Basic plan for public-private partnership projects

[Review] The Basic Plan for Public Private Partnership (PPP) projects is published by the Ministry of Strategy and Finance (MOSF) in an effort to introduce not only the goals and objectives of the PPP system, but ways and means to participate in PPP projects in a great detail. It consists of four parts. Part I describes basic directions for implementing PPP system and implementation plan for a particular year, given the changes in PPP market and budgetary situation. Part II states general guidelines for PPP implementation and spells out PPP pertinent laws and regulations. This is probably the most important part for PPP practitioners because it elicits investment models of PPP projects, inclusive of estimating user fees and total project cost, determination of rate of returns, user fees for BTO projects, determination of government payments for BTL projects, financing of PPP projects, reasonable allocation of risks, management and operation of PPP projects, supplementary and ancillary projects, and related organizations including infrastructure credit guarantee fund. Part III describes detailed procedures for PPP project implementation, touching on those for solicited projects, unsolicited projects and BTL projects, respectively. And Part IV introduces supplementary provisions, covering such important topics as support of PPP projects and conversion between government-financed projects and PPP projects. Finally, the document also carries “Agenda” in which MOSF compiles public notices of various kinds, pertaining largely to such elements as enforcement decrees, minimum revenue guarantee (MRG), investment ceiling, refinancing etc. The Basic Plan is important for potential ppp project participants for the reasons as follows: First it descrubes PPP policy directions for a particular year, given expected changes in PPP markets and government budgetary situations. Secondly it specifies eligiable projects and programs in a great detail - both solicited and unsolicited ones. It also sets guidelines for the local governments and other public entities to adhere to when they rely on PPPs for the provision of basic infrastructure services as mecessary. Thirdly it elicits step-by-step procedures that potential participants and financiers must follow through in order to secure government approvals. And finally it also defines and specifies various subsidies, financial and otherwise, necessary to promote PPP projects. The type and level of subsidy depends on the degree to which such a project is in demand.