CICA participated in the 3rd International Conference PPP for Cities: “Reaching the Sustainable Development Goals in Latin American Cities thanks to Public Private Partnerships” in Barcelona on November 14th, 2017.
Main elements of assessment provided by the speakers:
- Each PPP project is unique and needs to be studied on a case by case approach. Lessons learned are to take into consideration cautiously. (Corporacion Andina de Fomento – CAF)
- The best system (PPP or other) is the one that achieves the best acceptance by the people (“social acceptance”). (SUEZ)
- Failures are often due to disconnection between PPPs and public policy objectives. (IMDEA Agua)
- To bridge the infrastructure financing gap we need blended finance to combine all the capital from Governments, MDBs and private sector (equity, mezzanine and debt). (Global Solutions)
- The social profitability might be higher in maintenance than greenfield. (IaDB)
- Smart cities are the best examples of PPPs when the public sector brings the clear vison and the private sector brings the innovation. (Agency for business competitiveness – ACCIO)
- The use of unsolicited proposals is very current in LATAM. (Business School University of Navarra – IESE)
- In most countries in LATAM there is a costs-benefits analysis. (IESE)
- Corruption has affected most of big contractors in some LATAM countries creating a worse social perception of PPPs, especially when there is a problem of concentration of firms and a lack of competition. (IESE)
- A proper technical assistance for the preparation of the projects is necessary. (EIB)
- Environmental impact assessments include also “people” but so far the social impacts are not well regulated. (EIB)
Main recommendations (and interrogations) provided by the speakers:
- To have “People First PPP”, a clear evaluation methodology is needed. Sustainable Development Goals need to appear in the output specifications. There is a need to incentivize to deliver. (UNECE)
- Risks should be monitored during the whole life of the projects. (EIB)
- The consultation should be also mobilized at the conception level when defining the objectives of the projects and not only during the implementation of the projects. (Infrastructure engineering and consultancy – INECO)
- Instead of managing assets we need to manage performance. (Tramway of Barcelona – TRAM)
- Find the right balance between private tariffs and subsidies. (EIB)
- Regulators should be independent. The fees should be related to performance. (IESE)
- It is of paramount importance to have the right skills within the Administration from early preparation to implementation. (INECO)
- In general the national authorities have good knowledge on the implementation of PPPs at the central level but not at the regional or local levels. Since LATAM is undergoing decentralization, how will the cities be empowered? (Global Solutions)
- There is a LATAM challenge to amend the legal frameworks to include effective citizens’ consultations in the early stages of the projects to improve the relevance and efficiency of the projects (+ acceptability of the fees by the users). (Abertis)
- There is a need to establish a policy framework and national infrastructure plans with clear principles, clear political, economic, social objectives and clear means to get there. (INECO)
- There should be a consistent and mature legal and regulatory framework i.e. robust legislation, efficient mechanisms to protect public interests, ensuring accountability, having a fair system for dispute resolution. (INECO)
- It is very helpful to have a single holistic plan linking the different departments, drawing a plan that would break the different silos. (DOXA Innova & Smart)
- The mayor needs to be a visionary: understand the DNA of the city, have a roadmap to mitigate the risks and stick to objectives. (Global Solutions)
- The idea is to build a network of cities to exchange views and best practices. (UNECE, DOXA)
- There is a general consensus to work on improving the communication about the actual benefits of a project. (all)
Additional remarks from CICA:
- There should be a global strengthening of the capacities of Public Authorities and their agents on a long term basis.
- There is a need for clauses facilitating the adaptation following the evolution of a project in the long term.
- There should be, since the origin of a project, clauses and parameters for compensation of the private partner.
- CICA invited the audience to participate in the CICA PPP Working Group chaired by Fernando Lago.