Contingent Liabilities: Issues and Practice; Aliona Cebotari; imf working Paper 08/245; October 1, 2008

Box 4. Institutional Arrangements for Managing PPP Risks 
International experience suggests that it is useful to entrust a central unit with overall responsibility for 
formulating policy and providing practical guidance on PPPs (UNCITRAL, 2001).
1 
Because of the 
complexity of the PPP arrangements, PPP contracting imposes much higher capacity requirements on the 
public sector than traditional procurement, and appropriate competencies and institutional structures need 
to be in place to efficiently and adequately manage the process (OECD/ITF, 2008). Concentrating PPP 
expertise in one area of government likely saves on costs and allows for a consistent, whole-of-
government approach. 
Almost all governments involved in PPP contracts have established some type of central PPP unit that 
reports to, or is part of, the Ministry of Finance. These include Czech Republic, Egypt, Greece, Ireland, 
Portugal, South Africa, State of Victoria (Australia), United Kingdom.
2
In some countries with large PPP 
programs, line ministries have also developed their own centers of expertise. A few countries do not have 
dedicated units, despite reliance on PPPs (e.g. Mozambique, Spain). Where establishment of a central unit 
might not be feasible, other measures may be considered to ensure an adequate level of coordination 
among the various public authorities involved (see UNCITRAL, 2001, for a discussion). 
1 
Such a unit might advise the government on PPP policy; accumulate and disseminate knowledge and 
expertise on PPPs; assess specific proposals for PPP projects and programs; advise on the preparation of 
tender documents and on bid evaluation; compile and analyze data on PPP programs; and evaluate the 
results and risks of running PPP contracts. 
2
The United Kingdom has two main institutions dealing with PPPs. On the project side, it has established 
an innovative institutional structure, Partnerships U.K.—itself a PPP—to support and accelerate the use of 
PPPs, with an Advisory Council to HM Treasury overseeing its work. On the policy side, the Office of 
Government Commerce is in charge of policy advice on PPPs.