Public Private Partnershipin Jordan Executive Privatization Commission Tunis 16th Feb. 2007
Needs for PPP • Raise additional finance in an environment of budget constrains, • Improve economic efficiency and reduce investment risk, • Enhance infrastructure development, • Improve quality of products & services.
Public-private partnership: PPP Public-private partnership (PPP) refers to an arrangement between the government and a private enterprise, where the private enterprise supplies infrastructure assets and services that traditionally have been provided by the government
Pre-requisite for PPP • A stable macroeconomic environment, • Political commitment and good governance, • Clear legal framework, • A stable regulatory framework • Developing domestic financial market (bond market), • Development of expertise in the government, • Adequate risk transfer (government & private sector), • The development of a comprehensive approach to improving subsidy efficiency.
The need of PPPs in Jordan:Jordan Infrastructure Needs 2006-2015 Source: World Bank; The Hashemite Kingdom of Jordan, Strategy for Public Private Partnerships, November 17, 2005);
Principles and Requirements Accomplished: • PPP Policy; to be announced by GoJ • The Privatisation Law; provides legal framework for PPP • Regulations; specify and detail PPP implementation (Draft) Ongoing: • Pilot PPP transactions • Open local banking sector to PPP financing (long term, local currency) • Donor Assistance • Capacity building and institutional strengthening • Preparation and implementation of PPP pipeline in Jordan
PPP Institutions • PPP Implementing Agency: EPC • Implements PPP programme • Coordinates with other stakeholders. • Major Public Stakeholders: • Ministry of Finance • Ministry of Planning and International Cooperation • Ministry of Industry and Trade • Line Ministries (of sectors concerned) • International Support: • Trust Fund (World Bank administered) • EU Technical Assistance • GoJ/Multi-donor PPP Fund USAID
Ongoing PPP Pilot Projects • Queen Alia Airport Expansion • Medical and Industrial Waste Treatment Plant at Ghabawi • Waste Water Treatment Plant at the Dead Sea • 5-Star Eco-Hotel near Petra • Municipal Solid Waste Recycling for Greater Amman
PPP Fund • World Bank is establishing PPP Fund • Nature: multi-donor financing facility • Purpose: to facilitate private lending for PPP projects • Preliminary commitment: World Bank, USAID, OECD, JICA (TA)
Macro management PPP Institutional framework Market Failure support PPP Scorecard- John Speakman-WB MTEF Contingencies Pipeline /VFM Policy Law Unit Competent Regulators Subsidy management Capital market support Algeria Bahrain Egypt Iran Iraq Jordan Kuwait Lebanon Morocco Oman Qatar Saudi Arabia Syria Tunisia UAE West Bank Gaza Yemen Well developed Partially developed No Action
Challenges Facing PPPs • PPPs are still new. • Need for PPP guidelines. • Experience exchange between regulators. • Lack in experience in PPPs. • Hard regulating the Concessions granted before establishing regulators. • Lack of independence; sector ministers interference in regulators jurisdiction.