Mark Mosely: Global Infrastructure Hub is an initiative of the G20 taken by the G20 Leaders when they met in Brisbane at the end of 2014. One of the five mandates that was given to the Hub by the G20, was to develop so called leading practices, tools that governments could use if they wanted to enhance their infrastructure, particularly again private sector investment in infrastructure.
Now I had been involved in an initiative of the World Bank back in 2015 to create recommended contractual provisions for PPP transactions and an initial draft of that document was prepared and it was well received, but in the workshops that were held in respect of that document, we received feedback that the recommended contractual provisions embodied a certain understanding of risk allocation and it was pointed out by some of the workshop participants, that in many countries, countries that didn’t have experience with public private partnerships or PPPs, those countries really didn’t have a deep understanding of risk allocation. Some of them may have thought ‘ahh a public private partnership transaction, that means all of the risks for all of the projects get transferred to the private sector’. Well of course if you try and do that the projects don’t succeed.
So the suggestion was made during these workshops that an additional tool was needed. Specifically a tool that would provide guidance to countries that weren’t familiar with the PPP process but wanted to do PPPs that would give them a deeper understanding of what risk allocation was all about.