1 Algemene Rekenkamer | Postbus | 2500 EA Den Haag Audit of Public Private Partnerships Introduction and international Experiences Freek Hoek, Netherlands Courts of Audit

2 Public Private Partnerships (PPP): Definition Development and delivery of public services or public goods through a partnership of government and private sector companies Why PPP? Off

3 PPP: two main types (1) 1.Concessions: DBFMO contracts 2.Alliances: Joint ventures High Speed rail Link Groningen Meerstad

4 PPP: Two main types (2) Concessions: Alliances: Public party Private Parties Special Purpose Entity DBFMO Contract Public + Private Parties Special Purpose Entity Public Parties Private Parties Private Capital Public Capital Private Capital Private Parties

5 PPP: Two main types (3) Differences

6 PPP: Some characteristics Long term relationship Private law Public and private capital Procurement Competition Transfer of risks

7 PPP: Complications Different roles of government Differences in culture and values Lack of expertise Unsuitable procedures Unclarity of goals Political context

8 Auditing PPP: International survey audit reports 13 countries 21 audit offices

9 International survey 2010: Countries and reports CountryNumber of reportsCountryNumber of reports Austria1 India8 Australia4 Ireland2 Belgium2 Lithuania1 Canada8 The Nederlands3 Czech Republic1 United Kingdom2 (72) Germany5 USA6 Hungary5

10 International survey 2010: main findings Overall conclusions: Very critical of PPP Topics in reports: 1.Decisionmaking 2.Procurement 3.Financing and costs 4.Contractmanagement 5.Evaluation 6.Policy and conditions 7.Public accountability Value For Money???

11 Auditing PPP: Conference 2012 Goals: Share knowledge and experience Between SAI’s and experts INSPIRE! 90 colleagues 50 countries

12 Auditing PPP: Conference 2012

13 Conference 2012: Conclusions about PPP PPP may lead to faster results, better quality and lower costs of public services, but only in specific cases and under specific conditions Risk transfers to private parties are essential in PPP. The realization of this condition is not always obvious Government can not lean back after closing of a (DBFM) contract: management of contract-phase is crucial for VFM New accounting rules leave less room for off balance sheet financing. This may take away a (perverse) incentive for PPPs

14 Conference 2012: Conclusions about role of SAI’s SAIs should be aware of the different roles and responsibilities of government in PPP in order to be effective SAIs should contribute to the learning process where standards are still to be developed A longer term programmatic audit approach to PPP audit by SAIs makes investments in expertise worthwhile SAIs need access to information held by private parties (mandate)

15 Public Private Partnerships and innovation

16 Algemene Rekenkamer | Postbus | 2500 EA Den Haag algemene-rekenkamer