What is PPP

PPP APROACH

Public-private partnership. There is no consensus about a single definition of PPP. PPPs are forms of cooperation between public authorities and the private sector that aim to modernise the delivery of infrastructure and strategic public services. In some cases, PPPs involve the financing, design, construction, renovation, management or maintenance of an infrastructure asset; in others, they incorporate the provision of a service traditionally delivered by public institutions. Whilst the principal focus of PPPs should be on promoting efficiency in public services through risk sharing and harnessing private sector expertise, they can also relieve the immediate pressure on public finances by providing an additional source of capital. In turn, public sector participation in a project may offer important safeguards for private investors, in particular the stability of long term cash-flows from public finances, and can incorporate important social or environmental benefits into a project.


PPP BENEFITS

Private sector Public sector
Financial and nonfinancial benefits may accrue to the public sector from implementing the PPP. Financial benefits include: additional capital for new investments; efficient long-term cost management; lower implementation costs. Non-financial benefits include: transfer of new, effective technologies and know-how suplied by the private partner; Enhanced quality of public services and project management, more transparency in the documentation; Higher competitiveness compared to traditional public procurement; Quicker investment completion. Financial and nonfinancial benefits may accrue to the public sector from implementing the PPP. Financial benefits include: additional capital for new investments; efficient long-term cost management; lower implementation costs. Non-financial benefits include: transfer of new, effective technologies and know-how suplied by the private partner; Enhanced quality of public services and project management, more transparency in the documentation; Higher competitiveness compared to traditional public procurement; Quicker investment completion.

LIBRARY

Here you can find all the main documents that have been prepared during the Restaura project. In addition, you can search among some of the main key words and definitions about the PPP carefully selected from all the main documents.

DOCUMENTS


Title Description Type
IBHRP Celovit revitalizacijski načrt stavbne kulturne dediščine na območju mestne občine nova gorica; Pilotni ukrep: Grad Rihemberk .pdf
IBHRP Integrirani plan revitalizacije starogradske jezgre Grada Buzeta .pdf
Legal Framework (Croatia) Country report on the legal framework on Public-Private Partnership (PPP): CROATIA .pdf
Legal Framework (Slovenia) Country report on the legal framework on Public-Private Partnership (PPP): SLOVENIA .pdf
Handbook for Local Authorities Handbook on Public Private Partnership (PPP) in Built Heritage Revitalisation Projects .pdf
Guidebook for Local Authorities (in English) Guidebook for Local Authorities on PPP in Heritage Revitalisation Strategies .pdf
Pilot Leaflet All 4 Restaura Pilot Projects in a Handy Leaflet .pdf
Restaura Communication Strategy The communication strategy (CS) of RESTAURA project under the Interreg CENTRAL EUROPE Programme (Interreg CE) is intended to provide the lead partner (LP) and project partners (PP) with information and guidance needed to properly implement project communication activities. .pdf
IBHRP Zintegrowany Plan Rewitalizacji elementu dziedzictwa kulturowego na obszarze pilotażowym Projektu RESTAURA .pdf
Legal Framework (Poland) Country report on the legal framework on Public-Private Partnership (PPP): POLAND .pdf
Legal Framework (Slovakia) Country report on the legal framework on Public-Private Partnership (PPP): SLOVAKIA .pdf
Guidebook for Local Authorities (in Polish) PPP w strategiach rewitalizacji dziedzictwa kulturowego ― podręcznik dla samorządów terytorialnych .pdf
Guidebook for Local Authorities (in Croatian) Vodič za lokalne vlasti o javnoprivatnom partnerstvu u strategijama upravljanja kulturnom baštinom .pdf
Guidebook for Local Authorities (in Slovene) Priročnik za lokalne skupnosti o javno-zasebnem partnerstvu glede strategij za revitalizacijo kulturne dediščine .pdf
Guidebook for Local Authorities (in Slovak) Príručka pre miestne autority v PPP projektoch v stratégiách rozvoja dedičstva .pdf
Workshop TUTORIAL (Guide; EN) The document brings a guide about organizing workshop focused on revitalisation of cultural heritage by PPP. .pdf
Materijali - radionice Ovaj dokument predstavlja temelj za organizaciju radionica o javno-privatnom partnerstvu u obnovi objekata kulturne baštine. U njemu se obrađuju ključne faze pripreme radionica. .docx
Projekti JPP-a u Hrvatskoj Projekti JPP-a u Hrvatskoj (Domagoj Dodik) Dok
PRIMJER POTPISNE LISTE za radionice PRIMJER POTPISNE LISTE za radionice .docx
Primjer upitnika za radionice Primjer upitnika za radionice .docx
SID Banka (EFSI) Predstavitev naložbenega načrta za Evropo (SID banka) Dok
IJZP Javno zasebno partnerstvo Pedstavitev značilnosti Javno-zasebnega partnerstva Dok
Osnovna shema Spletnega orodja (FPV) Predstavitev osnovne funkcionalnosti in uporabniških zahtev spletnega orodja (FPV) Dok
Vprašalnik o zadovoljstvu Primer vprašalnika o zadovoljstvu udeležencev z izvedbo delavnice .docx
Workshops: External Evaluation External Evaluation of Workshops .pdf
Item Description
Handbook on PPP A complete tutorial about PPP with a focus on cultural heritage. It covers legal, financial, institutional, and operational issues about the PPP. A complete English version of the Handbook is available in our online Library free of charge and its main features are linked with the search engine provided within the web-tool.
Helpdesk (help, support) A facility to offer advice about PPP in cultural heritage projects. Helpdesk is available in all four project member states: Croatia, Poland, Slovakia and Slovenia in local languages as well as in English. It is offered via the web-based tool as a direct mailing or via contacts provided on the Restaura web page (https://www.interreg-central.eu/Content.Node/RESTAURA.html).
Web-tool A facility to offer advice about PPP in cultural heritage projects. Helpdesk is available in all four project member states: Croatia, Poland, Slovakia and Slovenia in local languages as well as in English. It is offered via the web-based tool as a direct mailing or via contacts provided on the Restaura web page (https://www.interreg-central.eu/Content.Node/RESTAURA.html).
PPP Review A retrospective (ex-post) evaluation of the PPP project. It serves to improve future decisions about PPP projects. Usually, an independent reviewing body (a public body or a consulting firm) is engaged to do the job. The analytical framework of such a document will focus on identifying both the benefits derived from project outputs and the cost of delivering those outputs, but also on qualitative data such as service quality, contract design and risk allocation.
Open Procedure A.) Possibility to limit number of bidders: No prequalification or pre-selection is permitted. Any interested company may submit a bid. B.) Discussions during process: The specifications may not be changed during the bidding process, and no negotiations or dialogue may take place with bidders. Clarification is permitted. C.) Discussions after final bid is submitted: No scope for negotiations with a bidder after bids are submitted. D.) Basis for award: Lowest price or most economically advantageous tender
Restricted Procedure A.) Possibility to limit number of bidders: The number of bidders may be limited to no less than five in accordance with criteria specified in contract notice (prequalification and shortlisting permitted). B.) The specifications may not be changed during the bidding process, and no negotiations or dialogue may take place with bidders. Clarification is permitted. C.) Discussions after final bid is submitted: No scope for negotiations with a bidder after bids are submitted. D.) Basis for award: Lowest price or most economically advantageous tender
Competitive Procedure A.) Possibility to limit number of bidders: The number of bidders may be limited to no less than three in accordance with criteria specified in contract notice (prequalification and shortlisting permitted). B.) Discussions during process: Dialogue with bidders permitted on all aspects (similar to negotiated procedure, including further short-listing). When dialogue is concluded, final complete bids must be requested based on the solution(s) presented during the dialogue phase. C.) Discussions after final bid is submitted: Only permitted to clarify, fine tune or specify a bid. No changes permitted to basic features. D.) Basis for award: Most economically advantageous tender.
Negotiated Peocedure A.) Possibility to limit number of bidders: The number of bidders may be limited to no less than three in accordance with criteria specified in contract notice (prequalification and shortlisting permitted). B.) Discussions during process: Negotiations permitted throughout process. Successive stages can be used to reduce the number of bidders (further short-listing). C.) Discussions after final bid is submitted: Not relevant because the negotiations can continue until the contract is agreed. There need be no “final bid” per se. D.) Basis for award: Lowest price or most economically advantageous tender.
PPP Implementation After the conclusion of the PPP contract, a contract management team (separated from the project management team) has to be established by the public procuring authority. The contract management team has to develop management tools and processes (contingency plans) and perform day-to-day contract management activities. Timeframes and responsibilities have to be determined. The development of a contract management manual is recommended. If the contractual disputes occur, common dispute resolution mechanisms are used: litigation, arbitration, expert determination of some kind, mediation or conciliation and decision by a relevant regulatory body. Effective relationship management in the project assists the process of resolution of disputes
PPP Risk (risk allocation) As a rule, risk is allocated to the partner that is better prepared to manage it. Different combinations of the following types of risks can arise in PPP: Revenue risk; Construction risk; Foreign exchange risk; Regulatory/contractual risk; Political risk; Environmental/archeological risk; Latent defect risk; Public acceptance risk; Sustainability risk.
Buy-Conserve-Operate (BCO) BCO is the closest to privatization. In this model, the private or third sector partner buys the heritage asset in a single transaction or gradually. There are usually strict requirements regarding e.g. easements or maintenance standards. Also, the government protects the heritage asset, regulates standards of conservation and maintenance.
Comparator Tool Comparators are analytical tools that optimize PPP model selection process, determination of its financial and economic profitability and comparison of PPP variant(s) with a traditional model. There are no commonly acknowledged comparator methodologies in the EU: Public-Private-Scan, Public-Private-Comparator, Public-Sector-Comparator.
Institutional PPP Cooperation between public and private sector takes place within a specific entity: a special purpose vehicle, SPV. Mutual rights and obligations are secured by the entity’s statutes and by an agreement between shareholders, i.e. public and private actors. In both arrangements, management of traditional public sector obligations is delegated to the private sector, and the whole enterprise is regulated by the contract.
PPP Legal Framework Croatia: A.) PPP Act: YES; A1) Institutional PPP model: YES; A2) Contractual PPP model: YES; A3) Service based model: YES; A4) Availability based model: YES; A5) Government PPP policy strategy: YES; A6) PPP project pipeline approved by Government: NO; Poland: A.) PPP Act: YES; A1) Institutional PPP model: YES; A2) Contractual PPP model: YES; A3) Service based model: YES; A4) Availability based model: YES; A5) Government PPP policy strategy: NO; A6) PPP project pipeline approved by Government: NO; Slovakia: A.) PPP Act: NO; A1) Institutional PPP model: NO; A2) Contractual PPP model: YES; A3) Service based model: YES; A4) Availability based model: YES; A5) Government PPP policy strategy: NO; A6) PPP project pipeline approved by Government: NO; Slovenia: A.) PPP Act: YES; A1) Institutional PPP model: YES; A2) Contractual PPP model: YES; A3) Service based model: YES; A4) Availability based model: YES; A5) Government PPP policy strategy: NO; A6) PPP project pipeline approved by Government: NO.
Institutional Framework Croatia: A.) PPP Regulatory Body: YES; B) Public body responsible for fiscal risk issues: Ministry of finance; C) PPP promotor: AIC; D) PPP project proposal (application): Public body only; Poland: A.) PPP Regulatory Body: NO; B) Public body responsible for fiscal risk issues: Ministry of finance; C) PPP promotor: PPP Institute; D) PPP project proposal (application): Public body only; Slovakia: A.) PPP Regulatory Body: NO; B) Public body responsible for fiscal risk issues: Ministry of finance; C) PPP promotor: PPP Association; D) PPP project proposal (application): Public body only; Slovenia: A.) PPP Regulatory Body: YES; B) Public body responsible for fiscal risk issues: Ministry of finance; C) PPP promotor: PPP Institute; D) PPP project proposal (application): Public body only.
Funding Mechanisms Croatia: A.) State Budget: YES; B) EU Funds: YES; C) National Investment Bank PPP Program: YES; D) Project Bonds: NO; E) Commercial Banks: YES; Poland: A.) State Budget: YES; B) EU Funds: YES; C) National Investment Bank PPP Program: NO; D) Project Bonds: YES; E) Commercial Banks: YES; Slovakia: A.) State Budget: YES; B) EU Funds: YES; C) National Investment Bank PPP Program: YES; D) Project Bonds: YES; E) Commercial Banks: YES; Slovenia: A.) State Budget: YES; B) EU Funds: NO; C) National Investment Bank PPP Program: NO; D) Project Bonds: NO; E) Commercial Banks: YES.
PPP Benefits (public sector) Financial and nonfinancial benefits may accrue to the public sector from implementing the PPP. Financial benefits include: additional capital for new investments; efficient long-term cost management; lower implementation costs. Non-financial benefits include: transfer of new, effective technologies and know-how suplied by the private partner; Enhanced quality of public services and project management, more transparency in the documentation; Higher competitiveness compared to traditional public procurement; Quicker investment completion.
PPP Benefits (private sector) Financial and nonfinancial benefits may accrue to the public sector from implementing the PPP. Financial benefits include: additional capital for new investments; efficient long-term cost management; lower implementation costs. Non-financial benefits include: transfer of new, effective technologies and know-how suplied by the private partner; Enhanced quality of public services and project management, more transparency in the documentation; Higher competitiveness compared to traditional public procurement; Quicker investment completion.
EUROSTAT Treatment Has the issue of the “balance sheet treatment” of the project (i.e. the classification of the project as a public sector investment for the purposes of national debt and deficit under the “excessive deficit procedure” of the Maastricht Treaty) been considered (EPEC PPP Guide 2015)?
Lease-Develop-Operate (LDO) In case of the Lease-Develop-Operate model, the private partner leases the public facility, develops and improves it technologically and functionally, as well as operates it. The public partner retains ownership of the facility and receives payments according to the lease agreement. This model is usually used in development of airport facilities.
Build-Lease-Operate-Transfer (BLOT) In the Build-Lease-Operate-Transfer model, the private partner builds and leases a facility, while its ownership remains with the public partner. The private partner provides services and upon expiration of the agreement, the ownership of the facility is returned to the public partner.
Buy-Build-Operate (BBO) In the Buy-Build-Operate model, the private partner buys the public facility under the contract that the assets are to be upgraded and operated for a specified period of time. The private partner also provides services to the public partner and/or end users. By expiration of the term, the private partner retains ownership over the public asset.
Design-Build-Finance-Operate (DBFO) In the Design-Build-Finance-Operate model, the private partner designs, builds, and finances a new public facility under a long-term lease. During the lease period, the private partner operates the facility and upon expiration, the facility is transferred to the public partner.
Design-Build-Maintain (DBM) In the Design-Build-Maintain model, the private partner designs, builds, and maintains the infrastructure in accordance to the specifications and requirements of the public partner. The price is usually pre-agreed and fixed, so the risk and cost of quality assurance and maintenance of the constructed facility is on the private partner. The public entity owns and operates the assets.
Finance Only (FO) In the Finance Only partnerships, the project is funded directly by the private partner or through long-term leases or bonds. For example in Italy, one of the ways of funding private and government conservation projects is a special bank scheme. A bank can finance a conservation project of a listed building, monument, or artwork in return for tax breaks, reduced tax exposure, publicity, or statutory requirements. Other arrangements include straightforward funding of conservation projects, where the organization provides not only funding, but also expertise or other kinds of technical capabilities.
Design-Build-Operate (DBO) In this model, the private partner designs and builds a public property according to the requirements and specifications of the public partner and at a fixed price. The public entity bears financing and costs. Once the construction is completed, the private partner takes the property in a long-term lease to provide service.
Build-Own-Operate-Transfer (BOOT) In this model, the private partner designs, builds, finances, and operates the public facility, while retaining its ownership under the franchise given by the public entity. The private partner charges fees to the public entity and/or end users for the provided services. At the end of the franchise period, the ownership of the facility is transferred back to the public partner without compensation to the private partner.
Design-Build-Finance-Own-Operate-Transfer (DBFOOT) In this model, the private partner designs, develops, builds, and finances the implementation of a public project. The private partner provides the services and uses the facility, which is his property, for a certain period of time. By expiration of that period, the ownership is transferred to the public partner without compensation.
Operate-Maintain (OM) In this model, the public entity signs a contract with the private partner to provide or maintain a service through the public facility. The ownership of the asset remains with the public entity. Sometimes this model is referred to as an outsourcing contract.
Design-Bid-Build (DBB) In this model, the public partner defines the requirements for the project, ensures its financing and design. The procurement procedure is used to select a private bidder, responsible for the construction. The public partner is the owner of a newly constructed facility and provides its service and maintenance.
Conserve-Operate-Transfer (COT) In this PPP model, the private or third sector partner is responsible for conservation, operation, and management of a historic asset through a long-term lease. The public entity is highly involved in the project's development and design in order to ensure that the historic building is available to the public. The private partner is under control and regulations regarding maintenance of the building's cultural significance. All alterations must be approved by the public partner. The ownership of the historic building will be returned to the public entity when the lease expires.
IBHRP Integrated Build Heritage Revitalisation Plan
JASPERS (EU Funds) JASPERS (Joint Assistance to Support Projects in European Regions) assists EU member states with project preparation and capacity building support, as well as independent quality review. JASPERS' free assistance is available for the development of all categories of projects assisted by European Structural and Investment Funds (ESIF). However, JASPERS advisory and capacity building assistance priority are major projects in the current 19 beneficiary EU Member States (Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, France, Ireland, Italy, Greece, Latvia, Lithuania, Hungary, Malta, Poland, Romania, Slovenia, Slovakia, and Spain), as well as candidate countries.
Financial Agreements PPP contract may be signed without financing agreements. They often involve many cross-references and should be prepared as a coherent package but typically entail: senior loan agreements setting out the rights and obligations of each party regarding the senior debt; a common terms agreement clarifying the multi-sourcing of finance for a PPP project; subordinated loan agreements provided by the project sponsors and/or by third party investors; a shareholders’ agreement; a direct agreement between the lenders and the public procurement authority allowing the senior lenders to take over the project under certain circumstances; an accounts agreement involving a bank which will control the cash flowing to and from the PPP Company in accordance with the rules set out in the agreement; an inter-creditor agreement; hedging agreements enabling to fix the interest rate on all or part of the debt or to limit its exposure to exchange rate risks; security agreements (e.g. share pledge, charge over accounts, movables pledge, receivables pledge); parent company guarantees and other forms of credit enhancement; and legal opinions defining the enforceability of the contracts.
PPP Contract PPP contract, generally, should cover the following: the rights and obligations of the parties; risk allocation; service performance standards and targets (need to be objective and measurable); the procedure for permitted modifications, as well as their scope and nature; payment mechanisms (e.g. tariffs, subsidies, grants) and adjustments to payments in response to various contingencies; penalties (eventually leading to termination of the PPP contract); security and performance bonds; project insurances; the term of the PPP contract; the conditions for termination and compensation upon termination; step-in rights; the definition and impact of force majeure and changes in law; and the dispute resolution procedure. After the selection of the preferred bidder, the PPP contract can be finalised. Some final adjustments to the PPP contract should be limited to clarifications and confirmation of commitments. Negotiations may include issues on the timetable, definition of remaining issues, and recording matters already agreed or settled.
Hybrid Funds PPPs combined with EU funding are termed hybrid. Such approach allows for implementation of projects of public interest which are economically justified, but unable to meet the total costs solely with revenues from end-users or fees.
Tender Preparation Phase Preparation phase includes finalisation before launching the tender and refers to: further studies which are advised to be completed, preparation of the PPP arrangement, selection of the procurement method, defining the bid evaluation criteria, and preparation of the draft PPP contract.
Procurement Procurement process starts with the publication of the procurement notice. This is also called the bidding process and is divided in four steps: Procurement notice, prequalification and shortlisting; Invitation to tender; Interaction with the bidders; Evaluation of tenders and preferred bidder selection.
PPP Public-private partnership. There is no consensus about a single definition of PPP. PPPs are forms of cooperation between public authorities and the private sector that aim to modernise the delivery of infrastructure and strategic public services. In some cases, PPPs involve the financing, design, construction, renovation, management or maintenance of an infrastructure asset; in others, they incorporate the provision of a service traditionally delivered by public institutions. Whilst the principal focus of PPPs should be on promoting efficiency in public services through risk sharing and harnessing private sector expertise, they can also relieve the immediate pressure on public finances by providing an additional source of capital. In turn, public sector participation in a project may offer important safeguards for private investors, in particular the stability of long term cash-flows from public finances, and can incorporate important social or environmental benefits into a project.
Restaura RESTAURA project is aiming at identifying, testing, evaluating and promoting good practice on the use of Public-Private Partnerships (PPP) for the revitalisation of historical cities and buildings. Until now, there have only been a few examples of PPP used in revitalisation projects within Europe, RESTAURA’s aim is to promote a real change for the better in the use of PPP across Central Europe (innovation). The outputs of RESTAURA project are: Clear strategies and action plans, Access to existing tools, and the development of new ones, Support for pilot actions and the provision of workshops for public authorities who aim to use PPP models to renovate and bring a new life to abandoned and deteriorated historic buildings.
Urban Development Strategic urban development planning generally gives answers to four key questions: Where are we now? Where do we want to be? How do we get where we want to be? How will we measure progress on the path to the desired vision?
Project Board Such a board or steering committee usually consists of representatives of the public sector, coordinated by a senior officer. At the same time, a project management team needs to be established whose responsibility is the every-day management of the heritage revitalisation PPP project. It is necessary to appoint a project director whose full-time job is managing the project during the procurement phase.
Bidding Committee The bidding committee selects the criteria for scoring bids and runs the bidding process.
Bidding Criteria The criteria may vary but must be specified in advance. They may include i.e. the largest payment of the public procurement authority, the lowest service fee, the highest performance, the shortest duration of the PPP contract, etc. However, the broad aim of the EU procurement regime is to select the 'most economically advantageous tender'.
EU Funds The European Structural Investment Funds (ESIF), in particular the European Regional Development Fund (which covers e.g. regeneration of brownfield sites) and the Cohesion Fund
Financial Analysis The financial analysis should consider relevant macroeconomic assumptions justified for the project, as well as benefits, expenses and burdens resulting from project implementation. An important element of the financial analysis is determining sources of financing for the project.
Guidebook for Local Authorities The Guidebook for Local Authorities on PPP in heritage revitalisation strategies offers local authorities guidelines for preparing and implementing Integrated Built Heritage Revitalisation Plans (IBHRPs) including principles and procedures to accelerate revitalisation with the use of public-private partnerships (PPP) in a step-by-step fashion with all the main procedures necessary for heritage revitalisation based on PPP.
Investment Memorandum The investment memorandum determines expectations of the public entity towards potential private partners in a specific project. The memorandum is a description of the PPP project in the form selected by the public entity, but also an investment offer addressed at a private partner as an entity oriented to profit from their activities.
Project Plan The main task of the project management team is to develop a project plan together with the timetable for the project preparation and procurement. This includes the development of the document with the consultation of stakeholders, the bidding process, private partner engagement and the approval process. It is advised to use the ‘Gantt’ chart since it defines a clear view of all phases and their assigned periods.
Operational-Licence (OL) The Operational License model is when the private or third sector partner provides a service under the contract or license to the heritage asset for a fixed term. The public entity keeps the ownership over the heritage site.In the Operation License model, the public entity grants a license to the private entity to provide public service, usually with limited duration. This model is frequently used in IT projects.
Contractual PPP The partnership between public and private sector is based only on a contract. In this type of arrangement, the private sector assumes responsibility for designing, building, and managing the facility. The private partner also manages the project finances, sometimes with contributions from the government.
Negotiations The private partner’s remuneration and the contribution of the public party are agreed individually for each PPP enterprise. During the negotiation, a design (outline) of the contract and a plan (schedule) of forwarding tasks to the private partner are created. The process is completed after technical, economic and legal negotiations with preparation of the final version of the contract and an offer form to submit a cooperation offer.
Legal Analysis The purpose of the legal analysis of a project is to check admissibility of its implementation pursuant to the national (and EU) regulations and to indicate legal matters significant for the project’s success. The legal analysis of the revitalisation PPP project should include: description of the project phases and preparatory activities of the public entity; determination of administrative decisions and other documents, opinions, significant matters related to the process, considering among others protection of cultural heritage; detailed description of the private partner selection procedure; management of the public assets by the private partner during the project implementation and (potentially) the principles of taking over the elements of assets after the project completion, with recommendations on securing interests of the public entity; public aid which may occur within the project implementation and the impact of the project on public debt; EU financing (optionally); action plan necessary for PPP implementation.
Technical Analysis The result of the technical analyses will be used to establish the planned costs of design and construction works, to prepare the quotation, analyses, and offers submitted by the participants of the proceedings. The technical analysis should include: examining the current land development status, indicating e.g. the need to remove existing facilities or the possibility to use the existing infrastructure; the suggested scope of the investment: implementation of the public services and the additional commercial tasks; suggested land development and technological solutions as well as assessment of the technical conditions of the real estate and capacities of the public entity to manage properties for the needs of the investment.
Risk Analysis The risk analysis assesses project feasibility. In the Guidelines, risk is determined as any factor, event or impact which threatens the beneficial completion of the project in the context of time, costs or quality. The key PPP principle is that risk should be transferred to the party which can deal with it better, i.e. will be more effective concerning costs.
Economic Analysis To assess economic performance of project implementation within the PPP model, relevant comparators are used.
Build-Operate-Transfer (BOT) Under the Build-Operate-Transfer model, the private partner builds and finances the construction of the public facility and uses it to provide service under control of the public entity. The private partner uses the facility under the long-term lease/concession and upon the expiration of the lease, the facility is transferred back to the public partner.
Build-Own-Operate (BOO) Under the Build-Own-Operate (BOO) model, the private partner builds and manages the public property in their ownership without obligation to transfer the assets to the public partner. The public partner regulates and controls services provided by the private partner.
Buy-Own-Operate-Transfer (BUYOOT) Under the Buy-Own-Operate-Transfer model, the private partner buys public facility, uses it for a certain period of time and provides the service. Upon expiration of the agreement, the facility is transferred to the public partner without charge.
Risk Allocation What are the risks in the project? If the risks exist, how they can be managed?
Conserve-Build-Finance-Operate (CBFO) Within this model, the private partner is responsible for conservation of the historic buildings, construction or addition of new buildings or structures, and complete financing and operation of the project under a long-term lease. This form of partnership is particularly applicable for projects of larger scale, where it covers groups of buildings or buildings which are in need of major renovations. The partnership may involve a Special Purpose Vehicle (SPV).
Public Authority (public sector, authorities) According to the INSPIRE Registry public authority is (a) any government or other public administration, including public advisory bodies, at national, regional or local level;(b) any natural or legal person performing public administrative functions under national law, including specific duties.
PPP Threats Fears around PPP can obstruct popularization of PPP in many European countries, alongside insufficient knowledge or experience on the subject. The most frequent concerns detected through the RESTAURA questionnaire are as follows: Corruption and law infringements; Privatization; High costs; Prolonged procedures; Unresolved ownership; Other Issues (Loss of control on the services provided by the public entity; Excessive increase of contributions/fees paid to the private actor by the customers; B95Monopoly for services provided by the private actor; Decrease of quality of service under PPP scheme; Poor preparation for PPP implementation; Little experience of the private entities in management of the asset after the construction/renovation phase; Difficulties of the public entities to express their needs as regards scope of works, quality of service, Unfavourable conditions for PPP development; Poor legal framework; Political instability)
Value for Money A heritage revitalisation project results are considered as value for money if ends in a net positive gain to society which is greater than if other procurement routes have been used. It is advised to perform the cost-benefit analysis in the initial phase of the preparation of a project
Public Procurement (tender, call) Procurement process starts with the publication of the procurement notice. This is also called the bidding process and is divided in four steps: Procurement notice, prequalification and shortlisting; Invitation to tender; Interaction with the bidders; Evaluation of tenders and preferred bidder selection. See also Step 7 of the IBHRP process in the How to Do PPP Section.
PPP Implementation A multistage process of PPP that consists of the following stages: internal preparation, pre-implementation analysis, establishing the partnership, negotiations, and managing the contract.
PPP Policy PPP Policy is a multilayer system of directives, rules, laws, strategies etc. seting goals and guidelines about the implementation of PPP projects. The PPP policy arrangements can substantially differ among countries and/or political environments.
Cultural Heritage A broad definition of cultural heritage describes the cultural heritage as the legacy of physical artifacts and intangible attributes of a group or society that are inherited from past generations, maintained in the present and preserved for the benefit of future generations. Cultural heritage includes tangible culture (such as buildings, monuments, landscapes, books, works of art, and artifacts), intangible culture (such as folklore, traditions, language, and knowledge), and natural heritage (including culturally significant landscapes, and biodiversity). Source: Falser 2015, Cultural Heritage as Civilizing Mission. From Decay to Recovery in Wikipedia, 2018).
Organizational Analysis The scope of the organizational analysis includes business models and management methods assumed within the project. It also defines participants of the PPP project, as apart from the private partner and the public entity other entities are also involved: external (legal, financial and technical) advisors, financing entities, insurers or other contractors and service providers. The main elements of the institutional analysis are: defining participants of the project as well as determining their mutual relations; establishing legal basis for the new structures, e.g. a special purpose company; analysis of the special purpose company establishment with mixed capital.
Build Heritage Protection Authorities Public institutions which are in charge of preservation of cultural heritage. These institutions usually include, but are not limited to: ministry departments, public institutes, public agencies etc.
Integrated Revitalisation The integrated approach to revitalisation includes participatory governance that, among other things, ensures participation of the civil society in the processes of decision making and management, i.e. public management of heritage that covers horizontal and vertical integration, and gradual integration of sustainable aspects into the heritage management. Cultural heritage has valuable development potentials for a number of domains (cultural, economic, social, etc.). It impacts various stakeholder groups. Local inhabitants represent one and perhaps the most important stakeholder group. A successful participatory approach is open to different opinions, discussions, etc. Workshops, consultations, interviews, etc. in the decision-making process are therefore of key importance.
Economic and Social Value Added Social value and added value are two different topics: the key difference between the two is that social value delivers benefits on a wider scale to the local community, whereas added value consists of measurable savings specifically made to benefit the principal stakeholders. In a social value context, to assess community projects or the difference that a particular socially-minded investment is making, it is relevant to ask the question: what difference is the project making compared to an alternative project or what would have happened if the project didn't take place.
Corporate Social Responsibility Many different definitions of Corporate Social Responsibility have been developed with little consensus: a business person may define CSR as a business strategy, an NGO activist may see it as an environmental issue, a government official may see it as voluntary regulation. Disagreement about the definition arises from the disciplinary approach. Source: Sheehy, Benedict, Defining CSR: Problems and Solutions; in Wikipedia 2018.
Quintuple Helix Model The approach to the revitalisation of cultural heritage that represents the collaboration of research and development institutions, entrepreneurship, authorities, civil societies and natural environments of society. In this framework, the necessity of the inclusion of a wide range of experts in the revitalisation process has to be underlined, not only inspectors for monuments and architects, but also experts from the regional development agencies, cultural or research institutions, universities, etc.
Civil Society Civil society is used in the sense of 1) the aggregate of non-governmental organizations and institutions that manifest interests and will of citizens or 2) individuals and organizations in a society which are independent of the government. Sometimes the term civil society is used in the more general sense of "the elements such as freedom of speech, an independent judiciary, etc, that make up a democratic society" (Source: Collins English Dictionary in Wikipedia, 2018).
Regional Development Agency Regional Development Agency usually functions to connect local authorities into a recognisable entity. The main activities of the Agency include the development of relationships between the public and private sector at local, regional, national and international level with the purpose of facilitating development initiatives and regional development, accelerating the process of integral regional development, planning and implementing regional and other development programmes, and acquiring domestic and foreign sources of financing.
PPP Financial Models Different PPP Financial models can be used, depending on a concrete circumstances. Models that are suitable for revitalization include, but are not limited to Lease-Develop-Operate (LDO), Build-Lease-Operate-Transfer (BLOT), Buy-Build-Operate (BBO), Design-Build-Finance-Operate (DBFO), Design-Build-Maintain (DBM), Finance Only (FO), Design-Build-Operate (DBO), Build-Own-Operate-Transfer (BOOT), Design-Build-Finance-Own-Operate-Transfer (DBFOOT), Operate-Maintain (OM), Design-Build-Build (DBB), Conserve-Operate-Transfer (COT), Operational-Licence (OL), Build-Operate-Transfer (BOT), Build-Own-Operate (BOO), Buy-Own-Operate-Transfer (BUYOOT), Conserve-Build-Finance-Operate (CBFO)
ESIF (EU Funds, cohesion funds, ERDF) The European Structural Investment Funds (ESIF), in particular the European Regional Development Fund (which covers e.g. regeneration of brownfield sites) and the Cohesion Fund: https://www.fi-compass.eu/esif/european-structural-and-investment-funds-esif
Financial Incentives (subsidy, grant, tax incentive) Often used financial incentives in the PPP projects in revitalization of cultural heritage are: a one-time subsidy, a grant, tax incentives. These are used to help attract private investment in revitalization projects.
Action Plan Action Plan follows the strategic planning, but it gives more emphasis on how the project area will realise strategic objectives. It also includes reflection on what is to be achieved in the future, but the focus of planning is to find ways to reach the desired future. The process of developing a detailed action plan provides an overview of key activities / heritage revitalization projects / ideas for IBHRP implementation, and it is crucial that all indicators are measurable, realistic and achievable. IBHRP defines how to make the desired changes in the future, and the action plan as the final outcome of the plan has the role of defining the implementation of set projects. Operational programming is the process of developing an action plan that is usually represented by a simple table of the following content: Key activities/projects related to the implementation of a particular priority and strategic goal from the IBHRP; Activity or project implementation actors; Timeframe for implementation; Projections of financial resources and sources of funding; Performance Indicators.
IBHRP Steps Integrated Build Heritage Revitalisation Plan is executed in 10 steps (for descriptions of each step type "Step and its number" in the search engine: for example "Step 10".
Step 1 The first step to be completed in heritage revitalisation strategies based on PPP is to prepare the IBHRP. The first step to be completed in heritage revitalisation strategies based on PPP is to prepare the IBHRP.
Step 2 After the completion of the IBHRP, it is necessary to reach the consensus of the public. Once it is agreed upon, the City Council passes the document.
Step 3 After the completion of the IBHRP, it is necessary to reach the consensus of the public. Once it is agreed upon, the City Council passes the document. After the completion of the IBHRP, it is necessary to reach the consensus of the public. Once it is agreed upon, the City Council passes the document.
Step 4 After the analysis of different delivery options, the priority project for PPP in heritage revitalisation is selected. After the analysis of different delivery options, the priority project for PPP in heritage revitalisation is selected.
Step 5 It is necessary to justify the use of the PPP option for the heritage revitalisation project by analysing its affordability, risk allocation, bankability and value for money analysis. It is necessary to justify the use of the PPP option for the heritage revitalisation project by analysing its affordability, risk allocation, bankability and value for money analysis.
Step 6 In order to prepare and get the approval of the project proposal, it is required to set up the team and governance structure who will develop the project plan and timetable with help of the advisers. They also commission further studies related to the project, prepare the PPP arrangement, and decide on the selection of the procurement method. Then, the bidding committee is formed who defines the bidding criteria. A draft PPP contract is usually prepared at this stage. In order to prepare and get the approval of the project proposal, it is required to set up the team and governance structure who will develop the project plan and timetable with help of the advisers. They also commission further studies related to the project, prepare the PPP arrangement, and decide on the selection of the procurement method. Then, the bidding committee is formed who defines the bidding criteria. A draft PPP contract is usually prepared at this stage.
Step 7 As to start the bidding process, it is necessary to publish the procurement notice together with the prequalification questionnaire. Then, the number of bidders is shortlisted and invited to tender. As to provide bidders with detailed information on all aspects of the project, interaction between the public procurement authority and the bidders. Then the evaluation of tenders is done and finally the preferred bidder selected. As to start the bidding process, it is necessary to publish the procurement notice together with the prequalification questionnaire. Then, the number of bidders is shortlisted and invited to tender. As to provide bidders with detailed information on all aspects of the project, interaction between the public procurement authority and the bidders. Then the evaluation of tenders is done and finally the preferred bidder selected.
Step 8 As to conclude the contract with the preferred bidder, it is necessary to check if some final amendments to the contract are needed. Then financial agreements are settled and the contract is closed. As to conclude the contract with the preferred bidder, it is necessary to check if some final amendments to the contract are needed. Then financial agreements are settled and the contract is closed.
Step 9 In order to ensure proper implementation process of the PPP project, the contract management team is established with the aim to perform day-to- day contract management activities and their regular monitoring. They also deal with possible changes of the contract as well as disputes, if they occur. The termination of the contract is the final phase of the implementation process and its issues should be clearly addressed. In order to ensure proper implementation process of the PPP project, the contract management team is established with the aim to perform day-to- day contract management activities and their regular monitoring. They also deal with possible changes of the contract as well as disputes, if they occur. The termination of the contract is the final phase of the implementation process and its issues should be clearly addressed.
Step 10 Two types of monitoring are expected: regular monitoring of the implementation of the PPP project and ex-post evaluation which presents lessons learned and serves to improve future decisions about PPP projects. Two types of monitoring are expected: regular monitoring of the implementation of the PPP project and ex-post evaluation which presents lessons learned and serves to improve future decisions about PPP projects.
Public Management (Heritage Management) Public management of heritage includes horizontal integration across various sectors and departments, and vertical integration by addressing local, regional and national spheres of government. Horizontal alignment requires cross-sectoral alignment of development goals across different sectoral strategies, and vertical alignment is realised by achieving coherence of the strategic goals of the development area with the goals of supreme strategies and plans of higher levels of government.
IBHRP Principles Key principles in creating IBHRPs are based on the newly adopted Council of Europe’s “European Cultural Heritage Strategy for the 21st century” which envisions the promotion of a „shared and unifying approach to cultural heritage management, based on an effective legal framework for the integrated conservation of heritage” . The main principles underlying revitalisation planning and management are the following: Responsibility – communities share responsibility for their heritage; Participation, transparency and inclusiveness – communities should be involved in planning, managing and enjoying the opportunities heritage offers while promoting transparency and communication in decision-making and evaluation; Relevance – integrated revitalisation plans address the needs of all relevant actors and stakeholders; Functional perspective – integrated revitalisation plans address the urban area, irrespectively of administrative boundaries considering that impacts on heritage and sustainable development of the municipality focus both on impacts within the municipality’s responsibility (involving the private economy and citizens) as well as on the impact of activities of all actors (municipality and stakeholders) on neighbouring municipalities and cities; Continuous evaluation – results of revitalisation need to be continually measured and improved in order to meet sustainable goals; Strategic orientation – revitalisation plans need to be integrated in strategic (political) decision making and as such be supported in implementation which means that they have to focus on strategic rather than operational issues; therefore, integrated revitalisation plans have to provide a strategic framework for sustainable urban development; Mainstreaming – revitalisation plans need to be organised centrally in the city management which means that regular involvement of the central political body in target setting and evaluation will ensure political commitment, legitimisation and maximised impacts; Decentralised implementation and integration – coordination of the revitalisation plan has to be based within the local administration ensuring horizontal integration across various sectors and departments; Complementarity – heritage revitalisation plans take into account the existing documents and plans provided for other sectors and in line with the urban development vision and strategic aims; Evolution – heritage revitalisation plans take into account the existing experiences and not starting from a scratch; Sustainability – heritage revitalisation plans are drivers of social, territorial and economic development.
Good governance Principles Good governance is based on the principle of sustainable development, respecting the environment. Six key principles, which have been widely accepted, are to be considered in achieving good governance in public-private partnerships: Participation: the degree of involvement of all stakeholders; Decency: the degree to which the formation and stewardship of the rules is undertaken without harming or causing grievance to people; Transparency: the degree of clarity and openness with which decisions are made; Accountability: the extent to which political actors are responsible to society for what they say and do; Fairness: the degree to which rules apply equally to everyone in society; and Efficiency: the extent to which limited human and financial resources are applied without waste, delay or corruption or without prejudicing future generations (Source: UNECE 2008, Guidebook on Promoting Good Governance in Public-Private Partnerships. New York and Geneva. Accessed 5 April 2017 at: http://www.unece.org/fileadmin/DAM/ceci/publications/ppp.pdf).
Value for Money Value for Money (VfM) analysis is at this time the most common (and popular) evaluation approach undertaken for comparing PPP procurement to traditional procurement (Public Sector Comparator). It is an approach that attempts to estimate/maximize all benefits (measurable and also non-measurable to the extent possible) to the public sector associated with engaging in a specific partnership. The best value is determined through a careful analysis of aggregate costs of the PPP that considers factors such as overall risks, project quality, timing and lifecycle costs. A rigorous VfM analysis is typically able to reveal with a certain degree of accuracy whether or not a PPP is the best procurement option for a given project.
IBHRP Strategies The following three components are the key in integrated heritage revitalisation strategies: The “social” (S) component which sees heritage as the key to promoting diversity, and empowers communities for participatory governance; The “territorial and economic development” (D) component stresses the contribution of heritage to sustainable development, based on local resources, tourism and employment; The “knowledge and education” (K) component focuses, through heritage, on education, research and training issues.
Local Stakeholders Group (LSG) Key stakeholders in creating an integrated heritage revitalisation plan by using the PPP model concern representatives of public, private and civil society. In order to ensure participation of the public while respecting the principles of integrated revitalisation strategies as well as those of good governance in a PPP, it is necessary to include a variety of local stakeholders. Local Stakeholders Group (LSG) comprises of representatives of each sector important for the strategic development of the city and heritage revitalisation based on PPP such as: representatives of the local public authority, sectoral agency (if existing), civil society representatives, private enterprises, SMEs, heritage specialists, urban planners, representatives of higher education and/or research sector as well as general public, etc. The task of the LSG is to contribute, through its knowledge and experience, to the development, subsequent implementation and monitoring of the IBHRP implementation. It works closely with the coordinator of the IBHRP development.
Contractual PPP This model of PPP is based either on taking availability or demand risk. PPP model based on taking availability risk presume that the private sector is fully responsible for design, building, financing, operating and maintenance of the assets and where the majority of revenues is coming from public sector. On the other side, PPP model based on taking demand risk presume that the majority of revenues of private sector is coming from the end users, instead of public sector budget. Typical type of this model is works and service concessions.
Institutional PPP Institutionalised PPPs refer to a specific type of PPP where public and private parties establish an entity with mixed capital in which the private party takes part actively in the operation of contracts awarded to the partnership. Usually, the public Authority controls the company either as a shareholder or through special rights it may hold and the private partner operates the service. This kind of cooperation between public and private partners can be very positive since the public partner is responsible for control over the infrastructure service, while the private partner is mainly providing their know-how (Source: Marques, R. C., & Berg, S. (2011). Risks, contracts, and private-sector participation in infrastructure). The European Commission has released a specific Interpretative Communication to address the application of EU procurement law in this instance.

FAQ

1) How does the Helpdesk service work?

The Helpdesk gives answers to PPP-related questions in five languages: English, Croatian, Polish, Slovak and Slovenian. You can contact the Helpdesk team either by e-mail or by phone between 9am and 4pm Monday to Friday.

2) Can I get detailed answers to my PPP-related issues in the Helpdesk?

Yes. The Helpdesk team provides the answers according to their best knowledge and as soon as possible, depending on how complicated the subject is.

3) What is the RESTAURA project? What outputs will it bring?

The RESTAURA project is aiming at identifying, testing, evaluating and promoting good practices on public-private partnership (PPP) approaches that revitalise historical cities and buildings. Its outputs will be strategies and action plans, tools, pilot actions and workshops for public authorities in Poland, Croatia, Slovakia and Slovenia willing to bring a new life to abandoned and deteriorated historic buildings with the use of PPP models.

4) Can I participate in the RESTAURA project’s activities?

Yes. The workshops for public authorities will be held between January and November 2018 in Poland, Croatia, Slovakia and Slovenia. Detailed information soon on the RESTAURA website: http://www.interreg-central.eu/restaura

5) Where can I get information about private companies potentially interested in participation in the PPP projects?

On each Helpdesk language page there is a section where potential partners are listed. Optionally, you can ask at the national authority responsible for PPP in your country or at the local public authority in your region.

6) Are there any courses/workshops/conferences/good practices on PPP in my country?

Currently PPP’s popularity is growing, so most probably there are. You can ask about them at the national authority responsible for PPP in your country or at the local public authority in your region.

7) How can PPP projects be linked with activities of NGOs involved in the cultural heritage field?

According to the so called Quintuple Helix model of cooperation, the non-governmental organisations can and should collaborate in the PPP projects along with research and development institutions, entrepreneurship, authorities and natural environments of society. They can act as consultants or experts in their field of interest, or even projects initiators. In practice, it all depends on the approach and attitude of the parties.