Guinea: Technical Assistance Report-Public-Private Partnership (PPP) Institutional and Fiscal Risks Management

Technical Assistance Reports, May 17, 2024

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Canonical URL: Guinea: Technical Assistance Report-Public-Private Partnership (PPP) Institutional and Fiscal Risks Management

Publication date: May 17, 2024
Language: [This report is only available in French]
Scope: Diagnostic of bottlenecks hampering the effectiveness of Guinea’s PPP governance framework and the management of PPP-related fiscal risks.
Principal conclusion: The legal and institutional framework for PPP in Guinea appears to be strong, but implementation is not yet effective.

Institutional implementation is weak despite a strong legal and institutional framework.
Institutions involved in PPP management are gradually stepping-up their staff and capacity.
The PPP unit (UPPP) has developed several standard documents (forms an templates) to assist contracting authorities in complying with legal and regulatory procedures for PPP projects.
Line ministries face factors that prevent completion of feasibility studies, undermining project efficiency and value for money.
Authorities exhibit a fiscal illusion of free infrastructure through PPPs; fiscal costs and contingent liabilities from PPPs are not sufficiently integrated into the fiscal risk management framework and the budget cycle.
There is massive recourse to unsolicited proposals for PPPs, which are often poorly aligned with government priorities.

The PPP unit (UPPP) has created standard documents (forms and templates) designed to help contracting authorities comply with legal and regulatory procedures.
Capacity building is under way but remains incomplete across institutions charged with PPP management.
Weak completion rates for feasibility studies in line ministries are cited as a key bottleneck to ensuring value for money.

The report emphasizes the need to consider fiscal costs and contingent liabilities generated by PPPs as part of:
- the fiscal risk management framework, and
- the budget cycle more generally.
Current practice underestimates or overlooks fiscal implications of PPPs, contributing to a perception of “free infrastructure.”

The report highlights massive recourse to unsolicited proposals for PPPs.
Unsolicited proposals are often poorly aligned with government priorities.
Recommended approach: limit the use of unsolicited proposals and favor government-led calls tenders, in line with good practices.

The report makes nine high-priority recommendations aimed at improving PPP management and associated fiscal risk in Guinea.
Recommendations focus on:
- strengthening implementation of the existing legal and institutional framework;
- accelerating capacity building within PPP institutions and line ministries;
- ensuring completion of feasibility studies to secure project efficiency and value for money;
- integrating PPP fiscal costs and contingent liabilities in fiscal risk management and the budget cycle;
- limiting unsolicited proposals and promoting government-led tenders to align projects with priorities.