Attracting Investors to African Public-Private Partnerships: A Project Preparation Guide »

As growth and development in Africa increase rapidly, investment in infrastructure projects will often be best accomplished through public-private partnership (PPP). This Guide offers the foundation blocks for public sector engagement with the private sector.

The Guide contains an assessment of the issues relevant when selecting a project for PPP and the actions involved with preparing projects for market, including how the process should be managed. It looks at hiring and managing expert advisers and explains how the public sector should interact with the private sector during the project selection and preparation phases to ensure that decisions during these phases are based on a realistic view of what the private sector can provide. Additionally, it analyzes the issues of engagement with the private sector during the tender and after a contract has been signed.

About the Authors ix

Abbreviations xi

1 Introduction 1

Role of Public-Private Partnerships 2

Scope of the Guide 3

Limits to the Guide 5

2 Defining Public-Private Partnerships 7

Privatization and Management Contracts 7

Types of Public-Private Partnerships 8

3 Setting the Framework 13

Policy Rationale 13

Legal Framework 14

Investment Framework 16

Operating Framework 16

Summary 18

4 Selecting Projects 19

Project Scope and Requirements 20

Expressing Projects in Terms of Outputs 21

Can the Project Be Delivered as a Public-Private Partnership? 23

Value for Money 28

Initial Market Assessment 29

Lessons from Private Sector Engagement in Projects in Africa 30

5 Preparing Projects for Market 35

Management of the Process 36

Funding for Project Preparation 41

Unsolicited Proposals 42

Project Assessment 43

6 Project Advisers 47

Role of Advisers 47

When to Use Advisers 47

Appointment of Advisers 50

Role of Public-Private Partnership Units 50

Management of Advisers 50

7 Managing the Interface with the Private Sector 53

Preparation for Market Sounding 54

Before the Launch 55

Perception of the Project 57

Role of Development Finance Institutions, Regional Investors, and Donors 57

Transition to the Procurement Phase 59

8 Managing Procurement 63

Outcome of the Procurement Phase 63

Role of Advisers 64

Role of Development Finance Institutions 64

Bid Stages 64

Project Launch 66

Prequalification 69

Request for Proposals 71

Preferred Bidder and Financial Close 74

9 After Signing 75

Appendixes

A World Bank Private Participation in Infrastructure Project Database 81

B Sample Extract of a Risk Management Registerfor Managing the Public-Private Partnership Project Process 85

C Public-Private Partnership Web Sites 87

D Profiles of Five African Public-Private Partnership Projects 91

Songas Processing Plant in Tanzania 92

Maputo Port in Mozambique 94

Skikda Desalination Plant in Algeria 96

Lesotho National Referral Hospital 98

Water and Electricity Services Provision in Gabon 100

References 103

Index 105

Boxes

5.1 Common Problems in Project Governance 40

5.2 Common Mistakes in Project Preparation 41

7.1 Top 10 Tips for a Successful Market-Sounding Exercise 56

7.2 Major Concerns of Contractors and Investors 58

7.3 Major Concerns of Project Lenders 59

8.1 Project Information Memorandum 67

8.2 Bidders' Conference 68