Continuing post-implementation review
The subtlety and complexity of a public/private partnership demands a continuing post-implementation review. The post implementation review is in addition to the normal quality assurance oversight that a government requires as part of its procurement process. The reviews are a valuable tool in refining the process used by the government to develop the public/private partnership.
It is prudent to start the initial review a year after the physical completion of project construction or service implementation. The post-implementation review should focus on the following points:
- Project formulation and objectives
- Approval process and conformance to the project implementation schedule
- Risk exposure and risk sharing
- Budget performance
- Project management and procedures
- Functionality of infrastructure
- Project operations and financing
- Economy and industry development opportunities
There are four issues that should be addressed in the policy area. First is the question of a financially free-standing project. Obviously, one important government objective in using a public/private partnership is to obtain another source of funding for infrastructure projects. It is also within the capability of the private sector to upgrade infrastructure to meet current requirements.
Normally the private sector would assume operational control of the infrastructure as part of the partnership. There may be situations, however, where genuine community needs may not be met without some level of public sector contribution. In such cases the government may elect to consider making a limited contribution to maximize the public benefit. Any public commitment, guarantee or undertaking must be fully transparent and able to withstand public scrutiny.
The second issue is the size of the project. The guidelines discussed above generally apply to larger projects. Government agencies may wish to use them to construct a streamlined procedure for smaller size projects. Projects with a total investment under $5 million would be considered small projects for this purpose.
Third is the question of risk sharing. The key point is to capture the strengths of both partners and use them to offset any weaknesses. It is appropriate for the government to consider sharing risk on a basis of who is best able to assume the risk. It should not necessarily be assumed that the government should assume a "continuing risk" by underwriting the project. To the contrary, the government must exercise due diligence to identify all risks associated with the partnership, and develop and implement appropriate risk management plans to minimize unforeseen risk.
The fourth area is that of intellectual property and proprietary information. These issue are often important ingredients in proposals for a public/private partnership. For this reason it is quite important to identify intellectual property and proprietary information aspects in the preliminary proposal process. Management of these issues is an ongoing requirement and must be considered in the proposal process.
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