Public private partnerships, legal frame & challenges

Moroccan experience

Public private partnerships, legal frame & challenges

Moroccan experience

Presented by:Fatim-Zahra Ettalbi, CJD Organization

Thoughts…“May you live in interesting times”

A chinese curse?

Deficits at all levels of government;

States often have requirement for a “Balanced Budget” and/or debt limits;

Infrastructure and service needs escalating;

Postponed maintenance and political decisions;

Cuts in services and government programs;

Thoughts…Today the past has a future!

Morocco worked on the reforms and labeled them as a need for both the king and the citizens

Moroccan revolution is based on the country’s need of development!

The government has revealed its willingness to improve infrastructure and public service provision

Thoughts…The government on its own is a bad

investor and a bad manager ! #truestory

…but it needs: Management EfficiencyNewer TechnologiesWorkplace EfficienciesCash Flow ManagementPersonnel DevelopmentShared Resources (Money?)

It has: Legal AuthorityProtection of Procurement Policiesgoals to meet public needsPersonnel – dedicated but constrained;Access to tax exempt financing

Private Sector Strenghs

Why adopt PPPs in Morocco?

- Morocco’s national objectives – prosperity and quality of life;These objectives require quality infrastructure

- Infrastructure deficit / Government investment escalating debt loads and constraints on public sector revenue - Government facing increasing demands for provision of infrastructure in a cost-effective manner

PPP is one of the best solution!

Public private partnerships

What is a PPP?A Public-Private Partnership is a contractual agreement between a public agency (federal, state or local) and a private sector entity.Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.

Source: European commission

PPP in MoroccoSample of Successfully Implemented PPP

1995: Launch of PERG (Rural electrification Program);access to electricity increased from 16% to 98% today (more than 20 billion dirhams)

1997: Launch of 2056MW coal-fired power complex in Jorf Lasfar (860 Million Euros) .

2004 : Central Gas Tahaddart (280 Millions Euros)

Agriculture: Irrigation project in El Guerdane (85 millions Euros)

PPP in Morocco

Urban transport: Tram Rabat-Salé (370 Million Euros)

and Casablanca (600 millions of euros)

2004: Tanger Med port, one of the main Cargo plateform in the Mediterranian and Atlantic (One Billion dollars)

2000 MW wind park in Koudia Al baida (64 millions Euros)

Legal framePPPs were governed in Morocco by the Law No 54-05 relating to delegated Management of public services.

OVERVIEW OF THE NEW BILL OF PPP FRAMEWORK :

Provided a platform to depart from traditional concessions and focus on the improvement of various public projects or public services via PPPs;

gives full control to the competent public entity in conducting the tender process, negotiating the PPP contract and monitoring its implementation,

Allows the selection of the most economically advantagous tender based on criteria produced in the tender document…

Legal frame

Definit ion of PPP Concept

Definit ion of PPP Concept

Definit ion of PPP modelsDefinit ion of PPP models

Introduction of objective

cri teria related to the PPP

Process

Introduction of objective

cri teria related to the PPP

Process

Extension of the scope by adding new sectors

Extension of the scope by adding new sectors

Objectives• Regulate the different concepts of private sector participation to public services under one title Profitability•Simplify the legislation and eliminate differences•brings a flexibility to implement different types of the PPP models.

Objectives• Regulate the different concepts of private sector participation to public services under one title Profitability•Simplify the legislation and eliminate differences•brings a flexibility to implement different types of the PPP models.

Unif ication of the PPP

Legislation

Unif icat ion of the PPP

Legislation Introduction of the risk concept

to the PPP Projects and

definiton of the guarantees

Introduction of the r isk concept

to the PPP Projects and

definiton of the guarantees

INNOVATIONS INTRODUCED BY THE DRAFT PPP LAW

Challenges…« we don’t speak the same language »

Challenges…

Political interference with procurement process;

Lack of Mechanisms that include Moroccan companies…

Lack of accounting and auditing procedures that leads to theft, fraud and corruption;

PPP in MoroccoWhen PPP didn’t work it looked like

this…

Conclusions so far……

PPP is an answer, not THE answer

The design of PPP matters;

Strengthening governance and the efficiency of investment spending will be critical to deliver results through infrastructure investment;

The fulfillment of global Commitment on Education makes the role of PPP inevitable for Morocco;

Conclusions so far……

Corruption hurts the poor disproportionately by diverting funds intended for development,

undermining a government's ability to provide basic services, feeding inequality and injustice,

and discouraging foreign investment and aid.

…

Thank you…