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Nino Subeliani: PPP Center Starts Monitoring of Private Partnership Projects

Nino, in our previous interview we discussed the informational environment for the PPP model in the healthcare sector. You had some initiatives regarding the topic. What is the status of your initiatives now?

As PR consultant, I have to be aware about the trends in business environment that is always linked to economic situation in the country. The PPP model is an important topic that should be developed in the country for improving the economical environment, where the people reap main benefits, because the PPP’s fundamental principles are based on the People’s interests. Partnership between the public and private sectors is to develop and maintain large-scale infrastructure projects such as hospitals, schools, highways, hotels, etc. This model is based upon the principle that risks should sit with whichever party is best to manage those risks. For example, the public sector is better suited to managing a risk such as demand, whereas the private sector is better suited to managing project development risk. This model is beneficial for people, first, as country capital and budget are saved and optimized with the support of private sector.

Benefits of this model already are in focus of the government. Media outlets have published a statement by the Prime Minister that in the nearest future special company will be set up for tourism development under the PPP model. We also know that the Partnership Fund plays a big role in PPP projects implementation in the country.

The trend that can be a main player in economic development needs support services for effective results, such as informational support, monitoring from independent units, international relations and mediation between private and public sectors.

Because of the needs that we see, I and my friends, who are interested in this topic, have established the PPP center.

Which stage of development has your startup – PPP Center now reached? And what are your objectives and future plans?

The PPP Center was established by an initiative group to support the Public to Private Partnership model in Georgia through informational, educational and monitoring projects. We started working on this issue 3 months ago with zero information and financial resources, but with people who are interested in this topic.  We studied PPP projects in Georgia, evaluated the model perception level and its role in educational system. Based on desk research, we revealed importance of creating the monitoring system under the international methodology, and we are in the process of fulfillment of the project that will be launched ASAP.

I think establishment of PPP center was timely – this is right time and right place for this initiation.

Working group consists of economic and communication consultants and it will be enlarged with local and international economical experts, including PPP experts. Mission of the center is to make focus on research, educational, editorial, monitoring work and the Center aims to initiate a dialogue between Private and Public sectors and to support new PPP projects for economic improvements in the country.

What does the PPP monitoring imply?

To put simply, this will be monitoring of the project milestones, project phases agreed between public and private sectors in advance.  Through a competitive public procurement, Government appoints a Private Sector Partner to typically Design, Build, Finance and Operate (DBFO) a major facility, by using a long-term contract, typically 25-30 years. In this way, the government successfully transfers all of the project risks to the private sector, which is better suited to managing a project and commercial risks. Once project is launched, the PPP Center starts its monitoring of Design, Build, Finance and Operate.

PPP monitoring by independent center will generate transparency in this field that is also one aspect of risks management.  The main outcome is that the medium and long-term objectives be clearly identified and pursued. Once the monitoring methodology will be fulfilled by the group, we will publish it on www.ppp.gefor the transparency of the process.

The second direction of PPP monitoring will be related to the PPP index that will reveal how model is being developed in the country and what are benefits in different sectors. PPP index calculation will be based on PPP ratio in GDP – totally and according sectors.

It’s important that we are cooperating with PPP Centers in different countries for knowledge sharing that means that we are not creating a new bicycle, but we work on adaptation of methodology for the Georgian environment.