Government Approves Public-Private Partnership (PPP) Policy Framework

In March 2015, the Government approved a Public-Private Partnership (PPP) Policy framework for Saint Lucia.  The Policy which details the criteria for engaging in PPPs will provide an alternative source of funding to the Government in meeting the infrastructure and public sector needs while at the same time ensuring fiscal and debt sustainability.

A Public-Private Partnership (PPP) is defined as a “long term contract between a private party and a Government agency, for providing or managing a public asset and associated services, in which the private party bears significant risk and management responsibility.

PPPs can help increase the availability, quality and resilience of infrastructure and other public assets, and associated services while reducing fiscal commitment and risk involved in providing them.  PPPs can help mobilize additional funding and financing sources for infrastructure and public services.  In addition to providing value for money, PPPs provide for adequate maintenance funding, innovation and efficiency, focus on services delivery and accountability.

With the approval of the Policy, the Government will now be able to engage in long term contractual relationships with private sector entities which will introduce resources and expertise into the delivery of public assets and services.

Assistance for the Policy was provided by the World Bank and consultations were held with both the private and public sectors in its formulation.  This initiative was coordinated by the National Competitiveness and Productivity Council (NCPC) in collaboration with the Department of Finance.

The Policy has several objectives as follows:

• providing value for money – PPPs will be structured to achieve the optimal combinations of benefits and costs to the Government and users;
• fiscal responsibility where the impact of PPP projects is well understood, expected costs are affordable and the level of fiscal risk is acceptable;
• transparency and probity in how PPPs are identified, developed, procured and managed;
• environmental and social sustainable impacts of PPP projects will be carefully assessed and managed appropriately; and
• partnership and inclusiveness where PPPs meet and balance the objects of all interested parties – the government agency and its private sector partner, end users, employees and other stakeholders. It is expected the PPPs will be managed through a spirit of partnership and cooperation to achieve common goals of improved infrastructure.

The PPP Policy sets out the following:

• The definition of PPP and the essential features of PPP contracts;
• The objectives and scope of the PPP programme, in the context of Saint Lucia’s developmental objectives, and the specific objectives of this PPP policy;
• Processes by which PPP projects will be identified, developed, procured and managed – including how the Government will treat unsolicited proposals;
• Institutional responsibilities for the PPP Programme, and for developing, implementing, and approving PPP projects;
• Key commercial principles by which PPP contracts will be structured;
• The right approach to managing the fiscal implications of PPP projects
• Mechanisms for ensuring transparency and accountability in the PPP Programme.

The work of the PPP focal team will be strengthen by technical support through the Caribbean Development Bank.