Disclosure of project and contract information in public-private partnerships
1. This report presents a review of current practices on the disclosure of information on PPP projects and contracts from 11 jurisdictions at the national and sub-national level representing 8 countries. It is part of a broader program of work being undertaken by the World Bank Institute (WBI) on increasing the transparency of public-private contracting.
2. The objective of this review is to present emerging practices on the disclosure of information on PPP projects and contracts and to distill from thesesuggestionsto government agencies on how they can provide more information to their public on their PPP projects. There are no grounds to believe that PPPs require greater transparency than similar projects executed through traditional public procurement. However as with publicly-executed projects PPPs can benefit from greater transparency. In addition PPPs may require considerations and approaches to disclosure not present in publicly-executed projects.
3. The benefits of disclosure. There is not yet a body of evidence linking the transparency of information on PPPs to program/project performance, in part because efforts to improve transparency are relatively new. However there are reasons to believe that significant disclosure can help PPP programs achieve better value-for-money. Examples include how revealing information on procurement of PPPs can improve governance, how disclosing information on government contributions to and risk-bearing under PPPs can improve the management of the fiscal costs of PPPs, and how disclosing information on the performance of PPPs provides users of services with an understanding of what levels of service they should be getting. Contract disclosure may well produce more sustainable contracts and benefit the private sector by reduced risks of renegotiation.
4. The costs of disclosure. The disclosure of information is not costless and a comprehensive program of disclosure including contracts, related documents and ongoing performance reporting will require significant resources. However scanning and placing online the current version of the contract requires relatively little resources and can be a useful step in itself. Summarizingand publishing information on the ongoing performance of a PPP requires moreresources, although arguably much of this effort is an essential part of contract management and should be performed anyway.
5. Current practices on the disclosure of information. Some jurisdictions ensure that a substantial amount of information is disclosed proactively. In many others, although information can be accessed via general transparency laws, it is time consuming for both information users and information producers. Latin American countries publish their PPP contracts, the United Kingdom adopted a pro-disclosure policy, India has recently published a large number of highways contracts, and Australia and Canada disclose significant information on their contracts and projects. While there are still countries with no proactive disclosure, and countries that significantly redact published contracts, in many jurisdictions contracts are disclosed online with no redactions at all. There is therefore evidence of significant disclosure of information on PPP projects and contracts, as well as a clear trend towards proactive disclosure of information on PPP contracts and projects.
6. Proactive disclosure. In nine out of eleven jurisdictions we reviewed, online disclosure of PPP contracts, in a proactive way, is now the norm, while in a tenth one online disclosure is rapidly spreading. In most cases, scanned signed contracts are downloadable.
7. Full disclosure. Roughly one half of the jurisdictions practicing online proactive disclosure do not redact PPP contracts. The ones that do redact have now strict rules on redactions, restricting the reasons for redactions and regulating the redaction procedure.
8. Contract and project summaries. Some governments have implemented a practice of publishing contract summaries that present in plain language the complex provisions included in their PPP contracts. This practice is not and should not be used as a substitute for contract disclosure, but as a useful complement to contract disclosure. These summaries can also include information on the project rationale and the procurement process.
9. Actual performance of PPP operators: Countries with no proactive disclosure of contracts also do not proactively disclose performance.
10. Table 1 below provides a summary of practices in the jurisdictions surveyed covering some but not all of the areas on disclosure that we surveyed:
- Contract Disclosure: the public availability of the actual signed contract and any substantial changes to its prescriptions that may have happened after signing of the contract.
- Contract Summary: Is there a document presenting the project and the contract in plain language, describing the object and conditions, term, quality and performance requirements and indicators, reward/penalties scheme, and monitoring system?
- Government Guarantees: Availability of information on guarantees, including in the form of side letters etc.
- Performance and Audit Reports: Information on disclosure of performance reports by PPP Operators, Contract Managers, Third Party Assessments, as well as audit reports.
11. Emerging practices in disclosure of information on PPPs. Based on our review and an assessment of practices some key elements of proactive disclosure should be:
- The disclosure of the current PPP contract (identifying any changes made since the contract was originally signed) and relevant side agreements including government guarantees, with minimal redactions which reflect commercially confidential information;
- The disclosure of future stream of payments and government commitments under PPP contracts;
- The publication of a summary which provides in plain language the most important elements of the contract and project and key information on the rationalization of the project, selection as a PPP and procurement; information on a regular basis on the performance of the project; and
- A process by which information is authenticated/validated.
12. The remainder of this report is structured as follows:
- Section 1 presents a synthesis of observed practices and then a recommended approach in terms of essential information to be disclosed and the key instruments through which this is done;
- Section 2 presents country case studies in a standardized format reflecting the recommendations in Section 1;
- Annexures 1 and 2 list relevant websites, legislation and policy.