public-private partnerships in portugal: practical case studies rui s. monteiro (parpública sa) why...
TRANSCRIPT
![Page 1: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/1.jpg)
Public-Private Partnerships in Portugal: practical case studies
Rui S. Monteiro (Parpública SA)
• Why procuring PPPs? Can you get what you want?• Minimum requirements for PPP procurement• The “Fertagus” and the “Metro Sul do Tejo” cases• PPPs and institutional change
![Page 2: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/2.jpg)
Why procuring PPPs?
• Effectiveness (performance-based contracts)
• Efficiency (whole-life-costing approach)
• Rapid delivery of infrastructure
• Quality of service
![Page 3: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/3.jpg)
Can you get what you want?
• It will depend on good contract design
• And also on good tender design and
procurement
• But, more critically, on good contract
management
PPPs are an effective tool for infrastructure
delivery ─ but they may be also an engine for
budgetary efficiency and accountabilityor for
budgetary mismanagement
![Page 4: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/4.jpg)
Minimum requirementsfor PPP procurement
• Political willingness to procure PPPs
• A PPP-focussed procurement unit, able to
steer and control government know-how and
external consultants
• A scheme for the assessment of budgetary
risks
• Public authorities aware of the need to hire and
train people in order to manage PPP contracts
efficiently
![Page 5: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/5.jpg)
Fertagus (1)
Cross-Tagus suburban train service
![Page 6: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/6.jpg)
Fertagus (2)
€40m investment
18 double-decker
trains
1210-passenger
each
Central government sponsored the contract
![Page 7: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/7.jpg)
Fertagus (3)
Contract provided for no payments by
government
Effectiveness and quality:
Two years after starting operations,• the service was the best in the country• users were very satisfied• it helped decongesting the bridges (and the
city)
But demand level was 1/3 of the one expected
![Page 8: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/8.jpg)
Fertagus (4)
Contract renegotiated in 2004:
• most guarantees scrapped (incl. traffic
guarantee)
• higher-than-expected revenue-sharing
introduced
• rail service was extended (using the same
trains)
• trains removed from contract (sale-and-lease-
back)
• term reduced (from 30+15, to 7 yrs with 9 additional yrs dependent on financial equilibrium without subsidy)
• government subsidises low-demand circulations
![Page 9: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/9.jpg)
Fertagus (5)
Currently,
• reliable service, 143 circulations/day, 6
trains/hour
• 80 000 passengers/day use Fertagus trains
• (note: 156 000 vehicles/day cross the bridge)
• very high user appraisals, demand increasing
• government is paying subsidy but the benefits from the revenue-sharing mechanism are increasing
![Page 10: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/10.jpg)
Fertagus (6)
Lessons:
• private provider can be reliable and efficient
• public authorities need to avoid “optimism
bias”
• a revenue-sharing contract could be better than a full transfer of demand-risk to the private partner
• you may procure medium-term concessions using leasing contracts for rolling stock
![Page 11: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/11.jpg)
Metro Sul do Tejo (1)
• tram system for municipalities on Tagus’ left bank
• 19 km, €320m greenfield investment (€75m EU
grant)
• project sponsored by the central government, with initial high level of support by local councils
![Page 12: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/12.jpg)
Metro Sul do Tejo (2)
• the 30-yr contract was signed by the central government in 2002 without licensing granted; the environmental authority blocked the project for a few months; then one local authority blocked works in a few critical stretches, requiring some large underground parking facilities as “compensation” for use of land
• project completion was delayed until central government accepted paying for €72m parking facilities
• the system is now operating but still not completed, so demand is low (public partner will pay compensation)
![Page 13: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/13.jpg)
Metro Sul do Tejo (3)
Lessons:
• prior licensing (urban and environmental) is critical
• local authority support must be granted from the inception
• local community disturbances should be evaluated from the inception, including compensation costs in the expected cost of the project
• contract managers need to prevent/face problems, avoiding deadlocks that delay project completion
![Page 14: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/14.jpg)
PPPs and institutional change
• Political willingness and careful steering of
procurement units and external consultants can
deliver draft contracts and tender procedures
• But, in order to get efficiency, public authorities
need to design new institutions for:
project assessment: budgetary risks +
sustainability
contract management
![Page 15: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/15.jpg)
Procurement of efficient PPPs
• PPPs lock governments and private partners in
long-term relationships; so, governments need to
avoid being “trapped” in the wrong kind of
contract
• They need to balance PPP promotion (by
procurement departments) and screening for
budgetary risks (by efficiency-focussed
departments)
• And they need to design PPP contracts able to
face inevitable changes: technological,
demographic, political,...
![Page 16: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/16.jpg)
PPP contract management
The long-term characteristics of PPP contracts
require a different kind of contract management:
• more focussed on the prevention and mitigation
of budgetary risks (instead of managing project
risks);
• able to develop cooperation between partners;
• but also able to prevent or counterbalance
harmful strategic behaviour by private partners
![Page 17: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/17.jpg)
A new view on infrastructure
• PPPs are not just one way of procuring
infrastructure;
• PPPs create a new focus on outputs, outcomes,
and performance, inducing institutional reforms for
the benefit of users and taxpayers;
• And PPPs require also some institutional reforms
in order to select adequate projects, design
efficient PPP schemes, and manage contracts
efficiently
![Page 18: Public-Private Partnerships in Portugal: practical case studies Rui S. Monteiro (Parpública SA) Why procuring PPPs? Can you get what you want? Minimum](https://reader036.vdocuments.net/reader036/viewer/2022081602/551535e055034673228b59c6/html5/thumbnails/18.jpg)
Thank you for your attention.
Questions?
Rui Sousa Monteiro
Parpública SARua Laura Alves, 4, 8º, 1050-138 Lisboa, Portugaltel: (351) 217 950 507, (351) 969 845 042fax: (351) 217 817 170e-mail: [email protected]