Setting up your Public-Private Partnerships for success
David Baxter
Independent Consultant | Senior Sustainability and Resilience (ESG) PPP Advisor to the International Sustainable Resilience Center | Steering Committee Member of the World Association of PPP Units & Professionals (WAPPP)
Understanding project risk is a central tenant of PPPs. Unfortunately, there are many examples of countries, where PPP project proponents, in their haste to seek solutions to economic challenges, are exploring fast- tracked procurement approaches that gloss over risk assessments. Unless comprehensive due diligence is carried out on the pros and cons of candidate projects, there is an almost certain risk of failure. Comprehensive project risk assessment strategies that identify, allocate, and develop accountable mitigation are essential to sustainable and resilient economic solutions. How can this be done?
The only practicable way to identify project risks is to initiate comprehensive project due diligence and feasibility studies before the project is procured. Upon completion of project feasibility studies, all identified risks should be documented in a risk matrix that is appended to procurement documents and disclosed to all bidders. Full disclosure provides bidders with the opportunity to respond accordingly to project risks during the tender phase, thereby allowing the procuring agent to determine whether the preferred bidder is up to the task.
To download the full paper, click on the link below -
https://go.ansarada.com/rs/285-LYY-900/images/Ansarada_Setting%20up%20PPPs%20for%20Success_Final.pdf
Sustainable Development & Financing / Private Sector Engagement & Partnerships / Certified Professional Coach & Mentor
1 年Thank you, David, for underlining the importance of due diligence and FS - in many cases unfortunately done quick and at low costs, which highly influence all the steps.
Creating Value in Shared Prosperity
1 年Thanks for reposting this Cosette.
Well done David. Proper, pre-procurement risk assessment and stakeholder engagement is the way forward for sustainable projects. The old saw, "penny wise and pound foolish" is ringing in my ears.
Assistant Chief of Valuations at Ministry of Lands and Human Settlements Development
1 年Thanks so much David Baxter for such an insightful discourse. It's indisputable fact that project risks are inevitable. Risks are the ghost in PPPz. The better ways of mitigating the risks in PPPz projects are; 1. Carefully identifying all possible risks that are very likely to occur in the project. 2. Appropriately allocating risks between the partners. Each party has to be given the risk(s) which is capable to bear. 3. Revisit now and then the risks allocation plan, and parties should be flexible to any agreed changes on reallocations. The process can start over and over again.