Public Private Partnerships

A PPP is an arrangement for the procurement of a public service, typically characterized by the following features:

• a long-term contract between a public contracting authority and a private sector company based on procurement of services, not assets, and taking account of the whole life cycle implications for the project;
• the transfer of a substantial part of project risks to the private sector, notably with respect to designing, building,operating and/or financing the project;
• a focus on the specification of project outputs rather than project inputs;
• the use of private financing to substantiate the risk transfer to the private sector; and
• performance-related payments to the private sector in function of the services delivered.

• Policy Objectives

  The main objectives of this national PPP policy are to:

  1. Encourage and promote private sector participation in the delivery of public infrastructure and service;
  2. Protect the interest of all stakeholders and the environment;
  3. Leverage public resources with private sector resources to accelerate investments in Infrastructure and service provision;
  4. Facilitate and encourage PPP investments by creating an enabling environment;
  5. Ensure the attainment of national and international social and environmental safeguards;
  6. Improve the number, quality, cost-effectiveness & timely provision of public infrastructure & services;
  7. Set up efficient and transparent institutional arrangements for the identification, structuring and competitive tendering of PPP projects; and
  8. Provide a framework for developing efficient risk sharing mechanisms.
• Definition of PPP

  A public?private partnership is defined as:

  A public-private partnership (PPP) is an agreement between a government and a private firm under which the firm delivers an asset, a service, or both in return for payments contingent to some extent on the long-term quality or other characteristics of outputs delivered.

  Agreements may include service contract, management contracts, leasing, Concession, Build Operate Transfer (BOT), Build Operate Own (BOO), Design, Build, Operate (DBO), Design Build, Operate, Finance, privatization and cover widely varying activities, not just those in infrastructure sectors.

• Benefits of PPP

  When implemented well, PPP benefits include:

  • Improved quality and quantity of basic infrastructure such as the provision of water and its treatment, energy supply and transportation;
  • improved Planning and Project: construction is usually completed to plan and to budget;
  • repairs and maintenance are planned at the outset and in consequence assets and services are maintained at a pre-determined standard over the full length of the concession;
  • PPPs help the public sector develop a more disciplined and commercial approach to infrastructure development whilst allowing them to retain strategic control of the overall project and service;
  • The risk of performance is transferred to the private sector. The private sector only realizes its investment if the asset performs according to the contractual obligations. As the private sector will not receive payment until the facility is available for use, the PPP structure encourages efficient completion, on budget without defects;
  • better quality in design and construction than under traditional procurement. PPP focuses on the whole life cost of the project not simply on its initial construction cost. It identifies the long term cost and assesses the sustainability of the project;
  • The use of private finance enables the public to have access to improve services now, not years away when governments spending programme permits;
  • The expertise and experience of the private sector encourages innovation, resulting in shorter delivery times and improvements in the construction and facility management processes. Developing these processes leads to best practice and adds value;
  • The process helps to reduce government debt and to free up public capital to spend on other government services;
  • The tax payer benefits by avoiding paying higher taxes to finance infrastructure investment development;
  • PPP projects can deliver better value for money compared with that of an equivalent asset procured conventionally;
  • The PPP process requires a full analysis of projects risks at the outset. This fuller examination of risks by both the government and lenders means that cost estimates are robust and investment decisions are based on better information; and
  • PPPs create efficient and productive working relationships between the public and private sector.
• PPP Guidelines

  All PPP arrangements in the Gambia shall be guided by the following principles:

  1. PPP projects offer “value for money”;
  2. PPP projects serve a public interest;
  3. The risks are properly allocated between the public and private sector;
  4. The projects are procured on the basis of clearly specified output requirements;
  5. The users contribute to project costs according to their ability/willingness to pay;
  6. Projects are procured in a competitive process;
  7. Environmental and social standards are respected; and
  8. Accountability and transparency (including stakeholder consultation) are built into the project development and implementation process.
• Scope and Application of PPP Projects

  This National PPP Policy applies to all sectors and levels of government. Any project can be pursued as a PPP provided the following conditions are satisfied:

  1. The project is defined as a priority project (i.e. it is included in the National Development Plan);
  2. it is affordable to the government and consumers;
  3. it offers “value for money”;
  4. it involves an appropriate transfer of risks to the private sector.Sector specific policies may be developed to accommodate the needs of specific sectors consistent with the overall government PPP policy.

Locations of Public Private Partnerships Priority Projects