Keys to Efficient Public-Private Partnerships

Excessive government guarantees and errors in the tender processes are two of the "Seven Deadly Sins of Deficient Public-Private Partnerships" says the World Bank.

Monday, April 11, 2016

A report from the institution highlights the main mistakes made in the process of building partnerships between governments and private companies for financing and developing productive infrastructure.

The report notes that the raison d'etre of public-private partnerships (PPPs) can be summarized in three things: to attract companies and private sector investors to projects that would otherwise not be carried out; transfer to these a significant portion of the risks and costs that otherwise would have to be borne by the government; and ensure that the efficiency and quality of the project is at least equal to that which would be obtained if the government assumed all costs and risks.

But during the process - whether it be because of haste or lack of control- mistakes can be made. A World Bank analysis called "The seven sins of poor public-private partnerships" assesses what these failures are and gives recommendations for taking advantage of this well developed formula, which can benefit thousands of Latin Americans.

Read full report (in spanish).

More on this topic

Negative Message to Investors

October 2019

For the Guatemalan business sector, the decision by Congress to vote against the bill granting the concession to rehabilitate and operate the Escuintla-Puerto Quetzal highway "sends a negative message to potential investors."

The first positions emerge after learning that the Congress of the Republic buried the road project to rehabilitate and administer the highway Escuintla-Puerto Quetzal with toll collection, which would be granted in concession to the Consorcio Autopistas de Guatemala, under the format of Public-Private Partnership.

Public-Private Partnerships Not Being Leveraged

December 2017

In the four years that the law of associations between the State and private companies in El Salvador has been in effect, not a single infrastructure project has been able to materialize using this business scheme.

Although there are at least seven infrastructure projects that were initially proposed as being those with the highest priority and ideals to be developed under the public-private partnership scheme and with funding from Fomilenio II, none of them has managed to materialize. 

Public-Private Partnerships Needed in Costa Rica

February 2013

The Costa Rican government currently lacks the ability to solve, by itself, the problem of public infrastructure that has been neglected for many years.

An opinion piece by Carlos Camacho, published in highlights the delay in addressing problems in Costa Rica public infrastructure, a problem that directly affects the country's competitiveness, and gives the example that in the Competitiveness Report by the World Economic Forum 2012-2013, Costa Rica in infrastructure "received a score of 3.8 out of 7, and on the same subject in the overall ranking was ranked 74 out of 144, however, in the category of ‘Road Quality', Costa Rica was ranked 131 out of 144, and in 'Port Infrastructure ', 140 out of 144. Infrastructure is the second most problematic factor for doing business in the country, just ahead of the problem of state bureaucracy. "

Public Private Partnership Bill Stalls

October 2011

In Panama, medical professionals, who have now been on strike for a week, have opposed the project, forcing the legislative process to be suspended, until a consensus can be reached.

The main concept of the bill is that, in contrast to the traditional scheme, where companies are simply contracted by the State for the construction or development of public works, under the adoption of the PPP regime, the private sector would play a greater role in projects, funding the work and then receiving payment for the provision of services, on long-term contracts.

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