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El. knyga: Public-Private Partnerships in Emerging Economies

(University of West London)

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"Over the years, a shortage of funds has resulted in a huge deficit in government budgets for infrastructure, especially in developing economies. It is no longer feasible for governments to bear the entire burden of funding public infrastructure. Given that an inadequate supply of public infrastructure poses a challenge for the economic development of any country, partnerships with the private sector to fund public infrastructure procurement has started to be relied on as an alternative to traditional public procurement. Public-Private Partnerships are an arrangement that allow private entities to fund, design, manage and operate public infrastructure for a term in exchange for the payment of tolls by users or the government may well be the solution to the infrastructure crisis in many developing economies. This book examines the role of law in the adoption, implementation and regulation of Public-Private Partnership in selected developing economies including Brazil, India, Nigeria and South Africa to address how to deal with overlapping laws and how the law can protect assets invested in PPP in order to attract private sector interests in infrastructure financing in developing market, showing how law can be used to create, sustain and promote PPP frameworks that take into account local circumstances in developing economies"--

Over the years, a shortage of funds has resulted in a huge deficit in government budgets for infrastructure, especially in developing economies. It is no longer feasible for governments to bear the entire burden of funding public infrastructure. Given that an inadequate supply of public infrastructure poses a challenge for the economic development of any country, partnerships with the private sector to fund public infrastructure procurement has started to be relied on as an alternative to traditional public procurement. Public-Private Partnerships are an arrangement that allow private entities to fund, design, manage and operate public infrastructure for a term in exchange for the payment of tolls by users or the government may well be the solution to the infrastructure crisis in many developing economies.

This book examines the role of law in the adoption, implementation and regulation of Public-Private Partnership in selected developing economies including Brazil, India, Nigeria and South Africa to address how to deal with overlapping laws and how the law can protect assets invested in PPP in order to attract private sector interests in infrastructure financing in developing market, showing how law can be used to create, sustain and promote PPP frameworks that take into account local circumstances in developing economies.

List of abbreviations
xiv
List of statutes
xvi
List of cases
xvii
Preface xviii
Acknowledgements xxi
1 Introduction to public-private partnerships
1(27)
1.1 Background
1(1)
1.2 What is PPP?
2(2)
1.3 Definitions of other terms
4(3)
1.3.1 Infrastructure
4(1)
1.3.2 Public sector
5(1)
1.3.3 Private sector
5(1)
1.3.4 Greenfield and brownfield PPPs
6(1)
1.3.5 Terms used in place of PPP in some jurisdictions
6(1)
1.4 The rationale for adopting PPPs
7(3)
1.5 Types of PPPs
10(3)
1.5.1 Concession
10(1)
1.5.2 The Private Finance Initiative (PFI)
11(2)
1.6 PPP distinguished from other similar types of procurement
13(3)
1.6.1 PPPs vs public-sector procurement
13(1)
1.6.2 PPPs vs privatisation
14(1)
1.6.3 Outsourcing vs PPP
15(1)
1.7 Advantages and disadvantages of PPPs
16(2)
1.8 The critical success factors for PPPs
18(3)
1.8.1 A favourable framework for PPP
19(1)
1.8.2 Transparency and anticorruption
19(1)
1.8.3 Ensuring a healthy investment environment for PPPs
20(1)
1.9 The PPP project cycle
21(1)
1.10 Selecting the right projects for PPPs
21(2)
1.10.1 The scope of the project and requirements
22(1)
1.10.2 Is the project PPP viable?
22(1)
1.11 Affordability, risk allocation, bankability and value for money
23(2)
1.12 Conclusion
25(3)
2 The framework for public-private partnerships
28(23)
2.1 Introduction
28(1)
2.2 The need for a framework
29(1)
2.3 Policy and PPP
30(4)
2.3.1 Policymaking in Brazil, India, Nigeria and South Africa
31(3)
2.4 Legal framework for PPP
34(3)
2.4.1 Key issues for a PPP legal framework
34(3)
2.5 The institutional framework
37(4)
2.5.1 A role for state institutions
38(2)
2.5.2 How the institutional framework can be designed to support PPPs
40(1)
2.6 Creation of a PPP law
41(2)
2.7 Setting up the PPP unit
43(2)
2.8 Regulation of PPP contracts
45(1)
2.9 Resolution of PPP disputes
45(2)
2.9.1 The challenge with PPP disputes
47(1)
2.9.2 The choice of law
47(1)
2.10 Protection for PPP assets
47(1)
2.11 Conclusion
48(3)
3 The public-private partnership contract
51(24)
3.1 Introduction
51(1)
3.2 The PPP procurement process
52(3)
3.2.1 The stages of a PPP project
53(2)
3.3 The elements of a PPP contract
55(7)
3.3.1 The concession agreement
58(1)
3.3.2 Sub-contracts
59(3)
3.4 Designing the main concession or PFI contract
62(2)
3.5 PPP arrangements and sanctity of contract
64(8)
3.5.1 The classical approach to sanctity of contract
71(1)
3.5.2 A modern approach to sanctity of contract
71(1)
3.6 Conclusion
72(3)
4 Brazil
75(13)
4.1 Introduction
75(1)
4.2 Introducing Brazil
75(2)
4.3 PPP in Brazil
77(1)
4.4 The framework for PPP in Brazil
78(5)
4.5 Stable political and social environment
83(4)
4.5.1 The socio-political environment and PPP in Brazil
83(3)
4.5.2 Public agencies administering PPP in Brazil
86(1)
4.6 Sponsored and common concessions
87(1)
4.7 The parties to a Brazilian PPP contract
88(1)
4.7.1 The public authority
88(1)
4 7.2 The project company
88(14)
4.7.3 The guarantor
88(1)
4.7.4 The investor
89(1)
4.8 Scorecard for PPP projects in Brazil
89(2)
4.9 Brief case studies of PPP projects in Brazil
91(2)
4.9.1 PCH Figueiropolis and PCH Ludesa
91(1)
4.9.2 Hospital do Suburbio
92(1)
4.9.3 Belo Horizonte schools
93(1)
4.10 Good governance and PPP in Brazil
93(5)
4.11 Conclusion
98(4)
5 India
102(19)
5.1 Introduction
102(1)
5.2 Introducing India
102(2)
5.3 Legal framework for PPP in India
104(1)
5.4 Land acquisition for PPP purposes
105(1)
5.5 Stable political and social environment
106(1)
5.6 Well-organised and committed public agencies
107(1)
5.7 Scorecard for PPP in India
108(3)
5.8 Brief case studies of flagship PPP projects in India
111(2)
5.8.1 Bhubaneswar street lighting
111(1)
5.8.2 Berhampur solid-waste management
112(1)
5.8.3 The Tuni Anakapalli Annuity Road Project
112(1)
5.9 Good governance and PPP
113(4)
5.9.1 Strong public-sector capacity
115(1)
5.9.2 Community involvement
116(1)
5.9.3 Adequate funding
116(1)
5.9.4 Efficient risk sharing
116(1)
5.9.5 Sustainability
117(1)
5.10 Conclusion
117(4)
6 Nigeria
121(39)
6.1 Introduction
121(1)
6.2 Introducing Nigeria
122(4)
6.3 Nigeria's federal system and PPP
126(5)
6.3.1 The Exclusive Legislative List vs necessity
127(1)
6.3.2 Items in the Exclusive Legislative List
128(2)
6.3.3 Items in the Concurrent Legislative List
130(1)
6.4 The essence of a framework
131(2)
6.5 How PPP is administered in Nigeria
133(2)
6.5.1 Regulations under the Infrastructure Concession Regulatory Commission Establishment (Etc.) Act of 2005
133(1)
6.5.2 Conventional public procurement vs PPP
134(1)
6.6 Other laws to be considered
135(4)
6.6.1 The Public Enterprises and Commercialisation Act (PECA) of 1999
136(1)
6.6.2 The Utilities Charges Commission Act (UCCA) of 1992
136(1)
6.6.3 The Environmental Impact Assessment Act (ELAA) of 1992
136(1)
6.6.4 The Debt Management Office Establishment (Etc.) Act (DMOA) of 2003
137(1)
6.6.5 The National Inland Waterways Act (NIWA) of 1997
137(1)
6.6.6 The Highways Act (Laws of the Federal Republic of Nigeria No. 35) (HA) of 1971
138(1)
6.6.7 The Fiscal Responsibility Act No. 31 (FRA) of 2007
138(1)
6.7 Regulations at the sub-national level
139(2)
6.7.1 Lagos State
139(1)
6.7.2 Rivers State
139(1)
6.7.3 Ekiti State
140(1)
6.7.4 Cross River State
141(1)
6.8 Laws regulating Foreign Direct Investments (FDI) for infrastructure
141(3)
6.8.1 The Nigerian Investment Promotion Commission Act (NIPCA) of1998
142(1)
6.8.2 Provisions relating to investments
143(1)
6.8.3 Protection for FDI under the Foreign Exchange (Monitoring and Miscellaneous) Provisions Act (FEMMA) of 1995
143(1)
6.9 Case studies of PPP projects in Nigeria
144(11)
6.9.1 The Lagos Ibadan Expressway project
144(3)
6.9.2 Lekki-Epe Concession Toll Road Project
147(3)
6.9.3 Murtala Mohammed Airport Terminal 2
150(2)
6.9.4 Cross River State Hospital
152(1)
6.9.5 Tinapa project
153(2)
6.10 Conclusion
155(5)
7 South Africa
160(30)
7.1 Introduction
160(1)
7.2 Legislative framework for PPP in South Africa
161(5)
7.2.1 The Constitution of the Republic of South Africa
162(1)
7.2.2 The Public Finance Management Act of 1999
163(1)
7.2.3 Treasury Regulation 16 (2004) to the Public Finance Management Act (Act No. 1 of 1999)
163(2)
7.2.4 The Municipal Finance Management Act (Act No. 56 of 2003)
165(1)
7.2.5 Municipal Systems Act (Act No. 32 Of 2003)
165(1)
7.2.6 The PPP manual and the standardised PPP provisions
166(1)
7.3 South Africa's PPP policy
166(2)
7.4 Institutional framework for PPP in South Africa
168(2)
7.4.1 The National Treasury's PPP Unit
168(2)
7.4.2 Institutions of government
170(1)
7.5 PPP practice in South Africa
170(9)
7.5.1 Inception phase
171(1)
7.5.2 Feasibility study phase
171(1)
7.5.3 Procurement phase
172(1)
7.5.4 Implementation phase
173(1)
7.5.5 Dispute resolution
174(1)
7.5.6 Funding of PPPs in South Africa
174(3)
7.5.7 Protecting funds invested in PPP projects
177(1)
7.5.8 The Protection of Investment Act No. 22 of 2015
178(1)
7.6 Case studies of PPP projects in South Africa
179(6)
7.6.1 The N4 from South Africa to Mozambique
180(1)
7.6.2 The Pelonomi and Universitas Hospital Co-location, Bloemfontein
181(2)
7.6.3 The prison contracts
183(1)
7.6.4 South Africa's Gautrain
184(1)
7.7 Challenges to the implementation of PPP in South Africa
185(2)
7.8 Conclusion
187(3)
8 A comparative examination of the regulatory environment for public-private partnership for Brazil, India, Nigeria and South Africa
190(22)
8.1 Introduction
190(1)
8.2 The establishment of an adequate legal framework
191(10)
8.2.1 Brazil's PPP framework
192(1)
8.2.2 India's PPP framework
193(1)
8.2.3 Nigeria's PPP framework
194(1)
8.2.4 South Africa's PPP framework
195(1)
8.2.5 Similarities in the frameworks of the selected countries
196(3)
8.2.6 Dissimilarities in the frameworks of the selected countries
199(2)
8.3 Innovations and good practice
201(5)
8.3.1 Brazil
201(1)
8.3.2 India
202(1)
8.3.3 Nigeria
202(1)
8.3.4 South Africa
203(3)
8.4 Weaknesses of the frameworks in the selected jurisdictions
206(3)
8.4.1 Brazil
206(1)
8.4.2 India
207(1)
8.4.3 Nigeria
207(1)
8.4.4 South Africa
208(1)
8.5 Conclusion
209(3)
9 Conclusion: the future of public-private partnerships in emerging economies
212(13)
9.1 Introduction
212(1)
9.2 A clear understanding of what PPP is and how it works
212(2)
9.3 The challenge facing emerging economies
214(2)
9.4 How to ensure successful PPP regimes in emerging \ economies
216(7)
9.4.1 Regulating PPP
216(1)
9.4.2 Unlocking the domestic financial market
217(1)
9.4.3 Respect for rule of law and sanctity of contract
218(4)
9.4.4 Offering incentives
222(1)
9.4.5 Regular training ojpublic officials
222(1)
9.4.6 Making guarantees available
223(1)
9.5 Conclusion
223(2)
Index 225
Dr Augustine Arimoro is a Lecturer in Law at Nottingham Trent University, Nottingham, UK. He is also a Barrister and Solicitor of the Supreme Court of Nigeria.