Publication: How Do Countries Measure, Manage, and Monitor Fiscal Risks Generated by Public-Private Partnerships? Chile, Peru, South Africa, Turkey
Date
2014-09
ISSN
Published
2014-09
Author(s)
Aslan, Cigdem
Duarte, David
Abstract
The topic of managing fiscal risks
arising from public-private partnerships is receiving
increased attention as more governments turn toward this
type of financing for large infrastructure projects.
Governments can manage balance sheet exposure to
public-private partnerships by quantifying and capturing
direct obligations and provisions for potential calls on
government guarantees associated with public-private
partnership projects in the preparation of the medium term
fiscal framework and annual budget. This working paper
examines how four countries with active public-private
partnership projects manage the costs and risks of financial
obligations generated by these investments throughout the
lifetime of the contracts. The paper seeks to complement the
existing literature with a practitioner's point of view
while exploring if and how these countries monitor and
evaluate the fiscal risks generated by the portfolio of
public-private partnerships (as well as individual
projects). The countries covered are Chile, Peru, South
Africa, and Turkey, all of which have experience
implementing public-private partnership projects. The
research finds that countries have tailored fiscal risk
management and monitoring frameworks to fit their
circumstances and respective budgeting, accounting, and
reporting practices. All four countries assess the overall
or partial credit exposure to monitor and manage their
fiscal commitments from public-private partnerships in a
consolidated way. All countries have developed evaluation
models to help assess fiscal risks and assess project and
portfolio level credit exposure. Further scrutiny could be
focused on budgeting and accounting practices, which could
be strengthened and brought in line with international
standards. Similarly, sharing and standardizing information
would improve transparency and accountability.
Link to Data Set
Citation
“Aslan, Cigdem; Duarte, David. 2014. How Do Countries Measure, Manage, and Monitor Fiscal Risks Generated by Public-Private Partnerships? Chile, Peru, South Africa, Turkey. Policy Research Working Paper;No. 7041. © World Bank Group, Washington, DC. http://hdl.handle.net/10986/20375 License: CC BY 3.0 IGO.”
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