style2

HI THERE, LET’S GET IN TOUCH!

  • Please enter a Name
  • Please enter a valid Email
  • Please enter a Message
  • Send

Frequently Asked Questions?


What is the institutional arrangement like in PPP implementation?

International experience suggests that identifying and establishing clear and unambiguous institutional functions in relation to... read more

What steps are involved in PPP?

The PPP project cycle covers five distinct phases; project identification, initial viability assessment, project preparation and development, project procurement and the post contract phase.
Minis... read more

Why does the Malawi Government need PPPs?

The Government of Malawi has recognised and publicly acknowledged through the highest office (of State President) that there is a need to explore more private sector involvement in the delivery of ser... read more

+265 (0) 1 823 655
2nd Floor, Livingstone Towers.

Faqs

You are here: Home » Faqs

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nullam in velit leo.

Donec sed neque vitae ante convallis suscipit. Sed vitae orci velit. Nam ut hendrerit mi, vitae volutpat orci. Proin aliquam est non sapien porta commodo. Phasellus mollis sit amet nibh eu faucibus. Cras a tellus vitae neque blandit ornare nec in erat.


What is the institutional arrangement like in PPP implementation?

International experience suggests that identifying and establishing clear and unambiguous institutional functions in relation to PPP early on in the onset of a country’s PPP programme can greatly assist in successful PPP implementation. While institutional roles and responsibilities may change over time as Government’s experience with PPP develops, a number of public institutions will play key roles in the programme and these are as follows:
The Office of the President and Cabinet (OPC): OPC provides broad policy leadership and overall direction of the PPP framework and the Public Private Partnership Commission (PPPC). Contracting Authorities are required to submit a PPP concept and project framework paper to Cabinet for approval before implementation.

The Department of Economic Planning and Development (EP&D);  EP&D will ensure that PPP projects fall in line with the national planning process and or the national infrastructure plan, as well as being consistent with the goals of the MGDS.
The Ministries and Contracting Authorities: This “ownership” role is to be carried out by a particular Ministry or one of its CAs.The PPP Act sets out the MCAs as owner of the PPP projects. At all times there should be an identified CA (sponsoring authority) taking on the ownership role, from inception through to construction and operation. CAs play a lead role in the identification, selection and monitoring of PPP projects in their sectors.
The Ministry of Finance (PPP Monitoring and Review Unit):  The Unit will carry the mandate of the PPP Monitoring and Review function and for the most part this is to ensure coordination of the review and screening of PPP projects in the interest of protecting the public interest. The review function, above all, assesses the relevant financial risks exposure to government which may be associated with the project. On the basis of this assessment the Ministry of Finance shall approve (or reject) specific aspects of PPP project in order to ensure fiscal sustainability, financial and economic viability and robustness of contracts over the long term. MOF will ensure fiscal sustainability for PPP projects, considering both direct and contingent liabilities on government’s finances including guarantees, arising from each PPP project. Specifically, MOF will be responsible for the following:
Fiscal impact: assessing the long-term fiscal impact of the PPP project (direct or contingent, explicit or implicit) and determining whether it is acceptable, given other national  priorities;
Government support: confirming the appropriateness of the project for sovereign guarantees (debt or specific-event) or other kinds of government support.
Will establish processes to incorporate PPP project development into the annual budgeting exercise, and fund direct as well as contingent (unanticipated) calls on the budget. MoF shall therefore ensure that any payments to be made by CAs under the PPP contract are consistent with the national budget.
 
The Public Private Partnership Commission: The PPP Commission is the Implementation Agency for PPPs.  The PPP Commission has extensive experience accumulated over the years in managing privatisation transactions. The expertise required for Privatisation transactions and PPPs is the same.  The PPPC is also responsible for developing guidelines on best practices to assist sector Ministries, Departments and Agencies in the roll-out of their PPP projects. The PPPC works closely with the Ministry of Finance in the review and assessment of PPP project affordability, value-for-money, feasibility, and contingent liabilities associated with PPP projects.  More specifically, the PPPC provides advice and support to CAs in the following areas:
Development of infrastructure sector policies and strategies where necessary to accommodate private sector financing and operation of public services;
Project Identification: Support with identification of infrastructure projects appropriate for PPP, concept development and exploration of different PPP options and undertaking pre-feasibility analysis;
Feasibility studies: Undertaking technical economic and financial feasibility studies, legal, environment and social appraisals, assessment of project risks and identification of solutions to mitigate those risks. This would include support in development of financial and economic models;
Procurement process: Supervising a competitive bidding process to select the best private sector offer.;
Negotiation: providing support to the CA during negotiations with the private sector provider;
Contract management/re-negotiation: assisting in on-going contract oversight, especially over the construction phase  and assisting in contract re-negotiation that might occur over thelife of the project, including re-financing;
Liaison with PPP Monitoring and Review Unit at MOF: Assisting the CAs in understanding the approval requirements (the Review function), helping them develop necessary documents for review and generally guiding the CAs through the approval process.
 Promotion and Capacity Building: promote PPPs in Malawi and internationally, ensures public awareness amongst all stakeholders, facilitate capacity building across the various institutions and provide guidance on PPP procedures and processes. 
Liaising to obtain financial support: Liaise with funding agencies and international development partners with respect to obtaining financial and technical support for PPP projects.
The Utility Regulatory Authorities: The regulatory authorities in telecommunications, energy, transport and water under their respective industry regulatory utility acts are usually required to issue licenses to private operators wishing to enter the industry permitting such  operators to provide specific services in the industry. RAs will need to liaise with the CAs and the PPPC to ensure that the terms and conditions as they relate to service standards and tariff (or any other regulatory matter) are consistent with the terms of the contract between the CA and the private party. Private investors/operators will see the agreement as a binding contract and will not expect the regulator to embark on discretionary changes to the tariff and service standards outside of the terms conditions set out in the concession contract. CAs will therefore need to ensure that the RAs approve the tariff formula or tariff discovery methodology and mechanism for changing service standards before commitments are made with the private part.
 


What steps are involved in PPP?

The PPP project cycle covers five distinct phases; project identification, initial viability assessment, project preparation and development, project procurement and the post contract phase.
Ministries, Departments or Public Institutions – who will be the Contracting Authorities CAs (assisted by PPPC and/or qualified and experienced transaction advisors as appropriate) shall rigorously go through the following steps to ensure that PPPs are carried out successfully:
1st step: Project Identification, Needs and Options Analysis: CAs with the assistance of the PPPC shall conduct Needs and Options Analysis to determine the best solution to provide the service / build infrastructure i.e. traditional public procurement or PPP route.
2nd step: Initial Viability Analysis and Pre-feasibility: Preparation of a Pre-Feasibility Study including possible location(s), alignment(s) and estimates of broad project costs and an initial indication whether the project is likely to be viable and affordable. The PPPC will provide advisory support services to CAs, while the Ministry of Finance Monitoring and Review Unit will review and provide comments, but not a formal approval at this stage. The PPPC in association with the Monitoring and Review Unit shall provide the requirements for the pre-feasibility study and determine if a full feasibility study is required.
3rd step:  Feasibility Studies: The Government will assess whether the proposed project is robust and meets GoM criteria for risk, viability, bankability, affordability and value for money. This includes estimates of viability gap and the need for incentives. Clearance and approval shall be sought from MoF (Monitoring and Review Unit) before proceeding to the next step of the process. The CA may be able to tap into the IPF   to carry out the feasibility study and related studies.

4th step: Procurement Process:  Management of the procurement process will largely be the responsibility of the PPPC working in close collaboration with the CA.
5th step: Contract Management: CAs and Regulatory Authorities (RAs) have responsibility for ensuring contract compliance, contract enforcement and contract adjustment/re-negotiation. The CAs as the landlord and signatory to the concession contract will ensure that the performance standards laid down in the agreement are met by the private party.  The RAs will ensure that the tariffs and technical quality/service delivery standards are in compliance with the PPP agreement (discretionary changes will not be permitted). The PPP agreement is a commercial contract and normally requires consent on the part of the two parties in respect of any changes. Where the RA is required to issue a separate licence for the PPP agreement there will be the need to ensure that there is consistency between the two instruments. The PPPC will coordinate the recruitment of owners engineering representative where necessary to ensure that the construction contractor deliver the project according to the standards laid down in the agreement and from time to time will carry out audits of the process.


Why does the Malawi Government need PPPs?

The Government of Malawi has recognised and publicly acknowledged through the highest office (of State President) that there is a need to explore more private sector involvement in the delivery of services and infrastructure in the country through Public Private Partnerships (PPPs) as a major means of uplifting Malawi out of poverty.  This statement was made on the occasion of a high level strategy review for the country’s privatisation programme in January 2005.  In addition, Malawi Growth and Development Strategy (MGDS) supports the theme of “strengthening the cooperation between the private and public sectors”, in order to improve the macroeconomic environment for business growth.
Aside from the contribution that the privatisation programme  made to introduce more private sector participation in the economy, the importance of PPPs in mobilising private sector resources to spur economic growth and the improvement of the nation’s basic infrastructure and services needed to underpin development progress for Malawi is critical.


What is the difference between OUTSOURCING, PRIVATISATION and PPP?

Unlike outsourcing (such as hiring a security or cleaning company to do a job, which is a lower form of PPP without risk transfer), a PPP entails the private party taking very substantial risk for financing a project's capital and operating costs, designing and building a facility, and managing its operations to specified standards, normally over an agreed period of time. In a PPP, the land typically belongs to the public institution, not to the private party, and the fixed assets developed in terms of the PPP are thus state property. Privatisation entails the divestiture of state interest in its property and functions - including all the assets and liabilities associated with that property and functions.


Latest Projects

seta