Sharing PPP Experiences across Borders

How valuable are lessons of experience in PPPs from other countries? Legislative and regulatory environments differ, as do market conditions and the overall investment climate. So replicating a successful PPP in another country isn’t a simple as following the same steps or using similar contract or tender documents.

But that doesn’t mean lessons cannot be transferred. Even if conditions vary, the underlying principles of PPPs remain the same regardless of where it is executed. For example, a PPP is always a long-term contractual agreement between a government entity and a private company; it must be financially sound if it is to work; and risks must be identified, mitigated and allocated effectively. The details of how these principles are applied will vary depending on the regulatory and market conditions of each country. But the examples remain valid nonetheless.

In Ukraine, PPPs have been slow to catch on, initially because the business climate was so weak. The country’s neighbors were all more successful at implementing PPPs: Poland has 65 PPP project underway according to the Ministry of Economy’s PPP database, and Moldova’s first PPP established a radiology and diagnostic imaging center. But none of Ukraine’s neighbors have done as well with PPPs as its Black Sea neighbor, Turkey.

Read more on the World Bank Group’s PPP blog.

Experts Presented Best Practices of Investment Public-Private Partnership Projects of Turkey

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Kyiv, November 28, 2014 - USAID Public Private Partnership Development Program and the American Chamber of Commerce in Ukraine held a meeting of the Public Private Partnership & Infrastructure Expert Center aimed at discussing Turkish experience of public private partnership projects implementation as well as feasibility of using the country’s best practices to develop appropriate mechanisms in various sectors of Ukrainian economy.

Turkey has successful experience in implementing projects of public-private partnership based on flexible public policies to support municipalities in establishing joint projects with businesses. Thus, due to using public-private partnership mechanisms by the Ministry of Health , the country has built 25 hospitals that provide 25,000 beds for in-patient treatment. As another example, the Ministry of Transportation has implemented the construction of two airports in Istanbul as well as those in Ankara and Izmir, which continue to operate under the public-private partnership. Among others – projects in urban environment restoration, construction and development of industrial parks, techno-parks, shopping complexes, pipelines as well as waste management development.

Participants of the Expert Centre also learned about the plans of the Government of Ukraine to establish conditions for investment in national infrastructure, discussed the ways of interacting among representatives of all levels of state authorities, schemes of attracting private partners, projects management models, as well as issues on improvement of legislation. The Turkish colleagues, in their turn, shared their plans to develop business in Ukraine.

“Turkey is the regional leader in using public-private partnership to include the private sector in infrastructure projects,” said Tatiana Korotka, Head of the Chamber Expert Center; Director of Professional Services, Public Private Partnership Development Program (USAID). According to Ms. Korotka, there are many valuable lessons from Turkish experience which can help Ukraine as it develops and implements its own public-private partnership projects.

The experts believe that the use of public-private partnerships will help to solve a lot of problems in various sectors of Ukraine’s economy. In addition thereto, it is a possibility to increase the value of local management in regional development.

Learning from Turkey’s PPP Experience

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Study tours are an excellent tool for sharing best practices in public-private partnerships (PPPs):  participants have the opportunity to talk to people who have faced similar challenges and can see the results with their own eyes.

As part of its objective to improve PPP Support Services of the MOEDT and other government agencies, P3DP sent a delegation of 15 officials to Turkey on a five-day study tour to learn about that country’s experiences with PPPs. The study tour was designed to develop their capacity to formulate effective PPP policies, evaluate proposed PPP projects, promote PPPs and support municipalities in their efforts to develop and implement PPPs.

In contrast to Ukraine, Turkey has used PPPs for decades for infrastructure and public services. The World Bank reports that in 2013, private participation in infrastructure in Turkey increased dramatically to $16.8 billion, by far the largest volume in the Eastern Europe/Central Asia region. There is much to be learned from their experience.

Participants included Roman Kachur, Deputy Minister of the MOEDT who is responsible for PPP policy at the ministerial level; the PPP Unit’s Pavlo Pakholko, Deputy Head of the MOEDT’s Department of Investments, Innovations and PPPs, two representatives from the National Projects Agency, and multiple municipal representatives from Donetsk, Luhansk, Kharkiv, Odesa and Ivano-Frankivsk regions.

During the tour, participants met representatives from government, the private sector, and developmental agencies involved in PPPs, including international development institutions; officials from the Turkish ministries of Development, Transportation, Maritime Affairs, Communications, Health, and the Turkish Investment Support and Promotion Agency; the Istanbul Development Agency and the Ankara Metropolitan Municipality. They also visited several industrial parks being operated under PPPs.

A follow-on event will take place in Kyiv focused on stimulating investment in Ukraine for the study tour participants and other interested stakeholder groups. It will continue the discussion about the approaches used by Turkey to attract investment and apply resulting experience to develop PPP projects in Ukraine, especially in healthcare, solid waste management, energy efficiency, infrastructure development, and industrial park management.