improvement on legal and procedural ppp system in mongolia
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Improvement on Legal and Procedural PPP System in MongoliaTRANSCRIPT
Improvement on Legal and Procedural Improvement on Legal and Procedural
PPP system in MongoliaPPP system in MongoliaPPP system in MongoliaPPP system in Mongolia
’’’’10-’’’’11 KSP with Mongolia
Kang-Soo Kim
(KDI)(KDI)
February 17, 2011
Table of ContentsTable of Contents
1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction 1. Introduction
2. Infrastructure in 2. Infrastructure in 2. Infrastructure in 2. Infrastructure in 2. Infrastructure in 2. Infrastructure in 2. Infrastructure in 2. Infrastructure in MongoliaMongoliaMongoliaMongoliaMongoliaMongoliaMongoliaMongolia
3. Public3. Public3. Public3. Public3. Public3. Public3. Public3. Public--------Private Partnerships System in MongoliaPrivate Partnerships System in MongoliaPrivate Partnerships System in MongoliaPrivate Partnerships System in MongoliaPrivate Partnerships System in MongoliaPrivate Partnerships System in MongoliaPrivate Partnerships System in MongoliaPrivate Partnerships System in Mongolia
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
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5. Policy Recommendations5. Policy Recommendations5. Policy Recommendations5. Policy Recommendations5. Policy Recommendations5. Policy Recommendations5. Policy Recommendations5. Policy Recommendations
�� Mongolian government has made effort to increase capital Mongolian government has made effort to increase capital
1. Introduction1. Introduction
�� Mongolian government has made effort to increase capital Mongolian government has made effort to increase capital
spending in power, transport and communication over the spending in power, transport and communication over the
recent yearsrecent years.
� However Mongolian fiscal resources have not been sufficient to provide the
requisite investment to supply adequate infrastructure.
�� Mongolian government is facing challenges of how to increase Mongolian government is facing challenges of how to increase
the investment of infrastructure. the investment of infrastructure.
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the investment of infrastructure. the investment of infrastructure.
� A new model to provide the investment that is needed to modernize Mongolia’s
infrastructure is required.
�� Mongolian government has identified that PublicMongolian government has identified that Public--Private Private
Partnerships (PPP) as the key instrument to attract much Partnerships (PPP) as the key instrument to attract much
needed private investment for the development of infrastructure.needed private investment for the development of infrastructure.
1. Introduction1. Introduction
needed private investment for the development of infrastructure.needed private investment for the development of infrastructure.
�� This chapter draws policy lessons and recommendations for This chapter draws policy lessons and recommendations for
Mongolia from Korea’s experiences on PPP infrastructure Mongolia from Korea’s experiences on PPP infrastructure
development.development.
� Key policy recommendations are organized into following points:
① Complement and strengthen legal and institutional framework
② Build transparent and competitive procurement process
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② Build transparent and competitive procurement process
③ Attract private participants through incentives and risk sharing mechanism
④ Establish adequate fiscal capacity
⑤ Build capacity of SPC and provide training for public sector officials
⑥ Need readjustment of pricing policy
⑦ Implement pilot PPP projects with support of international advice
Current infrastructure capacities do not allow Mongolia to provide Current infrastructure capacities do not allow Mongolia to provide
2. Infrastructure in Mongolia 2. Infrastructure in Mongolia
Current Status
�� Current infrastructure capacities do not allow Mongolia to provide Current infrastructure capacities do not allow Mongolia to provide
sufficient and quality basic public services.sufficient and quality basic public services.
� Only 67% of population has access to power (electricity) and 35% to water.
� Only 3.5% of road is paved and existing ones need capital repair.
� Railway network capacity does not match the growing export-import cargo flows.
� Air transport has constraints on tourism development, public perception of poor air safety, and underdeveloped domestic airport system.
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�� World Economic Forum (WEF) Global Competitiveness Report World Economic Forum (WEF) Global Competitiveness Report
20102010--2011 ranks 2011 ranks
� Mongolia 137 out of 139 countries ranked on the quality of overall infrastructure.
� Overall Infrastructure: 137
Roads: 138, Railroad: 69, Port: 112, Air Transport: 129, Electricity Supply: 111
�� The infrastructure status is expected to get worse when the The infrastructure status is expected to get worse when the
2. Infrastructure in Mongolia 2. Infrastructure in Mongolia
major mines start production of minerals. major mines start production of minerals.
� Jobs that are created in the mine areas with most of the employees coming
from other regions will lead to more burden on water, sanitation, electricity and
heating supply in the southern regions.
� More road and, in particular, railway construction are needed to transport
multimillion tons of the minerals for internal use and exports to Russia and
China.
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China.
2. Infrastructure in Mongolia 2. Infrastructure in Mongolia
Investment in Infrastructure
�� Investments in infrastructure reached a record level in 2007 at Investments in infrastructure reached a record level in 2007 at
19% of total government expenditures (10% of GDP) from 13% 19% of total government expenditures (10% of GDP) from 13%
(4% of GDP) in 2001~2006.(4% of GDP) in 2001~2006.
� Over 1995-2005, loans, grants, private investment and the government’s investments in infrastructure have averaged US$128mn per year, including grants 20.3% and loans 68.7%, with government and private resources providing the rest.
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�� Total investments needed equal to an annual investment of Total investments needed equal to an annual investment of
about 15% of GDP over the coming years.about 15% of GDP over the coming years.
� Assuming that infrastructure investment needs are estimated at US$427mn per year, existing financing sources leave a gap of US$300mn per year.
Government Proposed Investment Program for Transport, 2008-2015
2. Infrastructure in Mongolia 2. Infrastructure in Mongolia
Project Length/UnitsTotal Cost
(million US dollars)Roads
Millennium road 600 120Millennium road 600 120Western Mongolia North-South Road 800 160Other north-south road 1100 220Completion of UB-PRC road 300 60Southern road to Altai 225 27Bridge maintenance 16Road maintenance 24Subtotal Roads 627
RailwaysNew parallel railway 1100 1100Other railway extensions 500 500Mining railways 300 300Rail maintenance 1100 55Subtotal Railways
AviationNew international airport 1 300Upgrading domestic airports 4 40
Source: Public-Private Infrastructure Advisory Facility. “Foundation for Sustainable Development: Rethinking the Delivery of Infrastructure Services in Mongolia.”World Bank. June 2007.
1 300Upgrading domestic airports 4 40Expansion of the navigation system 1 10Subtotal Aviation 350
UrbanRoads to aimags in UB 100 10Interchanges for outer by pass 5 2Traffic management in UB 1 1Subtotal UrbanTotal transport infrastructure investment 2,945
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2. Infrastructure in Mongolia 2. Infrastructure in Mongolia
Shortage in Financing Infrastructure and PPPs
�� The mismatch between available financial resources and proposed The mismatch between available financial resources and proposed
investments suggests that plans will have to be combined with investments suggests that plans will have to be combined with
� Effective use of budget spending (PFS)
� A greater role for private investments (PPP)
�� MMongolian government, realizing the role for private investment for ongolian government, realizing the role for private investment for
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�� MMongolian government, realizing the role for private investment for ongolian government, realizing the role for private investment for
infrastructure, has made effort to structure legal and regulatory infrastructure, has made effort to structure legal and regulatory
framework for PPP. framework for PPP.
3. PPP System in3. PPP System in Mongolia Mongolia
�� State Policy on PPP: approved by Parliament in October 2009State Policy on PPP: approved by Parliament in October 2009
Legal Framework
�� State Policy on PPP: approved by Parliament in October 2009State Policy on PPP: approved by Parliament in October 2009
�� Law on Concessions: January 28, 2010 Law on Concessions: January 28, 2010
� Related regulations and guidelines are still under document processing
� Build-Operate-Transfer (BOT)
� Build-Transfer (BT)
Concession Types
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� Build-Transfer (BT)
� Build-Own-Operate (BOO)
� Build-Own-Operate-Transfer (BOOT)
� Build-Lease-Transfer (BLT)
� Design-Build-Finance-Operate (DBFO)
� Renovate-Operate-Transfer (ROT)
3. PPP System in3. PPP System in Mongolia Mongolia
Concession Eligible Facility Types (according to the State Policy on PPP)
Social sector Infrastructure Environment
� Health
� Education
� Art
� Science
� Others
� Energy, rechargeable energy
� Heat transmission and distribution network
� Information and Communication
� Water supply, waste
� Ecology
� Waste management
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� Others � Water supply, waste water treatment
� Public transportation
� Roads
� Building
� Others
3. PPP System in3. PPP System in Mongolia Mongolia
Institutional Responsibility for PPP
Organizations ResponsibilityOrganizations Responsibility
Government
� approve and revise the list of state property concession items,
� decide on granting the concession and authorize the State Property Committee (SPC) to enter into an agreement of concession,
� report annually to the Economic Standing Committee of parliament on the implementation of the legislation on concession,
� other power stipulated in the legislation,
� adopt the regulations on the detailed procedures for tender, sample documents and criteria for the evaluation proposals.
� prepare and submit to the government a draft list of concession items for
state-owned property,
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Authorized entity: State Property Committee (SPC),
Governor of city,Governor of Provinces
(aimag)
state-owned property,
� research and prepare proposals for inclusion in the list of concession items,
� announce publicly the list of concession items (solicited project list),
� provide methodological and expert assistance to other to other related to
gaining and implementing concessions,
� establish and maintain the national centralized registry and database on
concessions,
3. PPP System in3. PPP System in Mongolia Mongolia
Organizations Responsibility
� adopt legally binding norms when specifically to do by legislation,
� devise the documents of the tender specified in Article 11 of Concession
(con’t.)
� devise the documents of the tender specified in Article 11 of Concession
Law jointly with the relevant state administrative institution, announce the
tender, organize and evaluate it,
� enter, with the concessionaire and other entities, into a concession
agreements as contracts of the concessionaire to obtain financing,
� other powers specified in the legislation,
� provide professional and methodological assistance to relevant local
authorities regarding concession,
� adopt regulations on the methodology to prepare the cost - benefit analysis
for a concession item.
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Line Ministries (LM), National Development and Innovation
Committee (NDIC)
� LM and NDIC jointly submit to the SPC a proposal for a concession item
prepared in accordance with Article 10.3 of Concession Law with the cost
and benefit analysis,
� give related opinion of their respective matter for the local property
concession items proposed by the governors of provinces and the capital
city.
3. PPP System in3. PPP System in Mongolia Mongolia
Organizations Responsibility
Regulatory Authority
� grant permission and licenses required for the implementation of a
concession,
� determine prices and tariffs,
� adopt and enforce rules and regulations pertaining to the concession item
or services rendering by it.
Ministry of Finance � give opinion for finalize the draft list of concession items to SPC.
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3. PPP System in3. PPP System in Mongolia Mongolia
Performance Procedure of PPP Project
1. Designation of Project
(concession item)
(can be prepared by both government organization and private sector )
2. List of Concession
Items
(drafted by SPC and approved by
government )
3. Selection of executive company
(organized by SPC)
4. Concession agreement
(drafted by SPC and approved by government)
5. Project Implementation
(preformed by selected executive
company )
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organization and private sector )
government )
3. PPP System in3. PPP System in Mongolia Mongolia
Project Initiation
�� Both the government and private company can initiate PPP Both the government and private company can initiate PPP
projectsprojects
(1) Solicited Projects(1) Solicited Projects
� A solicited project is included project into the List of Concession Items which is
approved by the Government.
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(2) Unsolicited Projects(2) Unsolicited Projects
� An unsolicited project is a proposed project by private sector.
3. PPP System in3. PPP System in Mongolia Mongolia
Procurement Steps of a Solicited Project (one stage)
Announcement of tenderSPC Announcement of tender
Submission of the proposal to participate in the tender
Evaluation and selection of the tender participants
Provision of the tender documents to the participants
Submission of project proposals
from private sector to SPC
SPC
SPC
from SPC to private sector
from private sector to SPC
Step 1. Selection of participants
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Evaluation and compilation of the list of qualified participants
Negotiation with the qualified participants of the terms of the agreement
Contract award
SPC
from SPC to private sector
Government
Step 2. Selection of the project
Step 3. Negotiation
3. PPP System in3. PPP System in Mongolia Mongolia
Procurement Steps of a Solicited Project (two stages)
Step 1. Selection of participants Same as one stage tender
Request to submit an initial proposal on the issues specified in Article 13.7 of the Law
Submission of project proposals
from SPC to private sector
from private sector to SPC
Step 1. Selection of participants Same as one stage tender
SPC
from SPC to private sector
Step 2.1. Selection of the project Finalize the tender documents
Provision of the tender documents to the participants
Provision of the tender documents to the participants
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Evaluation and compilation of the list of qualified participantsSPC Step 2.2. Selection of the project
Submission of Project Proposals from private sector to SPC
Same as one stage tender
Same as one stage tender
Step 3. Negotiation
3. PPP System in3. PPP System in Mongolia Mongolia
Procurement Steps of an Unsolicited Project
Submission of the proposal to conclude a Submission of the proposal to conclude a private sector to SPC
Submission of the proposal to conclude a concession agreement together with the cost-
benefit analysis
Submission of project proposals
private sector to SPC
Opinions for project proposal Line Ministry, NDIC, Ministry of Finance
Decision, whether to recommend to include the Decision, whether to recommend to include the proposals in the list of concession items SPC
Add to the list of concession items Government
Announcement of tender
private sector to SPC
SPC
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Submission of project proposals
Negotiation with the qualified participants of the Negotiation with the qualified participants of the terms of the agreement
Contract award
private sector to SPC
Evaluation and selection of the list of qualified Evaluation and selection of the list of qualified participants SPC
between SPC and private sector
Government
�� A significant progress for PPP A significant progress for PPP has been made with the
establishment of its legal framework.
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
establishment of its legal framework.
� The Law on Concessions has been prepared by the Government and ratified by
the Parliament on January 28, 2010 after the approval of Government’s Policy on
PPP in late 2009.
� PPP unit was established within the SPC by the Prime Minister’s order No.31
dated April 2010.
� Nevertheless, as the program is now only emerging and the first
2020
� Nevertheless, as the program is now only emerging and the first
PPP transactions are being prepared, refinements and
amendments that address any gap in the framework need to be
further developed.
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
Comparison
Korean PPP ActKorean PPP ActKorean PPP ActKorean PPP ActKorean PPP ActKorean PPP ActKorean PPP ActKorean PPP Act• PPP Act prevails over other related acts (Article 3(1)), giving the project authorization and permission necessary to obtain in other related Acts
• Matters such as authorization and
Mongolian Concession LawMongolian Concession LawMongolian Concession LawMongolian Concession LawMongolian Concession LawMongolian Concession LawMongolian Concession LawMongolian Concession Law• Relevant license is granted to the concessionaire “as soon as possible” upon the conclusion of the concession agreement (Article 29.2)
Certain priorities in relation to other laws
�� Priorities and Advantages Given to PPP ProjectsPriorities and Advantages Given to PPP Projects
• Matters such as authorization and permission are “considered to have been granted” (Articles 21(4), 22(3))
� Facilitate implementation of project
� Certain priorities in relation to other laws and granting of relevant permissions may need to be given to concession projects to facilitate and expedite the implementation
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Korean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPP Mongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian Concession�� Institutional Arrangements: Players of the System(1)Institutional Arrangements: Players of the System(1)
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
Korean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPP• Ministry of Strategy and Finance(MOSF)
� Manage PPP Act, Enforcement Decree, and Basic Plan for PPP;
� Responsible for budgeting, preparing and implementing PPP investment plans
• PPP Review Committee(PRC)� Establish major PPP policies;� Establish and modify Basic Plan for PPP;
Mongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian Concession• Ministry of Finance
� Give opinion to finalize draft list of concession items to SPC
• Line Ministries and NDIC� Submit to SPC proposal for concession item
with the cost and benefit analysis;� Give related opinion of their respective matter
• Regulatory Authority� Designate and cancel large PPP project ;� Designate concessionaire of large PPP
projects (total project cost with KRW 200 billion or above)
• Regulatory Authority� Grant permission and licenses ;� Determine prices and tariffs;� Adopt and enforce rules and regulations
pertaining to the concession item or services rendering by it.
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Korean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPP Mongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian Concession�� Institutional Arrangements: Players of the System(2)Institutional Arrangements: Players of the System(2)
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
Korean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPP• Public and Private Infrastructure Investment
Management Center(PIMAC)� Support formulation of the Basic Plan; � Assess feasibility and value for money, formulate
request for proposals, evaluate project proposals, negotiate with potential concessionaires, etc.;
� Promote foreign investment in PPPs;� Develop and operate capacity-building programs
for public sector practitioners;
Mongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian Concession• State Property Committee(SPC)
� Prepare and submit to the government draft list of concession items;
� Research and prepare proposals � Announce publicly the list of concession items;� Devise documents of the tender, and announce the
tender, organize and evaluate it;� Enter into concession agreements as contracts of
the concessionaire to obtain financing;for public sector practitioners;� Conduct policy research� Develop implementation guidelines for efficient and
consistent implementation of PPP projects.
� Provide professional and methodological assistance to relevant local authorities regarding concession;
� Adopt regulations on the methodology to prepare the cost - benefit analysis for a concession item.
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4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
Weaknesses
� Fiscal Discipline:
Need for a central government ministry responsible for managing the Concession
Law with power to regulate fiscal expenditure.
� the Ministry of Finance only seems to play minimal role in the procedure.
� Decision-Making Institution
�� Institutional ArrangementsInstitutional Arrangements
� Decision-Making Institution
Need for an entity that deliberates matters concerning the establishment of major
concession project-related policies and key decisions in the process of implementing
large scale concession projects.
� In Korea the PPP Review Committee (PRC) mandated with such functionality is organized
and managed by the MOSF
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�� Procurement Process for Unsolicited ProjectsProcurement Process for Unsolicited Projects
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
� The procurement process for unsolicited projects should be designed to secure or
Korean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPP• BTL projects shall not be implemented as an unsolicited project (Article 9, Korean PPP Act)
Mongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian Concession• Mongolian and foreign legal entities may submit an unsolicited project proposal to conclude a concession agreement (Article 18, Mongolian Concession Law)
� The procurement process for unsolicited projects should be designed to secure or enhance value for money
� BTL projects can operate irrespective of user fee, and project risk involved for BTL method is relatively low.
� If the private sector has an option to pursue BTL projects as unsolicited from the government, it could be over-motivated, resulting in reckless proposals of projects.
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TypesTypesTypesTypes Financial SupportFinancial SupportFinancial SupportFinancial Support
�� Measures for Financial Support and Risk SharingMeasures for Financial Support and Risk Sharing
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
�� Korean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPKorean PPPTypesTypesTypesTypes Financial SupportFinancial SupportFinancial SupportFinancial Support
Subsidy (1) Construction Subsidy (2) Compensation for Base CostGuarantee System Infrastructure Credit GuaranteeTax Incentives Special Taxation, Corporate Tax, Local Tax, Exception from ChargesEarly Termination Guidelines for Early Termination
� Mongolian ConcessionMongolian ConcessionMongolian ConcessionMongolian ConcessionArticle 30. Financial support from the stateArticle 30. Financial support from the stateArticle 30. Financial support from the stateArticle 30. Financial support from the state
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Issue a loan guaranteeProvide a portion of the financing for the concessionProvide tax exemptions and waivers in accordance with the relevant lawsProvide insuranceIssue a guarantee for the minimum amount of the concessionaire’s revenues under the concession agreement.
�� Fiscal Risk Management by Setting Limits to Gov’t PaymentFiscal Risk Management by Setting Limits to Gov’t Payment
4. Assessment of Mongolian PPPs4. Assessment of Mongolian PPPs
� Concession types that involve government payment may be exposed to government
fiscal risk. Legal mechanism that sets limit to such payment needs to be explicitly
indicated, as to identify, control, and mitigate unexpected fiscal risk that may involve
in the process of payment during the concession period.
� Korea sets a safeguard ceiling on government payment where annul government payment is
less than 2 % of total government budget expenditure.
� Korean government has to submit the aggregate ceiling to the National Assembly, thereby
limiting the amount of BTL project to be conducted in the following year.
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5. Policy Recommendations5. Policy Recommendations
�� Complement and Strengthen Legal and Institutional FrameworkComplement and Strengthen Legal and Institutional Framework
� The newly ratified Law on Concessions will no doubt be facing challenges of
legal loopholes that allow circumvention or avoidance of some of the most
critical regulatory stages.
�� Specific guidance for tendering, contracting, risk sharing and conflict resolution must Specific guidance for tendering, contracting, risk sharing and conflict resolution must
be adopted.be adopted.
�� Interplay among the budget ministry, the line ministries and PPP unit within SPC for Interplay among the budget ministry, the line ministries and PPP unit within SPC for
�� Complement and Strengthen Legal and Institutional FrameworkComplement and Strengthen Legal and Institutional Framework
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�� Interplay among the budget ministry, the line ministries and PPP unit within SPC for Interplay among the budget ministry, the line ministries and PPP unit within SPC for
regulating fiscal expenditure needed to be defined more specifically.regulating fiscal expenditure needed to be defined more specifically.
5. Policy Recommendations5. Policy Recommendations
�� Build Transparent and Competitive Procurement ProcessBuild Transparent and Competitive Procurement Process
� There is a need for standard documents for bidding that clearly and
comprehensively address reimbursement issue of proposal preparation cost of
unsuccessful proponents.
� Simplified required documents for proposal would act as guidance to the possible
concessionaires.
� Clear access to information on the content of the project proposal, standard
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� Clear access to information on the content of the project proposal, standard
concession agreement, government support and guarantees should be opened to
the public.
5. Policy Recommendations5. Policy Recommendations
�� Attract Private Participants through Incentives and Risk Sharing Attract Private Participants through Incentives and Risk Sharing
MechanismMechanism
�� Government supportGovernment support to induce private sector’s active participationto induce private sector’s active participation
�� Construction Subsidy, Infrastructure Credit Guarantee via Infrastructure Credit Guarantee Fund, Construction Subsidy, Infrastructure Credit Guarantee via Infrastructure Credit Guarantee Fund,
Tax Incentives, Early Termination PaymentTax Incentives, Early Termination Payment
�� Establish Adequate Fiscal CapacityEstablish Adequate Fiscal Capacity
�� Government needs financial capacity and policy analysis not to bypass Government needs financial capacity and policy analysis not to bypass
expenditure controlsexpenditure controls
Report publicly on the guarantees that are given and the maximum liability of the government, Report publicly on the guarantees that are given and the maximum liability of the government,
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�� Report publicly on the guarantees that are given and the maximum liability of the government, Report publicly on the guarantees that are given and the maximum liability of the government,
and guarantees should be disclosed and incorporated into mediumand guarantees should be disclosed and incorporated into medium--termterm
�� Fiscal managementFiscal management
�� Aggregate fiscal commitment should be limited to a sustainable level for maintaining fiscal Aggregate fiscal commitment should be limited to a sustainable level for maintaining fiscal
soundness and stability soundness and stability
5. Policy Recommendations5. Policy Recommendations
�� Build Capacity of SPC and Provide Training for Public Sector Build Capacity of SPC and Provide Training for Public Sector
�� As advisory and project facilitating entity, staffs of State Property Committee require As advisory and project facilitating entity, staffs of State Property Committee require
knowledge and expertise in the relevant field. knowledge and expertise in the relevant field.
�� Through active cooperation with foreign advanced PPP units, it may build inward capacity to be, Through active cooperation with foreign advanced PPP units, it may build inward capacity to be,
in the future, disseminated to other ministries and local government officials in charge of in the future, disseminated to other ministries and local government officials in charge of
concession projects through training and education sessions. concession projects through training and education sessions.
MOU between Korean MOSF and KDI will act as vehicle to promote knowledge MOU between Korean MOSF and KDI will act as vehicle to promote knowledge
�� Build Capacity of SPC and Provide Training for Public Sector Build Capacity of SPC and Provide Training for Public Sector
OfficialsOfficials
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�� MOU between Korean MOSF and KDI will act as vehicle to promote knowledge MOU between Korean MOSF and KDI will act as vehicle to promote knowledge
transfer between SPC and Korea on PPPs through cooperation and exchange of transfer between SPC and Korea on PPPs through cooperation and exchange of
information.information.
5. Policy Recommendations5. Policy Recommendations
�� Need ReNeed Readjustment of Pricing Policyadjustment of Pricing Policy
�� Ensure level playing field for private providers based on costEnsure level playing field for private providers based on cost--based tariffs based tariffs
�� Due to lack of capacity of relevant institution and of proper guidelines, absence Due to lack of capacity of relevant institution and of proper guidelines, absence
of experience and shortage of knowledge on PPP implementation, and as an of experience and shortage of knowledge on PPP implementation, and as an
�� Implement Pilot PPP Projects with Support of International Implement Pilot PPP Projects with Support of International
AdviceAdvice
�� Ensure level playing field for private providers based on costEnsure level playing field for private providers based on cost--based tariffs based tariffs
�� Set independently regulated cost recovery or market based tariffs followed by a gradual Set independently regulated cost recovery or market based tariffs followed by a gradual
introduction of transport pricing reformintroduction of transport pricing reform
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of experience and shortage of knowledge on PPP implementation, and as an of experience and shortage of knowledge on PPP implementation, and as an
attempt at minimizing trials and errors, attempt at minimizing trials and errors,
�� Pilot PPP projects with support of international transaction advice are recommended.Pilot PPP projects with support of international transaction advice are recommended.
Thank you...Thank you...Thank you...Thank you...Thank you...Thank you...Thank you...Thank you...
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