1. EFFECTIVE LEGAL FRAMEWORK FOR PPPs
By Peter Stein
Presented at OECD-seminar on PPPs For Infrastructure Financing
Istanbul

2. GUIDELINES TO ACHIEVE SUCCESS WITH PPPs
Do not view PPP as simply a method to raise private capital
Main argument for PPPs is that they make use of private sector skills
Strong political commitment and good governance
Key decision-makers should be viewed as influential
Clearly stated principles when to use PPP and why
PPPs result in efficiency gains when the quality of services is contractible, there is adequate risk sharing and incentive-based legislation

3. KEY COMPONENTS – NATIONAL LEVEL
Appropriate legal framework-overhaul of legislation
Usually traditional laws on public work do not have sufficient flexibility to design PPPs
Need for well defined accounting rules and clear channels of responsibility and accountability
Earmarking revenues for future PPP-payments
Competitive procurement with fair treatment of all bidders
Optimal risk-sharing

4. KEY COMPONENTS – PROJECT LEVEL
Output-based contracts
Payments to provider linked to performance over the contract life
Project manager independence and authority
Effective mechanisms for conflict resolutions and benchmarking
Establish policy how to divide benefits resulting from refinancing

5. ON COMPETITIVE PROCUREMENT
Maximise competitive tension until last minute
Choose provider based on price and quality
Model prospective shadow price bid
Keep option of unconditional bidders

6. EXAMPLE HOW TO SHARE RISKS

7. PETER STEIN CEO Stein Brothers AB pstein@comhem.se Kommendörsgatan 14
SE Stockholm
Tel:
Fax:
GSM: