Published on March 6, 2014
UTAP Unidade Técnica de Acompanhamento de Projetos Developing PPP frameworks: the Portuguese experience 7th Annual Meeting of Senior PPP Officials OECD – Paris, February 18, 2014
PPP portfolio in Portugal UTAP Central Government PPP: 35 contracts: 22 motorways, 10 health sector, 2 railway sector, 1 security and civil protection Cumulative investment up to 2012 = 15.220 million € PPP portfolio composition Cumulative investment share per sector 3% 1% 2 1 10% 10 Rodoviárias Motorways 23 Rodoviárias Motorways Health Saúde sector Health Saúde sector Railways Ferroviárias Railways Ferroviárias Security Segurança 86% Security Segurança Source: Ministry of Finance Developing PPP frameworks: the Portuguese experience – Fernando Crespo Diu 2
PPP sector up to 2011 UTAP Number of PPP contracts signed per year: motorways (M), health care services (Hs), health care infrastructure (Hi), railways (R) and security (S) Hi Hs Hi Hi Hs R M M Hs M M M R M M M M M M S M M M M Hs M Hi Hs M M M M Hs M Hs M M M M M 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Developing PPP frameworks: the Portuguese experience – Fernando Crespo Diu 3
PPP long term payments UTAP Strong fiscal sustainability concerns 2012 State Budget projections – “do nothing” scenario 2015 public payments ≈ 2.100 million € ≈ 1,5% of GDP Motorways Security Railways Million Euros Health sector Source: 2012 State Budget, Ministry of Finance Developing PPP frameworks: the Portuguese experience – Fernando Crespo Diu 4
Motorway PPP development UTAP Motorway network: developed 100% under PPP model 3.112 3500 *********************** 2.610 2.215 2500 0 1985 1990 1995 * 2000 = PPP Contracts ************** **************** ** * 500 353 1000 ************ 764 1500 *** ***** ******** ********** *********** 1.311 2000 216 Motorways Kms in Operation 3000 2005 2010 16 23 Source: Institute for Mobility and Transports, Ministry of Economy Developing PPP frameworks: the Portuguese experience – Fernando Crespo Diu 5
PPP framework comparison UTAP Motorways Health care Earliest effort as a “PPP program” (1999) – batch of shadow toll contracts Earliest PPP (1995), plagued with difficulties Relied on competitive process plus negotiation of shortlisted bidders No Public Sector Comparator (PSC) developed Value for Money analysis (VfM) neglected Evolution towards a strong sectorial framework Larger contracts are substitution hospitals Efforts towards developing appropriate PSC methodologies Complex contractual structures, but allow annual outputs (and payments) negotiation VfM perceived as positive Developing PPP frameworks: the Portuguese experience – Fernando Crespo Diu 6
Public sector capacity issues UTAP Traditional underinvestment in public sector’s own resources Public teams underdimensioned and/or poorly prepared Excessive resource to external advisers Low capacity to accumulate experience, assess lessons learned and implement solutions Asymmetry of information, resources and technical capacity between public and private actors Key methodologies neglected: planning process, CBA, PSC, VfM, fiscal affordability, long term budgeting Quality of some projects low, often poor risk allocation Developing PPP frameworks: the Portuguese experience – Fernando Crespo Diu 7
A sound PPP framework includes… UTAP Solid institutional and legal framework Adequate infrastructure planning and selection of sound projects to be procured Capable and well dimensioned public teams, both in the line Ministries and the Ministry of Finance (MoF) Creation of a centralized PPP unit advisable – MoF Resource to specialized external advisers as necessary – avoid substituting tasks of public teams Development of PSC and VfM methodologies – pays off in the long run Developing PPP frameworks: the Portuguese experience – Fernando Crespo Diu 8
UTAP UTAP Unidade Técnica de Acompanhamento de Projetos Ministério das Finanças Rua Braamcamp, 90 – 6º piso 1250-052 Lisboa Web: www.utap.pt Fernando Crespo Diu - Coordenador E-mail: firstname.lastname@example.org Telef: +351 211 119 711 +351 914 448 443 Estruturação de Projetos de PPP 9
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