Public-private partnerships (PPPs) are an increasingly vital mechanism for governments to procure and implement public infrastructure and/or services using the resources and expertise of the private sector. Partnership between the public and private sectorscan help createinnovative solutions and bring financing to governments for more efficient services and better infrastructure solutions.
PPPs combine the expertise and resources of governments and the business community by sharing risks and responsibilities, enabling governments to reap the benefits of private sector know-how. PPPs allow the government to focus on strategy, policy, planning, and regulation, while delegating day-to-day operations to its private sector partner.
The Government of Jordan recognizes the importance of investing in infrastructure and public services in order to help the economy grow. The private sector represents an alternative and important source of additional funding at a time when public resources are severely constrained.
A number of factors make PPPs an attractive option. PPPs leverage private sector technology and innovation,resulting in better public services through improved operational efficiency. Private sector partners are motivated to deliver projects on time and within budget. They create more predictability in budget planning by setting present and future costs of infrastructure projects. PPP projects help the development of local companies through joint ventures with large international firms. PPPs help to diversify the economy and help to meet the growing demand for infrastructure development and service improvement.
The links between infrastructure and economic growth are well documented. Improved infrastructure positively impacts areassuch as poverty alleviation, equality, and growth as well as job creation, market access, health, and education.
The 2014 PPP Law and the PPP Regulation create a legal enabling environment and the institutional framework under which the Public -Private Partnership Unit operates within the Ministry of Finance. This ensures the appropriate oversight and transparency of the entire process from feasibility studies and contracting through implementation.
In order to produce successful PPPs, careful analysis of long-term development objectives and risk allocation is essential. This is where the Public-Private Partnership Unit asserts its role in upholding the legal and institutional framework of Jordan that has been developed for this new model of service delivery and to provide effective governance and monitoring for PPP projects.
The success of public-private partnerships depends on the maturity of the institutions in the economy, including legal frameworks on property rights, private contracts, dispute resolution mechanisms, and rules of entry and exit for the private sector among numerous other factors. For PPPs to be sustainable, however, they need to be properly understood, taking into account the interests and perceptions of all stakeholders.
Public-Private Partnerships represent the next, great chapter of Jordan’s economic development and the Public-Private Partnership Unit will serve to ensure that PPPs are managed responsibly, efficiently, and with constant oversight.
Dr. Ezzedine Kanakrieh
Minister of Finance