Publication: Contingent Liabilities for Infrastructure Projects : Implementing a Risk Management Framework for Governments
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1998-08
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2012-08-13
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To manage their exposure arising from guarantees to infrastructure projects, governments need to adopt modern risk management techniques. The authors introduce an integrated risk management system that draws on recent advances in the private sector. Adapted for use in the public sector, the system enables governments to budget for expected losses and to set aside reserves against unexpected losses, thus avoiding the budgetary stress associated with redirecting scarce public resources to cover a sudden increase in costs.
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“Lewis, Christopher M.; Mody, Ashoka. 1998. Contingent Liabilities for Infrastructure Projects : Implementing a Risk Management Framework for Governments. Viewpoint. © World Bank. http://hdl.handle.net/10986/11539 License: CC BY 3.0 IGO.”
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Publication Risk Management Systems for Contingent Infrastructure Liabilities : Applications to Improve Contract Design and Monitoring(World Bank, Washington, DC, 1998-08)Government guarantees for private infrastructure projects represent real liabilities, and their costs can average as much as a third of the amount guaranteed. The authors show how governments can use a risk valuation process to analyze the distribution of risks, decide which risks they should bear and which should be borne by the private sector, and reduce the frequency and size of calls on guarantees.Publication Government at Risk : Contingent Liabilities and Fiscal Risk(Washington, DC: World Bank and Oxford University Press, 2002)Conventional fiscal analysis fails to address contingent fiscal risk. The government budget process and documentation generally fail to scrutinize the substantial claims on public resources that are associated with government contingent liabilities, realized and potential. 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The Status Quo Report presented in appendix A provides an assessment of the Government's exposure to contingent liabilities and the existing policies and processes that are in place. Section three explains how Pakistan can better manage contingent liabilities by presenting recommendations to eight specific functions that will strengthen existing PPP policies. Section four analyzes options for who should perform the functions for managing contingent liabilities, and explains why we recommend empowering existing institutions in the preferred institutional framework. Section five presents the steps we suggest that the Government follows to implement these recommendations and operationalize an effective contingent liabilities management framework. Finally, section six presents assessment of international experience and good practice in managing contingent liabilities to provide additional context for recommendations in Pakistan. Appendix A includes the Status Quo Report from the first stage of this assignment. Appendix B includes a summary of the stakeholder consultation workshop conducted in Islamabad on July 21 to receive feedback on the draft recommendations for this assignment.Publication Fiscal Risk Assessment of Contingent Liabilities Associated with Natural Disasters(Washington, DC, 2012-06)The report titled ‘contingent liabilities: the Colombian experience,’ is the first publication on the management of contingent liabilities in Colombia. Published by the Ministry of Finance and Public Credit (MHCP), the report highlights technical and normative efforts and policy reforms on the management of contingent liabilities implemented by the Colombian Government. Policy reforms disclosed in the report pertain to the management of contingent liabilities borne by the Government from four different sources, namely public credit operations, contractual public-private partnerships on infrastructure development, legal actions against the Colombian Government, and contingencies resulting from natural disasters. Importantly, although natural disasters are the second most important source of contingent liabilities faced by the Colombian Government, most formal policy reforms have been directed to the institutionalization of managing the first three sources of contingencies, while legal reforms for the explicit accounting of natural disasters is an ongoing effort in Colombia.
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