Public Private Partnerships (PPP) Kalat Al-Bulooshi CEO Oman - PowerPoint PPT Presentation

Public Private Partnerships (PPP) Kalat Al-Bulooshi CEO Oman Investment Corporation SAOC

PPP Definition "a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance “ “world bank definition”

PPPs: What is the Rationale Public Private Policy Leadership Contributor to Society • Setting national policy agenda • As a partner deliver public services and goods • Setting policy agenda for the sector Contributor to PPP Enabler • Providing resources • Creating investor friendly environment • Sharing risk • Facilitating the operations of PPP • Innovations and new solutions • New organisation culture Provider of Public Welfare • Educator / learner • Regulating and Monitoring to ensure that public is benefitting from the partnership Management and Accountability • Efficient use of resources Contributor to PPP • Citizen / customer satisfaction • Providing resources • Sharing risk • Educator / learner Public and Private: Both achieve their goals

Global Infra Deals, 2015 2014-15 317 PPP deals worth USD142bn InfraDeals 2015 Trend Report

Benefits of PPPs  More Funds : Bridges large funding gaps in physical and social infrastructure  Improving Project Management Skills : Enhances project planning and implementation skills  Lowering Cost : Leads to cost savings over the life of the agreement  Reduces Time Overruns : Time bound agreements and government monitoring improves project implementation  Improves Doing Business Environment : Government adopts new institutional and legal frameworks  Creates Investor Friendly Environment : Government adopts new regulations and reforms financial markets  Competitiveness : Government can select competing bidders as partners for various projects  Partnership Advantage : The capabilities of Government and Private organisations come together to provide efficient services to society  Diversification of Economy : Government can use funds to take up challenging projects  Private Sector Growth : More investment; more jobs; more tax contributions; regional development

Why PPPs for Oman ▪ Enhancing cooperation between public and private sector ▪ Economic diversification ▪ Using private sector funds and capitals to achieve government plans ▪ Job creation ▪ Country developments and implementation of plans

Typical characteristics of a PPP ▪ Long term contracts ▪ Private sector assumes delivery risk ▪ Optimum risk allocation ▪ Payments are output based • Better service and cost outcomes • Improved budget certainty

Oman Government financial outlay under traditional procurement vs a PPP

Comparative Performance of PPPs II Sources: (1) UK National Audit Report on PPPs (2) Allen Consulting group, Univ. of Melbourne, 200-07 . 9

Typical PPP contract structure

Risk allocation holds the key to PPP procurement

Risk transfer under procurement methods

PPP project development lifecycle

Progress to date in Oman ▪ The Government of Oman has a strategic intent to adopt Public- Private Partnerships (“PPP”) as a model to involve the private sector to boost economic growth. ▪ There have been several references to the potential of the PPP policy, in various speeches by Ministries and high ranking Government officials. ▪ The 9th Five Year Plan (2016- 2020) reflects the Government’s commitment to adopting a stronger and closer collaboration with the private sector. ▪ A Public- Private Partnership Taskforce (“ Sharakah ”) for PPP was established in 2013 ▪ PPP was a key initiative under the “ tanfeedh ” program

List of projects – Initial assessment PPP able projects Potentially PPP able projects Challenging PPP projects Commercial structuring is a key enabler Few / no precedents Many precedents    Power & water Industrial zones Food security    Roads/Highways Logistics/warehouse zones Fisheries    Bridges/tunnels Rail Oilfield services    Ports/Airports Economic cities Limestone factories    Healthcare Medical cities Cement factories    Education Fishing/fruits/vegetables markets Petrochemical services    Street lightening National parks Urbanization/real estate    Sewage/wastewater treatment Water network Rail rolling stock factories    Solid waste management Reurbanisation housing Hotel and resorts   District Cooling Banking   Universities Tourism services  Museums/Leisure theme parks  Social housing

Fundamentals for A Successful PPP

Political Support: For Oman PPP framework

Why is the legal and regulatory framework vital to a successful PPP framework?

Do We Have A Successful Track Record in PPP The Privatisation of the Power and Water Generation in Oman Power and Water Procurement Company SAOC have been VERY SUCCESSFUL and have been role model for others. Key Success Factors for Privatised Power and Water Sector are; • Right Policy and Regulations (Power Sector Law issued by RD) • Independent Regulator (AER) • Open, Transparent and Competitive Award Process • Right Risk Allocation • Competent and skilled procurement body (OPWP)

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