heart.??USPs can be innovative, however institutions such as the World Bank caution against them as it is hard to prove that proposed projects are truly innovative, better than what other companies can offer or are in the interest of the nation.
- It is more than value for money (VfM). Currently PPPs projects undergo VfM assessments.??However, this has proven to be inadequate in determining how bankable projects are.??International organizations are now calling for wider assessments to be done that include value for people (VfP) and value for the future (VfF) assessments. These two additional assessments increase the potential for project success by requiring that projects are people friendly and also future proof, thereby resulting in sustainable and resilient projects that address the needs of impacted stakeholders.
- PPPs are more than procurement tools.??PPPs need to be seen more than procurement tools but also as a mechanism that is focused on creating and delivering projects that are contributors to national development and the achievement of country SDGs.??This is critically important for the Ukraine which will need quality PPP projects that contribute to the overall cohesive SDGs of a post war Ukraine.
- People-first PPPs (PfPPPs) should be the ultimate goal. There is an increasing sense that PPPs can be done better.??UNECE’s PfPPP paradigm should be corner stone of future PPPs.??In addition, UNECE’s zero corruption tolerance policy needs to be a fundamental best practice.??Without competitive and transparent procurements, resources will be squandered and the value of PPPs for economic recovery will be weakened.?
- All PPPs need to have distinct declared outcomes and deliverables. Without clearly defined outcomes, PPPs can rapidly descend into a nightmare of non-delivery and never-ending attempts to renegotiate their terms and conditions. Desired outcomes and deliverables need to be clearly drafted before any procurement is initiated??In addition, accountability needs to be addressed without any loopholes being allowed.
- ESG considerations for investment are becoming increasingly important. Responsible investors are increasingly adhering to ESG requirements.??ESG considerations will ensure that governance of PPP projects will be given specific attention through requirements of accountability.??ESG accountability will be strengthened by improved monitoring of projects that can resulting in ongoing evaluations of project’s sustainability and resilience.
- National PPP pipeline and coordination of efforts. It is important that the Ukraine develop a PPP project pipeline of vetted projects that meet stated national recovery requirements.??This will require coordination between different ministries and local governments through adherence to national development priorities.??Additionally, a national PPP pipeline will give investors a heads-up of opportunities and allow them to respond to procurement announcements and mobilize their resources. This will also ensure that procurements are more competitive.
- Institutional capacity building. The effort to mobilize PPPs for Ukraine’s national recovery will require the mobilization of PPP practitioners and procurement specialists.??Ukraine needs to ensure that its institutional capacity is strengthened through training and hiring of PPPs experts (where necessary).??This will ensure the procurements that are launched are of a standard that prevents nefarious players from getting the upper hand.
- Transnational PPPs. There will be a need for transnational PPPs in the Ukraine, especially as the Ukraine decouples its infrastructure from the East and focuses on the West. This will require international collaboration with its neighbo’s priorities and harmonization of different PPP enabling environments.??It would be advisable that EU policies be followed, especially if the Ukraine seeks EU membership and is admitted to the EU.
This list is not exhaustive, but is a good start. Successful PPPs beget opportunities for more PPPs.??Ukraine stands at the crossroads of PPP implementation that could make it a model for PPP implementation in Europe.??PfPPPs will ensure greater sustainable and resilient PPPs that leverage the resources of both public and private sector partners in the enhanced interest of the primary stakeholders – the people of the Ukraine.
