0 The United Nations Economic Commission for Europe (UNECE) PPP Alliance “Establishing Successful PPPs in Europe: An Overview” First International Conference Perspectives for Ukraine on Implementation of Public-Private Partnership Infrastructure Projects March 21, 2006 Kiev, Ukraine Presented by: Arthur L. Smith Vice-Chair for PPP Research and Education, UNECE PPP Alliance Council for Public-Private Partnerships President, Management Analysis, Incorporated

1 Background Following the Global Compact and the Millennium Summit, the United Nations issued a declaration calling for the creation of Public-Private Partnerships (PPPs) to address critical challenges of economic and social development. Now common in most western European nations, PPPs are increasingly being employed to provide infrastructure development in central and eastern Europe. This creates a growing need for PPP-related expertise to ensure that these projects achieve their economic and social development objectives

2 The UNECE Role The objective of PPP Alliance is to improve the awareness, capacity, and skills of the public sector in developing successful PPPs in Europe. The PPP Alliance achieves this objective by: –Providing training and education –Developing publications –Providing neutral forum to exchange best practices –Providing consultative support, and –Performing PPP-related research.

3 POLICY FRAMEWORK LEGAL INTEGRATION PPP FINANCIAL INSTRUMENTS TENDERING PROCEDURES ARBITRATION / DISPUTE SETTLEMENT CONCESSIONS LEGAL FRAMEWORK The PPP Enabling Environment

4 Policy Framework High-level Government Support Clear Policy Statement Central PPP Unit –PPP Centrum (Cz), Partnerships UK, Irish Central PPP Policy Unit, Kenniscentrum (Dutch PPP Knowledge Center)

5 Concessions Legal Framework Create sound legislative basis for PPPs Provide clear definitions and applicability Provide stable legal framework Provide fairness and transparency

6 Legal Integration Establishment of a strong concessions framework does not provide the full legal structure necessary for successful PPPs. A holistic approach is required, in which statutes related to property rights, procurement, domestic and foreign investment, etc. are integrated with the concessions law. Consistent and objective judicial enforcement is required.

7 Tendering Procedures Public advertisement of PPP opportunities, in a recognized (standard) source or sources, with provision of international exposure Clear, detailed Requests for Tender, with full disclosure of all known risks Opportunity for bidder comment on Request for Tender Clear, detailed tender evaluation procedures, known to all parties, and providing a level playing field Clearly stated project goals and objectives

8 Tendering Procedures (cont’d) Clearly stated performance standards for assessing project performance Open participation in tender process, to include foreign- owned firms Qualified tender evaluation board, with subject matter expertise and no conflicts of interest Objective, documented evaluation and negotiations process, consonant with the published evaluation factors Public notice of award, with debriefing opportunity for unsuccessful bidders

9 Arbitration / Dispute Settlement Inclusion of dispute resolution procedures, to include third-party arbitration and/or choice of forum (access to international arbiters or bodies)

10 Financial Instruments Creation of financial structures which will facilitate generation of project capital Availability to security instruments on the assets and cash flow of concessions, to include “step in” rights

11 European PPPs Perpignan – Figueras France and Spain Channel Tunnel Rail Link (CTRL) United Kingdom Hamburg Airport Germany

12 Completed PPP Projects (U.S.) Dulles Greenway Pocahontas Parkway Virginia Dulles Greenway Virginia Route 3 North Massachusetts Las Vegas Monorail Nevada

13 For More Information See the UNECE PPP Alliance’s “Governance in Public Private Partnerships for Infrastructure Development” at