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Module 3 - 07 Defining Parameters (Scope)

7.1 What is the scope of the PPP?
7.2 What key processes are involved in defining
7.3 Who is involved in defining parameters?
7.4 What are the key issues?
7.5 What are the key parameter issues for pro-poor PPPs?
Further Guidance

Key Questions:


Related Tools:

02 Strategic Planning
06 Defining Objectives
15 Regulating the PPP

PPP Development Stage – Defining Parameters (Scope)

7.2 What key processes are involved in defining parameters?

Due to the differences in project fundamentals, country constraints and government objectives it is impossible for policymakers to choose a ready-made solution to defining project parameters. However, if it can provide clear answers to the following questions, the government or municipality should be able to formulate an optimal set of parameters.

  • Which tasks (design, build, maintenance, operation, financing and so on) are going to be delegated to the private sector?
  • What is the level of autonomy that will be left to the private sector and how is the private contractor to be controlled?
  • Will the project be implemented as a single link or as part of the network?
  • How will the project risks be allocated between the public and private sectors, and how will risk allocation evolve during construction and/or operation?
  • What type of cost recovery system will be used (for example: tax payer or direct and/or indirect user; specific taxes; dedicated resources; private sector remuneration linked (or not) to recovered costs; external costs; and so on)?
  • Which methods of financing are possible and suitable (for instance: government budget through taxes and loans; national savings or international funding; private financing with or without support from the government; or International Finance Institutions [IFIs])?

The fact that each of these six questions has a wide range of possible answers, which will result in an almost infinite variety of combinations, leaves the project designer with the difficult task of adjusting project parameters harmoniously in order to suit project needs.

Defining the parameters of a PPP should start with the identification of the main project fundamentals, in particular:

  • the nature of the project; and
  • the objectives of the stakeholders.



  S T A R T P A G E  
  Module 1 - Before PPPs  
  01-Starting Out  
  02-Strategic Planning  
  Module 2 - Preparation Stage  
  03-Planning & Organising  
  04-Collecting Information  
  Module 3 - PPP Development Stage  
  05-Identifying Constraints  
  06-Defining Objectives  
  07-Defing Parameters (Scope)  
  08-Establishing Principles  
  09-Identifying Partners  
  10-Establishing Partnership  
  11-Selecting Options  
  12-Financing (Investment)  
  13-Financing (Cost Recovery)  
  14-Preparing Business Plans  
  15-Regulating the PPP  
  Module 4 - Implementation  
  16-Tendering & Procurement  
  17-Negotiating & Contracting  
  18-Managing PPPs  
  19-Monitoring & Evaluation  
  20-Managing Conflict  
  21-Capacity Development  
  Contact Information