Putting People First in PPPs for Sustainable Development

For many years Public-Private Partnerships (PPPs) were a rather narrow financial model for transferring project risk to the private sector. It was, for the most part, not viewed as a ‘development’ model, but rather as a value-for-money alternative to traditional public procurement. A change is beginning to take place. At a large UNECE international PPP Forum last week, a group of PPP practitioners, well versed in the traditional PPP model, gathered from all over the world, and were asked to show how their projects were fulfilling the Sustainable Development Goals (SDGs) of ‘People’, ‘Planet’ and ‘Prosperity’. In response to this challenge, many examples were given of how the PPP model can transform and improve the quality of life of socially and economically vulnerable people.

• In Haiti, small farmers, land owners, investors and the Government joined forces in a PPP to improve crops and the livelihood of people still recovering from the effects of a massive natural disaster;
• In Tajikistan, people of low income are benefiting from an affordable energy supply that enables them to heat their homes in the depth of winter;
• In the Russian Federation, a fully connected water supply allows building occupants to raise the value of their properties and raise funds for new businesses from banks; and
• In Brazil, universal access to electricity has reduced poverty and hunger in the communities served and reduced Green House Gas emissions.

Indeed, all the case studies that were presented, and are now included in the UNECE Compendium of PPP case study material for the SDGs, clearly showed a move away from a one dimensional focus on finance and risk allocation. This new, all-inclusive, ‘people first’ model emphasizes transparency, accountability and multi-stakeholder involvement. Furthermore, there was full agreement at the Forum that this vision of a PPP model which improves people’s lives, alleviates poverty and promotes a better planet, was indeed how the PPP model should be developed and mainstreamed into development financing in the future.

Speaking at this event David Nabarro, Special Adviser on the 2030 Agenda for Sustainable Development, referred the 2030 Agenda for Sustainable Development as “a political manifesto for the future of the world”. He identified a renewed interest in “multi-stakeholder partnerships” and called for the elaboration of new guidelines:

“As these multi-stakeholder arrangements are more and more coming into play, there is an absolute need for the establishment of sets of principles that governments can use to ensure that as they are implemented the full range of issues in the 2030 Agenda is properly taken into account. This includes transparency and accountability. They also tend to include the involvement of beneficiaries in decision making and clear governance arrangements.”

Not all the messages however were positive about use of PPPs for financing public infrastructure. One NGO argued that PPPs were not the most appropriate procurement mechanism to deliver the SDGs and several others pointed out that, for various reasons, many past PPP projects had failed to deliver expected benefits and that bad examples should be mentioned along with the good examples.

UNECE Executive Secretary Christian Friis Bach, speaking at the high level debate on whether PPP is the good model for supporting the SDGs, argued that, indeed, many past projects had failed and it was thus doubly important to develop standards for these partnerships so that mistakes and failures could be avoided in the future.

“I agree with people who see the problems and the failures and that is why I am passionate about standards. We all need to work on developing these standards to maximize the good points about PPP and minimize the bad points.”

Several speakers identified capacity building as an essential for implementing PPP standards. The Forum also held 20 work streams for developing standards and this three days of concentrated work and discussions attracted almost 400 participants from the public and private sectors, NGOs, UN agencies such as UN Global Compact, UN DESA, UNIDO, and UNCTAD, as well as the World Bank Group and EBRD. A delegation of almost 40 people came from China where PPPs are fast becoming a major tool for sustainable development and for mitigating the effects of climate change. The UNECE will organize regular international PPP forums to monitor progress in the development of standards.