1. European PPP Expertise Centre (EPEC)
Building Public Sector Expertise and Organisational Capacity in the EU
Jaime Barragan EIB – European Investment Bank IADB, 8-9 December 2005

2. Europe’s PPP challenge
PPPs have a key role in modernising Europe’s infrastructure
Increasing evidence of PPPs track record on
effectiveness and
efficiency
But weakness of public sector organisational capacity still constraining further developments

3. Wide recognition of the need to increase public sector expertise
Van Miert High Level Group on TENs Transport (2004)
Dutch Ministry of Finance Report on Co-financing and Reform of TENs (2004)
Trans European Transport Network Report on Financing of TENs (2004)
DG Market Report on PPP Green Paper Consultation (2005)
European Economic & Social Committee Report on EIB’s Financing of PPPs (2005)
EBRD and UNECE proposals on financing concessions in Transition Countries and capacity building
Developing PPPs in New Europe (PriceWaterhouseCoopers)

4. The analysis
Low level of public sector experience, knowledge and organisational resources are barriers to development and implementation of PPP programmes in various countries
Many common issues arise across different national programmes
PPP expertise is not shared effectively between authorities
‘Reinventing the wheel’ can lead to poor value PPP transactions or failure of programmes
Some public authorities not realising the full, or expected, benefits of PPP programmes
Implications for the private sector of public sector weaknesses include excess bid costs and delay as well as dissatisfied public sector clients and negative image amongst the public

5. Recent High Level Recommendations
Importance of ‘initiatives to educate .. public authorities’ (Economic and Social Committee)
‘Many contributors favour exchange of best practice and need to learn from bad experiences’ (DG Market)
‘general consensus among national PPP Task Forces that infrastructure development could be further improved if the public sector had more effective means of sharing experiences in PPP policy, programme development and project implementation (European Commission)
‘The Commission should set up a cross-EU group, whose role would include .. acting as a centre of knowledge in PPPs for the EU .. coordinating requests for information and assistance’ (PriceWaterhouseCoopers)

6. The EU response
European Council October 2003 invited Commission & EIB to consider mobilisation in support of Growth Initiative and PPPs
March EU PPP Taskforces discuss need for EU PPP initiative
Distribution by EIB of Consultation Paper on establishment of a European PPP Expertise Centre (EPEC) to provide Knowledge Centre and, possibly, Advisory and Support Services
July to October 2005 extensive consultation with the public sector

7. PROPOSITION
“The public sector should pool its expertise and experience to provide institutional support by establishing a European Centre of Expertise (ECoE) for PPPs for Member States and Candidate Countries “
Objective – Assist EU public sector to speed-up and improve quality of project delivery

8. Why ?
Growing importance of using PPP structures in EU-25 Member States and Candidate Countries
Organisational framework, availability of necessary resources and experience of public sector are all critical factors in PPP success
Variable levels of experience across countries to-date
Scope to share best practice and learn from previous pitfalls between public sectors
Substantial experience in EIB and Member State Taskforces that could be utilised more effectively.

9. MEMBERSHIP & RESOURCE MODEL
Member State EC
EIB
European CoE
National PPP
Taskforce
EIB PPP CoE
Services
PPP Policy
& Programmes
PPP Projects 6

10. How would EPEC work?
Sharing of knowledge and expertise on policy development and programmes through review of key issues by EPEC Secretariat in response to member requests
Provision of information resources, network facilitation and communication channel
Preparation of review papers on EU experience; meeting / discussion facilitation. Mostly multilateral, also bilateral as required
Limited user fees reflecting ‘public good’ nature of service (information exchange)
Bilateral programme support could develop according to demand. Expected to be self financing given ‘private good’ nature of service
Creation of a pool of staff with EU wide experience

11. RESOURCESS Full time staff from EIB.
Seconded PPP experts from Member States
As required, draw on expertise from :
EIB’s country, legal and technical departments
Member State Taskforce staff
National Experts and Resources/Advisors

12. SERVICES Will NOT replace existing advisors
Located at the EIB premises in Luxembourg.
Focused on strategic advice for delivery of PPP policy, programme and projects
Priority to TENs policy, programme frameworks and flagship projects
Possible levels of service :
Basic; Helpdesk/Advice through access to PPP experts and web-based best practice resources
Premium; Direct contribution/involvement in the development of a country's PPP policy, programme or project. Substantial input for pilot projects or those in distress.
Will NOT replace existing advisors

13. EPEC would not: Provide project level support
Seek to replicate other advisory services (financial, technical, legal) or compete for advisory mandates
Require a large, dedicated infrastructure

14. EPEC would:
Seek to develop the public sector as a better informed client for private partners and advisors
Be demand driven
Be a joint Member State / Commission / EIB initiative
Be established with a limited time mandate, subject to extension
Develop new services (for example, training) only the basis of clear need

15. Outstanding issues Conceptual:
Does the private sector support the concept behind EPEC?
Is the proposed focus of EPEC’s activities appropriate?
How should EPEC and the private sector collaborate, and on what?
Operational:
How can EPEC access the required multi-disciplinary skills?
How should EPEC be funded?

16. Next steps Reflection on private sector perspectives on EPEC
Preparation, and web publication, of a Concept Paper on EPEC (end 2005 / early 2006)
Development of governance and funding arrangements (early 2006)
Finalisation of a proposal to stakeholders (Member States, Commission, EIB) (early 2006)