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Algemene Rekenkamer | Postbus 20015 | 2500 EA Den Haag
Audit of Public Private Partnerships
Introduction and international Experiences
Freek Hoek, Netherlands Courts of Audit
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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
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PPP: two main types (1)
1. Concessions: DBFMO contracts
2. Alliances: Joint ventures
High Speed rail Link
Groningen Meerstad
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PPP: Two main types (2)
• Concessions:
• Alliances:
Public party
Private PartiesSpecial Purpose Entity
DBFMOContract
Public + Private Parties Special Purpose Entity
Public Parties
PrivateParties
Private Capital
Public Capital
Private Capital
PrivateParties
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PPP: Two main types (3)
Differences
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PPP: Some characteristics
• Long term relationship
• Private law
• Public and private capital
• Procurement
• Competition
• Transfer of risks
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PPP: Complications
Different roles of government
Differences in culture and values
Lack of expertise
Unsuitable procedures
Unclarity of goals
Political context
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Auditing PPP: International survey 2010
• 48 audit reports
• 13 countries
• 21 audit offices
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International survey 2010: Countries and reports
Country Number of reports Country Number of reports
Austria 1 India 8
Australia 4 Ireland 2
Belgium 2 Lithuania 1
Canada 8 The Nederlands 3
Czech Republic 1 United Kingdom 2 (72)
Germany 5 USA 6
Hungary 5
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International survey 2010: main findings
• Overall conclusions: Very critical of PPP
• Topics in reports:
1. Decisionmaking2. Procurement3. Financing and costs 4. Contractmanagement5. Evaluation6. Policy and conditions 7. Public accountability
• Value For Money???
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Auditing PPP: Conference 2012
• Goals: • Share knowledge and experience • Between SAI’s and experts• INSPIRE!
• 90 colleagues• 50 countries
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Auditing PPP: Conference 2012
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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
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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)
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Public Private Partnerships and innovation
• Innovation in government
• Knowledge
• Audit processes
• Standards
Innovation in SAI’s!
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Algemene Rekenkamer | Postbus 20015 | 2500 EA Den Haag
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