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1. Project purpose

1.1      Project background

Differentiating high-quality Public-Private Partnership (PPP) projects that are fit for purpose for the SDGs from the rest is a crucial step in implementing the People-first PPP approach in national infrastructure policies and programmes.

In November 2018, the UNECE Working Party (WP) on PPPs recognized that identifying a proper evaluation methodology for scoring PPP projects, and encourage the various partners to make them People-first was the next most crucial step in implementing the People-first PPP approach; and that a joint effort from multiple stakeholders, including contributions from a broad group of experts and organizations was needed to develop such a methodology. The WP therefore requested the secretariat to give priority to the development of such a methodology, and to submit a proposal for the creation of an evaluation methodology project team to the Bureau, for consideration and approval.

1.2      Project rationale

Despite huge interest and commitment by all stakeholders in contributing to achieving the SDGs, there lacks real evidence on impact and performance of projects, which is a major lacuna, especially with regards to infrastructure projects. There is presently no mechanism to monitor the impact of these projects. Such a mechanism is however required for two reasons:

1. Prioritize investments by governments in infrastructure projects that meet the SDGs. Presently, most governments lack the knowledge and tools to select the right projects that will help advance the SDGs. Several UNECE PPP standards have been developed to assist governments in implementing the Guiding Principles on People-first PPPs. However, a proper approach to evaluate projects upstream is still lacking. The criteria, indicators and scoring mechanism for People-first PPPs can help governments focus on projects that deliver sustainable outcomes, and especially that enable social development and allow access to essential services for unserved population.
2. Help mobilize private financing and innovation capabilities in SDG-compliant projects and thereby overcome the insufficient financial flows and the lack of solutions that hinder progress on the SDGs. Private investors already have economic and financial metrics to evaluate projects, but most of them lack adequate tools to measure projects social and environmental impacts.

1.3      Project objective and benefits

The objective is to have a robust, standardized methodology to assess the extent to which PPP projects – either at the design and procurement stages or during Operations and Maintenance – are aligned with the SDGs, the overall objective being scaling up the People-first PPP concept so that existing PPP approaches lead to positive, measurable, intentional and tangible SDG impacts.

Specifically, the impact assessment tool will assist:

a.  Governments in evaluating projects at each of the PPP phases:

1. Design and procurement (ex-ante project assessments and investment decisions) enabling the selection of projects that make significant contribution to the SDGs;
2. Implementation and impact operations (post investment project decisions and strategies based on the evaluation and monitoring of SDG impacts).

b.  Development agencies, Multilateral Development Banks, and other lenders in financing viable and bankable projects with high economic, social and environmental added value.

c.  Private companies in adjusting their projects or in designing new ones with impact on sustainable infrastructure development in key sectors (energy, water, transport, education, healthcare, etc.) in the regions that require most resources. Private companies can use this tool not only for investment decisions (e.g. impact investment) but also as a mechanism to deliver high-performance in PPP projects (utility and infrastructure companies).

d.  Stakeholders including CSOs, including NGOs and academia, in assessing new and existing PPP projects at different stages of their life-cycle towards the achievement of the SDGs. The tool could also be used to enhance PPPs that do not meet the SDG requirements. Reporting on progress of infrastructure projects will improve transparency and governance in that it can strengthen people’s right to express their views on the merits and demerits of specific projects.

e.  In increasing the availability of good data on SDG-compliant projects and in scaling up knowledge on assessing sustainable impact of infrastructure PPPs.

f.  UNECE in enriching its 500 People-first PPP case study compendium.

The purpose of the project is to draw up and draft a standard model concessions law (“Model Law for PPP/Concessions”). New concessions laws have been enacted by many countries in the past 25 years, but vary widely in quality and content. Some of the more recent ones are very well structured and thought-through. Others, particularly less recent ones, are more deficient. Many countries are now introducing laws of this kind, as part of the process of launching new PPP programmes. This is therefore an opportune time to draw up a standard model form law of this kind, taking into account the most helpful, respected, tried-and-tested precedents in existence.

The Model Law for PPP/Concessions would be available for governments to draw on as they prepare (or revise) their own laws of this kind, providing both conceptual and structural guidance and precedent provisions. Its function would be to serve as a source of guidance and example, not as a ready-made, ‘off-the-shelf’ piece of legislation. It would need to be adapted as appropriate to each jurisdiction. In this way, it will provide invaluable assistance to countries embarking on PPP programmes for the first time, as well as those looking to improve existing frameworks, and will represent an up-to-date, first-rate standard of PPP legislation of this type. It will stand as a major contribution to the contemporary corpus of publicly available materials and guidance notes on this subject.

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2. Project scope

2.1      Application scope

The impact assessment tool should be readily usable by governments, private sector, private lenders, and international organizations, and applicable to all PPP sectors and all categories of PPP projects, whether they are small-scaled or large-scaled, national or cross-border. It can be applied to publicly-owned projects, PPP projects - both government-pay PPPs and concessions (user-pay) - or any other partnership frameworks (e.g. institutional PPPs).

2.2      Project activities and sequences

The design of this tool will result from a multi-stakeholder consultation process and a robust collaborative endeavor therefore ensuring effective implementation and wide-scale adoption. The development process should be conducted in a constant back-and-forth process compliant with the following sequences before the tool goes back to the Bureau for its consideration and approval:

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The project’s initial activity will be to identify support for or against the creation of a Model Law for PPP/Concessions and its ability to promote People First Public Private Partnerships in furtherance of the United Nations Sustainable Development Goals. Members of the team are invited to put forward their views on this question at the earliest opportunity.

The second, substantive activity will be the drafting of a coherent, wide-ranging, Model Law for PPP/Concessions. Various publications in the past (e.g. the UNCITRAL guides) have provided guidance as to the areas such laws should address, the advantages and pitfalls of different types of clause, and the issues affecting them. However, a systematic review of existing approaches and proven precedents, compiled and reflected in a single model concessions law, has not been undertaken outside the CIS countries (where a new ‘CIS Model Law’ of this kind has recently been developed) . Nor have any efforts to date focused on furthering the UN Sustainable Development Goals. The aim of the project would therefore be to draw up the provisions themselves, setting out a reasonably complete set of precedent clauses and a supporting implementation commentary, based on a compilation and synthesis of empirical evidence, and focused on the achievement of the UN Sustainable Development Goals

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3. Project deliverables

The project deliverables are:

3.1      The People-first PPP Project Impact Assessment Tool (“Tool”)

The Tool will consist of an evaluation methodology based on selected outcomes and indicators, and a rating index based on a weighting mechanism. In designing the Tool, the project team should meet the following requirements:

a.  Benchmark at least 5 existing evaluation tools, including those developed by organizations[1] and individual experts[2].

b.  Use the five People-first core outcomes[3] and other factors, including:

-  Intent: extent to which parties to the project intend to achieve environmental and social impact from their project;

-  Verification: that the impacts/outcomes are in fact able to be verified;

-  Location: that the locations of projects can make the greatest contribution to social development if they are in countries where the development challenges are the greatest.

c.  Identify relevant methodological frameworks or indicators under each outcome. These must be Specific, Measurable, Attainable, Reasonable and Time-bounded (SMART).

d.  Weigh each indicator and design a scoring mechanism and a rating index.

3.2      Key recommendations for the effective implementation of the Tool

The validation group will consider the possibility of developing the following implementation mechanisms and will make recommendations accordingly:

a.  A voluntary certification mechanism for governments and their partners on delivering People-first PPP projects. The role of various stakeholder groups - not UNECE - in providing these certificates should be looked at.

b.  An IT “knowledge-sharing platform” (e.g. the multilateral IT platform SOURCE financed by the MDBs) to centralize index results and the inputs and outputs leading to the People-first PPP outcomes. Such a platform can help increase the volume of official statistical data on PPP projects and disseminate results to all stakeholders, thereby facilitating the large-scale adoption of the Tool. Duplication should be avoided, but if such a platform does not exist or is not appropriate to host this tool, and is to be created, it could be developed jointly with IFIs, consultancy firms or non-for-profit actors.

c.  Deployment of the Tool in 10 flagship projects [4], ensuring reporting of (annual) results.

d.  Development of a management strategy to establish a continuous, self-sustaining process for global roll-out, in order to scale up the Tool to an increasing number of projects in developed, developing and least developed countries.

e.  Design and dissemination of an implementation guide, training materials, capacity building activities in selected countries, etc.

[1] E.g. Toyo University PPP School, IESE Business School, Tsinghua University. Other tools that could be looked at include, inter alia, the Institute for Sustainable Infrastructure Envision framework, the UNEP FI's Positive Impact Initiative Radar and Model Frameworks, etc. The project team might also consider using the UNECE draft benchmark developed on the basis of the People-first Guiding Principles.

[2] E.g. David Dombkins, Yu Namba, Pedro Neves, Alex Wong.

[3] Namely: Improve access to and equity in essential services, enhance environmental sustainability and resilience; Ensure economic effectiveness; ensure replicability and scalability; promote stakeholder engagement. Further detail on these outcomes can be found in the Guiding Principles on People-first PPPs for the SDGs.

[4] The 10 flagship projects are one of the three pillars of the cooperation between UNECE and the China National Development and Reform Commission.

The project will involve a review, compilation and harmonisation of highly-regarded, well-drafted and structured, proven concessions laws currently in existence, based on best practices and other experience-based insights into how a concessions law should be constructed and drafted. The main deliverable will be a new Model Law for PPP/Concessions based on these precedents, together with a relatively short commentary summarising and explaining the scope and operation of its provisions and how they will further the UN Sustainable Development Goals. It will be a comprehensive, fully-drafted document. It is anticipated that it will cover the main areas typically addressed by laws of this kind, including, among other elements: key definitions; applicable sectors for PPPs (and any exclusions); available PPP structures; identification of granting authorities; power and authority of granting authorities; administrative coordination; applicable budgetary mechanisms (if any); applicable regulatory provisions; procurement procedures; review and appeal mechanisms; risk allocation and government support; potential content of concession agreements; finance and security; step-in rights; available dispute-resolution mechanisms; inter-relationship with other laws; supporting regulations. It will focus on established principles, provisions and precedents, which are considered to be of most practical use as a source of guidance to governments, however, rather than attempting to cover every single clause that might be included in a concessions law.

Methodology: The project team will discuss and agree on the library of leading precedents and other reference materials and empirical evidence, the structure and scope of the proposed new model law, its optimum length and scope of contents, and the working processes and timetable for finalising it. We will draw up and agree a set of heads of terms covering the main provisions. The clauses themselves will then be drafted and circulated to the team members and other key stakeholders for comment. Guidance notes to the provisions will also be discussed and agreed.

4. Geographical focus

The focus is global as the Tool will be designed to facilitate wide-scale implementation of the Guiding Principles on People-first PPPs for the SDGs..

Care will be taken to ensure that it is also specifically relevant and applicable to the countries of operation of any International Financial Institutions (IFIs) specifically supporting the exerciseWhether the Tool will be successfully implemented and applicable for a global audience will depend amongst other factors on the level of consultation and validation that will lead to its development. The design process must therefore integrate the views of a broad range of stakeholders including representatives from governments, international organizations (UN bodies, the UN Regional Commissions, UN agencies, etc.), Multilateral Development Banks, lenders, the business community, academia, NGOs and CSOs, as well as individual experts from developed and developing countries.

5. Project team membership and required functional expertise

5.1 Project team

The Project Team will be comprised of two groups performing too separate but related tasks:

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Membership is open to experts with broad knowledge in the areas of

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PPPs and in particular those with experience in low and middle-income countries

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5.2      Project Co-leaders

Two co-leaders have been identified

• James Stewart, Chairman, UNECE PPP Business Advisory Board;

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leader

• Christopher Clement-Davies (c.clement-davies@virginmedia.com)

5.3      Role of the UNECE secretariat

Team members and co-leaders will work under the overall responsibility of the UNECE secretariat, which will appoint a project lead leader to oversee the entire project process.

6. Project leadership

7. Resource requirements

Project participants Participants in the project shall provide the resources for their own participation. The project’s existence and functioning of the project shall not require any additional resources from the UNECE secretariat.

8. Timetable