Fiscal Controls and Municipal PPPs

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Full competitive tendering for public private partnerships (PPPs) is considered best practice, Governments around the world have become acutely aware that PPPs can result in large future fiscal commitments that may not be apparent because they are not accounted for in the same way as normal liabilities (e.g. government debt). Contractual commitments to pay the PPP company over 20–30 years are technically not debt service, but they can have a similar fiscal impact. This note looks at the issues, especially in the context of municipal PPPs, discusses approaches used in other countries, and then gives suggestions for how Ukraine might deal with these questions as a first step.

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