Scaling up Development Learning Innovations and the Open Learning Campus

Money has no boundaries; seduce it! How a small country market (foreign) investment in PPP projects

Jan van Schoonhoven Senior Advisor on Innovative Finance and PPP of the Netherland Government – Project Manager/Director / MSc Guided Missiles and Electronics / Project Finance Advise governments in strategic policy on developing and implementing PPP Strategic Finance strategy and provide Capacity Building NL Diplomat in Geneva at United Nations, Staff member UN , executive director PPP Centre NL Rep at OECD and World Economic Forum on Infra and PPP Independent director PPP Centre Kazakhstan, Consultant for the World Bank, Senior Fellow at IISD, Think Tank Infrastructure Strategy Institute and IP3 Director PPP Unit, 20 PPP projects, around 20 billion Euro’s Naval officer

Three lessons learned from Netherland Experience Outline Challenge : When the interest in your PPP program is lacking from the private sector (investors and construction companies) what do you do? Act like a government, think like the private sector Three lessons learned from Netherland Experience Disclaimer If a country thinks is has everything in place for PPP projects and it doesn't take of. There are many reasons on different levels for success or failure of PPP. This webinar addresses the lack of interest and how to overcome this. Lack of interest from investors, the government and the private (construction) sector.

How to attract international interest for PPP? Hello Holland (Netherlands)! When nobody is interested! When nobody wants it! How to seduce them? To the next level? Some lessons learned Questions

Hello Holland Billiton Euro’s INFRASTRUCTURE FUND NL ANNUAL BUDGET Roads, Rail and Water Infrastructure National Level

Could NL suggestions help? Since introduction PPP (2006) form place 13 to 4 in Infrastructure

When nobody is interested….... No interest in investing in NL PPP projects The Netherlands pension funds where not interested The 6th and 9th largest pension funds in the world Total of 7,120,000 million in infrastructure assists The Netherlands investors were not interested The International investors where not interested UK for PFI projects France for concessions projects

When nobody really wants it! Politician seem to be in favour but: Department is hesitating: Sell out own organization – what's in it for me? Hard to understand – expensive capacity building? Private sector is hesitating: Are you serious or not? – much investment! Small companies are left out! – not true!

challenge: Past - Future NO 2 projects, 1 Billion EUR/$ HSL – seen as an UK ‘project’ N33 – One Bank - BNG

How to seduce them? Towards the Private Sector: Become MORE attractive then your neighbours! Internally: Public sector: It’s MORE than just money! For the PPP Unit(s): Build trust and understand the business ! Switch from bureaucracy toward an entrepreneurial attitude without loosing identity

Private Sector Create and attractive market on international scale! NEW APPROACH TRADITIONAL Project Pipeline Number :12 projects Assets; roads, water, govt buildings, barracks, museum Your neighbours are competitors PPP Type: all DBFMO Standard contract Same conditions PPP program with consistent projects New: Project pipeline environment Individual projects Number:12 projects Assets: Roads, water, government buildings, barracks, museum No clue what your neighbours are doing PPP types: BOT, DBFMO, Joint venture, O&M etc Independent projects Actually: that's NO pipeline

Public Sector Win-Win situation for all! TRADITIONAL NEW APPROACH Ministry of Finance Enabling environment Ministry of Infra: Reduction of costs overall Improvement of quality In charge New: Financial solution with in infrastructure policy and ambition Support of all ministries Ministry of Finance Easy money Ministry of Infra Consequences? Risks? Hostile take over! Old: Financial solution, challenges and risk at the infra department Discussion between ministries

PPP Unit BE and FEEL responsible, Understand the business! TRADITIONAL NEW APPROACH Ministry of Finance & Infra PPP Unit Min. Fin: Policy PPP Unit Infra: projects In practice: Highly trained and motivated staff Real project experience In charge New: Professional staff Realisable face for private sector Ministry of Finance PPP Unit In practice No project experience! Only class room training No consistency in staff Old: Hollow shell, no additional value No face Q?: DO YOU KNOW YOUR PPP UNIT AND HOW DO YOU RATE THEM?

Wrap-up attractive - win/win - professional NEW - OLD

OUTCOME Over 60 Project in PPP Preferred procurement principle Time from tendering to financial close: 6-9 months Reduction of costs at private sector: 30% Competitive dialogue fast system for procurement In all sectors Standard contract for all assets in at central government Light standard contract for all assets in sub national level More interest from banks than needed at the moment

SUGGESTIONS ALL/WB Capacity building (public and private) Essential, but more then ‘PPP certificate’ Project + Capacity Building simultaneously NL Gov’t, WB and IP3 cooperation Innovation on training Simulation and on the job learning Coaching in projects and PPP units (skip seagull management) Tender and project knowledge within Gov’t Only when staff will remain at least 3 years Not only a financial tool; define Value for Money broader

QUESTIONS THANK YOU