 So, welcome to this webinar on 25th of June 2020, it's about public-private partnership a relational approach. My name is Adeltoa Square, I'm a Director of Safety in the Centre for Financial Management Studies where I specifically convene the programs of MEC, Public Policy Management and MEC, Public Financial Management and I work as a Senior Lecturer in the School of Finance and Management. I'm generally interested in public policy, public management and public financial management and I have a specific interest I would say also in public-private partnerships as a tool for collaboration, coordination in between public entities, governments and private entities could be investors, firms in various areas, PPP can be a very broad term as you know, it may cover various sorts of collaborative arrangements or they often relate to development of infrastructure. So, we may deal with the transport infrastructure, energy infrastructure, water and sewage infrastructure and in many countries PPPs have provided us so far to be a way to help fund the government for undertaking such programs, although occasionally in a little bit of a contested affection. General Outland, what I'm going to cover is just divided into three parts. So, I will talk first a bit about current trends and tendencies around the PPPs, then I will try and frame basic problems we face with the PPPs and then an introduction to a so-called relational approach to PPPs and I should anticipate ideas which I share here are what will be incorporated into a book that's still a work in progress on the design management and politics of public-private partnerships which has been a bit delayed for various reasons including of course the practicalities and logistics of working under the pandemic, but here I'm very glad that I can start to share some really preliminary ideas. Let's start off from some general trends and tendencies around the PPPs and probably it makes sense to distinguish in between pre-COVID-19 pandemic and in the middle of it and the post the pandemic environment. So concerning the tendencies trends we have been experiencing in the past, a source of information could be international organizations like for instance the World Bank and for instance if we have a look at last year's annual report on private participation of infrastructure, if we consulted their website on database of PPP infrastructure, then we can find some evidence about the tendencies and this is an interesting way to start. As you can see this diagram shows over the last few decades the total number of investment and the total number of projects in PPP specifically for infrastructure. The basic idea here is that we have experienced like a first wave which is this one coming during the course of the 90s and then dropping around the turn of the century and that's where the very core original idea of PPP especially in the form of PFI, private finance initiative in the UK took shape and say probably at that time PPPs were mostly a European affair where the UK by itself played like 50% of the market of PPPs in Europe followed by Spain, Portugal and a few other countries. Then the world became a bit cold if you like concerning PPPs but then in the last about 15 years we started having a surge of interest at a truly global level. So PPPs in Latin America and then also in Asia and lately also in Africa started to gain steam in a sense and we had more and more of them. Well in sort of a plateau as you can see in the last few years there could be various reasons for this. An argument could be that the low hanging fruits had been already picked so in a sense the more evident ways to use PPP to fund infrastructure, large infrastructure had been already made. For some years there was quite an interest of PPPs in China which could have accounted for quite a lot of increase in this period. At present we are as I said kind of a plateau. PPP programs are still going on in many countries in Asia. We may reasonably expect it was in our plans to use PPPs even further and also in a number of countries in Africa as well. Another slide gives us some indication about what sort of projects we are talking about. The global scale electricity energy generally is one main area where PPPs have been used both in terms of total rate of investment and total number of projects followed by a transport infrastructure. Here we can see roads, we can see highways and then other of these bubbles which are not shown in this diagram they refer to harbours, to airports and then also to water and sewage infrastructure. As a way of location as you can see all over the world basically we can see PPP projects going on. There are in Europe and Central Asia, there are in Latin America, in the Caribbean, there in East Asia and Pacific. We may expect in areas like Middle East, North Africa, South, South and Africa also this could be areas of increased number of projects in the future. If we look at which countries it is especially however a financial scheme which is scaling down from developed industrialized countries to upper middle income countries first and then to lower middle income countries. The low income countries may not posses the legal regulatory financial infrastructure to fully enable these schemes to take place yet. I have a couple of additional slides to share concerning just evidence of tendencies. This one comes from a European investment bank and so this is zoom into the European area as said earlier kind of a source origin of PPP phenomenon and here as you can see the interesting point to highlight is that we have less projects around energy and electricity but it's mainly transport infrastructure which attracts most of PPP projects also followed by health care and education also conveyed in the number of projects not just the weight of projects but as you can see the three main areas of this diagram are those concerning transport health care and education. So this provides an idea of the tendency that we have experienced so far last year concerning PPPs but of course we should we should add something more. The point to add I believe is that there has been an increased interest towards infrastructure in relation to the pursuit of so-called sustainable development goals and for a couple of reasons. First as you may know there is the 17th SDG which is specifically about a partnership for goals so there was an argument made within the very early conception of SDGs that getting the private sector involved could help in attaining all these SDG objectives set by the United Nations venue. SDGs can be achieved through various formulas and one could be to attract investors and private participation especially when there are infrastructure to be built or generally expertise managerial skills to be shared. This SDG number 17 is not by intended to achieve any particular development goal by itself it's more like an administrative or strategic sort of approach with PPPs in order to attain all the other goals. So it is also in the context of SDGs that PPPs can play an important role but on the other hand there is the present there is the immediate future and the breakout of the COVID-19 pandemic put first a lot of threats towards ongoing PPP projects for many reasons but basically because of the lockdown and slowing down of economic activity all the financial flows have been affected including those which can generate the revenue in order to pay back investment including infrastructure apart from the very construction of infrastructure itself by and larger in some cases. So at present there have been some measures which have been undertaken especially within the World Bank Forum and also similarly in the IMF basically in the form of assistance to come in order to appraise the state of PPP projects how these have been affected by the pandemic and to explore ways in order to ensure the financial sustainability for the years to come. Here I should say by and large as understood a number of PPP projects could have or built a safeguard some some measures contingency measures to anticipate that in case of a force majeure so in case of events beyond anyone's control which could dramatically impact the execution of the project there could be already specified in the contractual financial arrangements some ways to safeguard the projects like to delay payments for instance or to provide some forms of support in order to to ensure for a time period in the future the project to be frozen if you like or to go on at a lower pace before regaining full speed at a later stage. And that's a very exploratory scenario we have at the moment so on a case-by-case basis work is going on concerning how PPPs are affected and we may expect things will get clearer in the months to come. So this is concerning an overview of tendencies and possibly future tendencies around the PPPs and then we can move towards discussing more specifically what sort of problems are posed by PPPs which as I said are especially conceived within the area the context of infrastructure development. So as you know PPPs are a legal financial scheme which basically brings together different entities around a project which typically incorporates both a financing part, a construction part and a public service delivery part. So in this diagram the idea is to show the role of the government funding here on the left the corporate funding on the right typically they join together into a new legal entity a special purpose purpose vehicle typically the same SPV may search for additional financing from bank loans or sometimes grants and I'd say the ventures it typically ventures typically highly leveraged in the sense that bank loans for instance can provide 90% or more of the actual financing into the SPV vehicle which undertakes construction typically not directly they contract out construction to entity firms which could be sometimes part of the same group which originates the scheme on the private sector side from the same investors could be subsidiaries for instance of the same group as well as a subsidiary could work later as an operator so we may not really have the SPV acting also in the delivery side but an operator like a concessioner in a sense is the one which will actually deliver the public services on the top of the infrastructure which has been built like for instance to generate revenue out of tall roads, tall bridges and so on and the idea is of course that the financial scheme generated from their project revenue is able to pay back the loan to the banks and to provide a return to investment to the corporate side of the private side. This is a very general template of course there are quite a lot of variations on the legal scheme financial arrangements just as it is worth mentioning among the complexities of the scheme could be the side of the role of the government especially in the form of which contributions they bring to the PPP scheme so the government may contribute as a partner of the SPV so they may just subscribe and pay for the shares but actually this contribution can come in different forms rather than paying cash for the shares of the SPV for instance the government can provide any kind of contribution for instance the land where anything is to be built or to provide various sorts of support to the projects. This sort of support as you may not come is in different forms sometimes it could be plainly in the form of grants although they may take different forms so for instance could be yes a grant directly for the construction or could be in a way in the form of a tax holiday or tax credits in order to increase the profitability of the venture could be in the form of a shadow tariffs or top-up tariffs so basically grants in the forms of subsidies regular subsidies in case the revenue from the projects is not really enough in order to provide a ammuneration to the capital investor the space from the side of the private investors but on the other hand the government can play an important role under the category which is shown here as contingency liabilities so it means all the sort of guarantees the safeguards the government can provide just in case anything goes wrong the project so like in forms of insurance or hedging or even conditions of a takeout financing if the project that's not is not profitable anymore and basically there is a sort of bailout bailout if you like from the side from the side of the government then of course there can be even more sophisticated schemes like for instance where it is not really the government but could be some government controlled entity to play the role of the development fund or a financing entity to support the project but generate the ideas that the government can play an important an important role in this sort of hybrid regime because typically one more idea to share is that PPPs are typically located in this sort of green area in between two extremes of full privatization on the one hand and just the mere concessions like operation and maintenance of an infrastructure we have on the one on the one extreme full private sector involvement and private sector risk in operating an infrastructure and delivering services on the other hand it is the government to retain ownership and control and also to orchestrate the delivery of the service and the private sector could play a minor role like a maintenance for instance and we have a number of different arrangements in between where also generate the PPP scheme falls so we have an allocation of rights of control and allocation of risk between the private and the public partners in managing these projects. PPPs as you may know they do entail quite a number of advantages but also some possible disadvantages this also relates to a number of controversies around PPPs so in principle this is a way to fund infrastructure development which can be quite helpful especially if there are less options in order to get anything funded in terms of infrastructure development for instance there is little fiscal space there's little scope for the government to have more depth in order to fund infrastructure so to bring in the private one could be a way an alternative way to really fund anything to happen. There are also arguments that the presence of a private entity also provides better incentives to be efficient and to cause the effectiveness especially if you like with respect to a stereotyped understanding of a public sector generally more inefficient more like acting as an employer of last resort sometimes so therefore the presence of a clear interest for profitability of the venture could help to provide some financial discipline financial fiscal discipline if you like to the to the on the other hand there have been a typical number of concerns around the PPPs eventually the service is typically offered to the public for a price although there could be subsidies of course so typically we make space an increase of a price or a tariff there are issues around the quality that the partially private entity or a private entity deliver so we need the proper system of monitoring of the quality of services is fulfilled there is a perception that sometimes the private investor could get an unusually high and therefore perceived as unfair the turn to capital especially if you take into account that sometimes this return to capital investment is kind of guaranteed with a sort of safeguards and guarantees that the public public partner provides and there are also sometimes issues around transpires in the accountability and the democratic participation especially in conditions where a public authority could negotiate the terms of the PPP with private investors behind closed doors sometimes because of the commercial nature of these contracts it could be claimed the commercial confidentiality and so not all details could be disclosed to the public and so there are a number of issues also concerning these aspects of PPPs and sometimes these have been discussed quite openly so here I just take the cover page of a pamphlet report from a jubilee debt campaign arguing around the PPP business as they put it concerning the experience of PPP in the UK where the experience has been mixed I'd say to some extent some PPPs like the one of the London Underground did not work the government had to basically eventually a number of other PPP schemes like for constructing schools for instance were terminated earlier than expected on the other hand I said earlier PPP provided a convenient convenient way to fuel private finance into development projects and so therefore could be welcome in that respect although here we should embark into a more technical conversation around the way in which PPPs are reported especially the extent to which a cruel accounting as it is adopted in the UK public sector requires more transparency and disclosure of PPPs then it is typically done if you just follow the traditional national statistics way of reporting and so conditions attached for instance to the stream of subsidies promised to the PPP scheme into the future all the conditions guarantees and exposure to risk for the public sector all these turn into disclosure which is properly done if you follow in a cruel accounting IFRS system as as the public sector in the UK does but which may not grant typically do not grant full disclosure in the system of national accounts and therefore PPP could be could have been used in the past to generate a sort of fiscal illusion that there is a less depth in the public sector than actually tease when they embark into PPP projects okay then here I feel like I want also to to spare a few moments a few minutes finally to share with you ideas concerning how we can improve our theorizing around the PPPs by embarking into what is being called a relational approach before we move to the final stage of the presentation let me take a question which popped up here from Malik how can we prioritize public private partnership over privatization what benefit could achieve within the political corruption financial risk to safeguard the state interest as a primary owner that's a very controversial issue Malik so the borderline between PPPs and privatization is a bit blurred first as said depending on the PPP scheme by and large practically we see that a PPP has quite an important role granted to the private partner to decide the strategically set of the orientation of the PPP they expect a return to their investment all the construction and the operation is practically contracted out to construct construction firms to concessionaire or for providing services so to the eyes of the public I'd say by and large PPPs may just look like another form of privatization so like a kind of a privatization in this eyes to some extent and probably tease or actually some people the most critical people who argue it is even worse than that in the sense that privatization all the all the risk is really on the private entity which took ownership and control of a privatized infrastructure ourselves and therefore they are there to stand the risk if revenue is not as expected they stand there to be blamed by the public if service is not as expected and so on in the hybrid regime with the presence of a public public authority they can actually provide as I said the sources of guarantees and the coverage to risk to the benefit of the private of the private actor so it's a it's like a game if you like to play in between let's say we may figure out an extremely naive public sector entity or authority to embark in such a contract to provide all this safe that to the private to the private panel on hand an argument has been made a private investor would never enter a PPP scheme if they do not have assurance that the the shoulders are colored in a sense if anything goes goes wrong so I believe it's pretty much open to the negotiation table that's an argument I want to make also out of this relational approach to PPP I can't say anything right or wrong concerning the scheme by self I typically tend to conceive it as pretty much an arena which is open to the negotiation between the parties and depending on the circumstances which they face would they may play the game in a more advantages advantages way or not however your question also poses in case another broad issue which is the one around the political stakes and corruption around the PPPs and you know anytime I talk students around the PFM generally public financial management and we talk about PPP typically we share the idea the big elephant in the room is like corruption so the possibility of misappropriation of public funds which are diverted to the benefit of the few including possibly some forms of collusion between public authorities and private and private partners an important role and principle and actually hopefully in practice is played by auditing institutions so auditors within the public sector entities specifically for the project and the supreme audit institutions in countries like national audit office in the UK for instance they typically play an important role to scrutinize PPP arrangements and to feed to the parliament and to the public their appraisal around the PPP schemes if I make if I may make a small digression that that's actually what basically broadly happened also in the UK where to some extent the treasury endorsed a way of supporting PPPs for a certain time where actually we did not really have a full disclosure of the extent to which the government was subjected to liabilities for the PPPs which were under and the position instead we see from the documents of the national audit office instead was one fairly critical but instead PPPs in the UK should have been reported more fully to give disclosure of exposure to risk and liabilities to the government otherwise this could result in a fiscal illusion to underestimate for instance liabilities of the public sector okay and the debate if you like went on for another years and to some extent as you may know as a couple of years ago 2018 the UK government announced they were going to terminate the experience of private finance initiative which was called the pf2 at the time because of some changes in the legislation which had taken place there could have been various reasons for these but probably personally I believe that the idea that PPP would be reported more transparently in order to to provide evidence of the exposure to risk and liabilities to the public by following IFRS public sector accounting standards in the UK could have played also a role in the decision to to not to pursue PPPs in the same way anymore so thank you for the question Malik provides a good good food for thought and sorry for the for the long digression if you have any other question please feel free to to type there in the chat as I just finish a few a few more slides oh thank you another comment from Paul so the point on transparency and the accountability is very important I wonder how to develop a mutual and solid accountability mechanism to follow up the financial scheme sometimes public sector mostly in some countries in Africa do not have solid compliance mechanisms to follow the funding is there any plan in terms of PPP to develop solid tools for the public sector so then my answer be there is being awareness especially from the side of donor institutions international institutions who are bank AMF and others other regional banks nowadays of course that PPPs and development support is not just about the physical infrastructure and about money to build it up and to make it run so the idea that there is a component part of broadly called the capacity building must be there with the PPP projects and under the under the broad level of capacity building there is the one concerning building up the infrastructure which is the legal institutional one which is one concerning the skills of voters one concerns the tools in order to make auditing work effective there is also another component part of the discourse which is a greater role for participatory institutions and stand to meet a full disclosure to the public I could help to raise awareness of how public money is committed to PPPs so this is my general take Paul there is alongside the purely financial scheme to build anything and to make it run also alongside capacity building program typically which has to do with improving institutions and improving the capacity of the institutions in order to perform adequate work on auditing which relates to the sound working of accountability and transparency and mechanism the road could be quite bumpy just to make an instance as said earlier the use of a cruel accounting does help technically in terms of reporting exposure to risk and liabilities in PPP schemes definitely you can get these through a cruel accounting rather than cash accounting system of national statistics accounts but before you get that you have to install to install a cruel accounting in the public sector or definitely to make a cruel accounting applied to ventures where the public sector participates like PPPs for instance and it's an entire venue by itself so in the last 20 plus years a number of countries in the world introduced a cruel accounting in the public sector but a number of countries are still along the way to do it and there is pretty much a checkered with some countries having done it others they do not but definitely this is just an instance of the technical work institutional work which needs to be done you know the way of the tools in order to provide the proper accountability and transparency mechanism okay so thank you for the question feel free to type more or to ask me if you wanted to share any idea for the microphone from your side yeah can I can I share some ideas I'm sorry this is Peter St Paul thank you yes sure okay thank you yeah I'm from Haiti and I am in Mali and I'm working as a bat machine officer and this is and it's it's for me an interesting subject and also I think that on approach 2021 I will be yeah I will be joining the source university of London so yeah so I'm I'm managing a great 10 million dollars project funded by by the foundation a US foundation but in a perspective too so so I'm working for an international organization so this the fund passes by this organization and to work with the civil society organization and the public sector in Mali and my role is to build the capacity of the public sector or institutional actors so three years after or four years after so they can receive directly this funding from this US foundation and this is and this is why I asked the question about you know about all the compliance mechanism transparency and accountability because the great risk that the US foundation as and the staging right now is okay three years after or four years after two does the institutional actors will be able to will they be able to to to justify the the expenditures to I don't know two so will be will they be able to build a kind of tools or mechanisms so they can justify all the expenditures so you know um so this relation between the private sector or between the yeah the private sector and the governments sometimes it's a bit problematic and and I wonder how what what is what because this is a great challenge for me and what is my room and how I can help them handle the situation the private foundation and also the the institutional actors so that was it's a it's a general question so I mean you don't need to answer but it was for me I just wanted to share this insight based on my experience thank thank you very much Paul that's very interesting and I believe this could also provoke some for the curiosity or thought from the side of the other participants so I may pause for a while to see if anyone else would like to add anything possibly from your experience if you also work in public sector or around the PPP projects yourselves I can see them in while just to share with everyone this is from Malik thank you for healthy discussion normally the private sector holds independent operational authority with minimum contributory share depriving the public sector even to regulate so what mechanism is to devise to issue transparency and accuracy of the book of accounts for the assessment of public share in the profit if I may just comment on all these these contributions you clearly and appropriately frame the issue of the balance of on the one hand the delegation which takes place many functions to a private operator so especially as we know typically DC SPV for instance could be dominated practically by the private operator in many operational decisions which are made and therefore how this can be properly set to regulation and auditing these are the two keywords which come to mind the regulation on the one hand and auditing regulation in the extent to which what the operator does in any case is typically the provision of a public service a service of public interest so in principle although there is a public authority already involved in a PPP scheme when it comes to the front end in terms of delivering services to the public still regulation coming to play quite conveniently so the idea that there are standards of service there are time by which a service should be delivered consistently consistency over time scrutiny in terms of suspension of services and system of penalties in the case so there is an entire infrastructure of regulation if you like metaphorically to be built up around the end side of the of the project in order to ensure that there is pressure on the side of the quality on the other hand the other main function which comes to to my mind again is the one of auditing the role of internal authors the independence of auditors on the top of these which can ensure a way of providing justification sound justification for expenses let me just share other comments so from Luca thank you for your presentation PPPs can best work in developed countries where the system is well set how best can PPPs be used in less developed countries where there is lack of accountability corruption and lack of adequate system in place and another line I would appreciate to contribute thought audio as I raise my hand for a little while yes thank you Cilly I noticed your your hand late when I was too involved into finishing a line of thought and then to to share this this exchange with with Paul uh Cilly please apologize if I do not pronounce it correctly uh do you have the audio in order to say anything oh yes yes oh thank you thank you professor for the opportunity I can just hear the Italian accent okay sorry for this my name is Cilizzi Minyai I'm a member of parliament in the Republic of South Africa you are your graph best described uh South African situation in 2010 during our FIFA World Cup where the development of the infrastructure such as uh howting the ebony rail network uh as well as the e-tall uh which is the ebony road expansion in howting and as well as the stadia and so on so but what I want to raise is that uh this infrastructure especially the the ebony rail network came up with some challenges such as the price collusion which in a way we can describe it as a corruption so how do we what is the best way of uh mechanism in a triple p uh projects large-scale project to manage corruptions uh the question that comes to my mind is that where was uh monitoring mechanism during constructions and to some degree in final analysis in my view you know the uh triple p is the most abuse term across the globe precisely because it comes with for instance it's as it's attempt to also assist the uh the uh project the market failures where the big corporate sector c is an opportunity in which they can get uh uh work opportunities uh of course through the best mechanism of triple p's uh but the challenges in south africa has been there of uh the cold state capture or corruption so any any any advice that may give proof in this context thank you very much thank you thank you very much for sharing this input about south africa it relates also to the previous comment which which read and as i said earlier i share your concern the rate of corruption mismanagement misappropriation of funds is is always there and such deals and i'd say it becomes apparent whenever let's let me bring a further component into the picture where i i believe there could be a working independent press in media which can help to bring to the fore to to share to the public cases which are um suspect or definitely which are demonstrated to some extent where corruption practices take place or in any case when the the scheme apparently may not really work to the advantage of the public let me also say that of course i'm pretty much aware is working at source of certain issues which arise from uh of developing countries where the legal infrastructure and many other sort of political and social conditions are particularly adverse when dealing with with corruption but i i should say as you may well know that dubious practices let's let me put it this way are not too alien also in more developed developed countries so issues concerning two generals tariff increase for instance which are allowed to private partners or acceptor service concessionaires are ever present also in in developed countries as uh thank you the participants spotted my metalian accent perennial debate which goes out in Italy for instance is around the return to investment that highway concessionaires get and so if you consider network built up by the the government through public funds eventually uh some time ago um contracted out in in forms of concessions to private operators with expectation they carry out maintenance upgrade work together with tariff charge for highway tolls the result the public is pretty much concerned with these two generals tariff increase which have been systematically granted to these private operators to get billions of of of profit in exchange for like a fairly safe business and which seems to be relatively neglected forms of maintenance you may have heard for instance of a bridge falling down last year last year in Italy so uh you you get the sense of how broad and in scope issues with uh doubts about the appropriateness of such schemes can be can be widespread let me if you like let me share another reflection which can be uh if it does not really work do we have any better alternative because possibly at a very strategic level we may also start from thinking like what do we go for private involvement private sector involvement in the first place is the public sector really so incapable to raise up finances on their in order to construct anything is really so unable to manage a highway or whatever else in house before calling the expertise from from the private sector and if expertise is needed it can't be just purchased hired in different forms than relying you know on the on the stronger private sector control of the infrastructure so probably a move first the very strategic level to explore the range of alternatives for accomplishing the public the public aims that that we bear in mind once the private entity is involved however at present a believer the better responses we have is massive investment on institutions and auditing in order to make it work but it's a broad level of course within institutions for instance there is a lot to be say independent for instance of the parties which negotiate a contractual arrangement with with a private partner for instance there are institutions concerning the rotation of roles the south of the public public party for instance there is a role for independence in setting tariffs or prices or fees attached to the infrastructure so probably we should take much longer than a few minutes basically but i'm very happy if you like to follow up by mail and provide more references to the studies which come to mind to cover to cover these aspects but hopefully i provided some inputs around the direction and thank you very much for for the questions and sure also i'm very happy to share the presentation slides as i said feel free to contact me you find my email on the slides if you want anything more specific to to read in details i take from Alice we had also a line here in the chat thank you for sharing presentation the context of green recovery what do you think that the role of the war bank and other multinational development banks in promoting PPP projects towards achieving low-carbon climate resilient development such unlocking private climate financing for maximizing the of limited public capital well that's very interesting Alice that's exactly what i was reading still yesterday trying to gather more thoughts about this presentation particularly the discourse going on especially as understood in the war bank other regional international banks at present is not to miss the opportunity of the pandemic for how a tragic it has been for and disruptive it has been for the lives of everyone seems close to everyone in the planet nevertheless it provides an opportunity to pose for a while in a sense to review what has been doing and to set away the course to steer the course for the future and definitely as choices have to be made concerning how to restart the projects for instance or where to put money to pass into the future an argument has been made already around but we should therefore that's an opportunity where to pay more attention for different technologies for conversion or different use of infrastructure we already have in order to contribute to one of the biggest concerns which is around which is the one around the climate change i believe more studies will come out in the in the future months concerning the impact of opposing all our industrial artistic activity for a number of months at the global scale and in terms of improvement of biodiversity improvement of quality of the air possibly of water and this could provide a source of evidence that by doing things differently we could get a side benefit which can be tangible then of course i believe that the issue could be there in the interface in between all these concerns and the the finance one whenever we bring private finance into play definitely they are institutionally built in order to expect a return to investment so an issue could be is how to compromise between the this expectation of from the side of private capital whenever involved together with public goals that we want that we want to achieve on the other hand and i believe that there is a room for quite a lot of creative thought in terms of new financial schemes and institutions in order to help reaching out to this compromise okay well i love this argument i could spend as well a quite a lot of time talking about it and hopefully more in person depending on the environment we are confined in these in these days well we have just about 10 minutes left if that's fine i would not get i would not get too much into theory but just to give the idea of the rest of the of the presentation a few more thoughts concerning ppp's i scale a little bit more to the on the theoretical side if you like theoretical level to share with you some reflections which i'm writing in that book concerning a shift that i can see beneficial in theorizing about ppp's from an instrumental to a more relational approach so what's an instrumental approach that's typically the way in which from economics and finance we think about ppp's which we conceive them basically as they are they are contracts and so as the contracts ideas around the transaction costs when setting up and executing a contract and ideas around the principle and relations relationship which means the asymmetry of interest between parties and the the asymmetry of information between them so one pattern does not really know how well or badly the other one is is performing so all the inclusion of a monitoring system including auditing of course and the inclusion of a building system of mechanisms of incentives in the forms of penalties or rewards that's all the theoretical machinery in the sense of economics and finance when thinking about ppp's so that if you design an appropriate incentive structure basically everything everything will work in terms of money flowing into ppp schemes and infrastructure and service delivered efficiently and cost effectively and therefore return to capital investment to to result out of the scheme so that's however as we know in practice ppp schemes encounter a number of issues or troubles which seem to contradict this set of assumptions and expectations around the mechanism for making ppp ppp work like for instance the actually the incapacity to overcome the asymmetry of information and to really know how well for instance a service is actually run how efficiently how cost effectively and so on and what how money is actually actually used and so on on the other hand i went to sometime ago into a literature concerning an alternative which is broadly referenced as a relational approach as a real as a relational approach is one where we should not limit ourselves to look at relationship just on contractual and financial basis actually any entities could be the public authority the government could be the private entity could be the banks could be the role of a of a donor agencies could be the role of the of the users of services they do actually form a sort of a network or if you like a web of relations the of stations metaphorically makes sense because the an an ancillary idea is the one that anything which goes on in the relationship between the two parties does have effects on the relationship these have also with many other parties so the idea is that rationality comes into play rather than individualism and rationalism what does it mean the relation relation which is built between parties is one which takes an expressive as well as an instrumental form which means the relation builds on the identities of these individuals on their history on the context where they operate including of course the general culture understanding of how things things are done and the relations tend to be maintained over time or they can work to erode other relations somewhere else in in the web all this is unfairly abstract and and this actually originates from this I should pay the intellectual debt coming from international relations and if you like I I would like highlight specifically this this book a Relation Theory of World Politics coming from Yuqing Qin professor on public affairs in China which offers offers this approach actually building intellectually on the confusion thought concerning the extent to which we can benefit from placing any relationship within the broader web so that we do not just see the PPP as a contact between a public entity and the private panel but we conceive more broadly the set of relations which actually have to do with politics so politics generally taken the process of conflict cooperation negotiation on taking decisions about the resources and to be only used the produced and distributed and they take politics to be extremely important it should be more explicitly into the way which we conceive and expect the PPPs to to work and this is actually embedded in part of economic thought so if we take Douglas North for instance working around the role of institutions very interesting works he also did around the role of institutions also including in developing countries or more generally in those scenarios where the web of social relations is such that we have individuals seeking clientelistic ties seeking rent positions to take out of the action of the public sector of the government and rather than ignoring this should play a greater theoretical role if you like they should be put even at the center of the stage like the basic web on the top of which PPP contracts are built so the basic idea if you like like a spider in the web to consider SPVs at the very center or an extended list of relations which include public partner, private partner but as you see also banks, contractors, users, donors but actually all of these parties they interact in different ways so the traditional way the simple way I showed could be the one to think about the funding going into the SPV which could be used to pay contractors then we may have the users to provide the payments which eventually return into the remuneration for the capital capital invested but actually the idea of the web is that a PPP is a is an arena much more complex than these all parties they do actually have a relationship with each other just to think for instance an extended webs of relations where parties they do have a relationship between each other even outside of the very PPP scheme so taking into account that for instance when a bank provides funding to a PPP scheme at the same time the same bank could also play a role in negotiation with a private partner or the same public partner or the contractors for other projects alongside PPP and practically I do not believe all these workers fully separate set arenas there are interlinkages and there are considerations broader considerations in the way in which we cultivate relations between parties which go beyond the just the PPP arena scheme and therefore I believe we need to take into account a broader set of relationship alongside any PPP scheme or contract which in other words they do play an important role if we are to properly understand the context where the PPP takes place and all the various repercussions or implications of choices which are made in the design of the PPP and later on in the actual execution of management PPP scheme I stop here with the slides because of time and those because we got another contribution from the participant Schliszi Munai the COVID-19 pandemic brought the unintended consequences the economy and hospital collapsed in this context COVID-19 presented a threat and opportunities to be a new health economy the purpose on our budget around the PPPs in producing in building infrastructure this can contribute to economic growth approach through PPPs in the way to go but thank you very much this is a I believe something to share and I agree that this is kind of a window opportunity I believe a political scientist a scholar of public policy would also put it in order to provide some room for reconsidering for reframing first policy issues to reconsider policy tools for instruments to frame also to the public how the scenario the problem scenario is and ultimately also if you like to negotiate on different basis the way in which infrastructure development is to proceed and if I can just relate this comment to the diagram which is here on the slides if you like the idea is that truly to look beyond any PPP scheme we can't ignore any PPP going to be as if isolated from all the rest which took place in the world and so in the same spirit I believe where a number of PPPs around the world at present could have posed to assess the scope prospect for the advancement into the future it is the time I believe to bring in the big pitch or what is it with we really want to achieve by this infrastructure and which can be the best way in order to to pursue it and all the repercussions choices we make on other programs and projects we may have at the same time including of course the big one concerning a climate change a technical change for instance okay I can see it's 11 a.m. here in a British summer time so probably I should I should stop so let's keep a couple of slides just to leave with a very final final thoughts that I believe further thinking about PPPs and bringing in more considerations into the picture of the very political nature of PPPs and therefore the role of PPP in the broader context which is one of the post-pandemic environment of course for for all of us in the months and years to come I believe these are as important repercussions in the way which we design and we decided to manage PPPs so I really feel to stop here because of not taking more of your time but one final word is of course to thank you for your participation for your questions and hopefully you may find it all these all these interesting and hopefully even more to come if you already are a student with us as a source or you will study with us in the future and to have more occasions to share ideas and search for solutions around these problems good well thank you very much to Malik, Slyzy, Paula for the questions I said earlier feel free to follow up if you like by email if you think it can be helpful or anything otherwise thanks very much have a nice day to all of you thanks bye