This presentation was made by Ana-Maria Ruiz Rivadeneira, OECD, at the 40th Annual Meeting of OECD Senior Budget Officials (SBO) held in Tallinn, Estonia, on 5-6 June 2019

1. INFRASTRUCTURE GOVERNACE AND PPPS:
PUTTING THE FRAMEWORK INTO PRACTICE
Ana María Ruiz Rivadeneira
Policy Analyst
Public Governance Directorate
40th Annual Meeting of OECD Senior Budget Officials
Tallinn, 5-6 June 2019

2. 2
12 years of expertise of the OECD Network
of Senior PPP and Infrastructure Officials

3. The role of the SBO in the infrastructure governance
context
The Ministry of Finance has a key role in dealing with:
1. Capital budgeting: the planning and allocation of capital
expenditure by governments
2. Investment management systems: the processes of prioritising,
appraising, selecting, implementing and reviewing capital investment
proposals
3. Infrastructure provision: an asset class that refers to the
reticulated supply of roads, energy, telecommunications, and
water/waste-water
4. Commercial transactions, specifically public-private
partnerships.
Ministries of Finance
Specialised agencies/units
Private-sector involvement
1 2 3 4

4. Current areas of work in collaboration with the PPP
and Infrastructure Governance Network
• Medium and long-term strategic planning
• Project planning and prioritization (alignment
with capital budgeting framework)
• Ensuring value for money, affordability and
fiscal sustainability
• Risk management & contingent liabilities
• Implementation of the OECD Principles for
Public Governance of PPPs

5. Improved strategic long-term planning of infrastructure
EST
SWE
AUS
LUX
CHE
CHL
CZE
DEU
DNK
FRA
HUNISR
NOR
SVK
SVN
AUT
ESP
GBR
GRC
IRL
ITA
JPN
MEX
NLD NZL
PRT
TUR
Sectoral and overall
(12)
Onlysectoral
(11)
Onlyoverall
(2)
None
(2)
Source: OECD (2018), Survey on Capital Budgeting and Infrastructure Governance

6. 6
However, in only 50% of countries the long-term
infrastructure vision is aligned with medium term fiscal plan
Source: OECD (2018), Survey on Capital Budgeting and Infrastructure Governance
EST
SWE
AUS
CHE
CHL
DEU
DNK
NOR
SVN
ITANLD
NZL
LUX
CZE
FRA
HUN
ISR
SVK
AUT
ESP
GBR
GRC
IRL MEX
PRT
TUR
Aligment
54%
No plan
8%
No alignment
38%

7. AUT
CHE
DEU
EST
FRA
HUN
JPNMEX
NOR
NZL
SVK
SWE
TUR
AUS
CHL
ESP
GRC
ITA
NLD
SVN CZE
DNK
GBR
IRL
ISR
LUX
Submission and
consideration in an
integrated way
Submission and
decision process
separated
(27%)
Submission together but
decision process
separated
Most OECD countries have achieved a certain degree
of integration of their current and capital budgets

8. PPPs remain a small proportion of overall public
sector infrastructure projects
8
Percentage of public sector infrastructure investment (value)
through PPPs in the recent 3 years
AUT
CHE
CZE
DEU
DNK
ESP
FRA
GBR
GRC
HUN
IRL
JPN
LUX
MEX NOR SVK
SVN
SWE
TUR
AUS
NZL
ITA
NLD
CHL
0 %– 5%
(19)
> 5% – 10%
(2)
>10% - 15%
(2)
>20%
(1)
Source: OECD (2018), OECD Survey of Capital Budgeting and Infrastructure Governance, Question 58, OECD, Paris.

9. Implementing the framework at the country level:
infrastructure governance, PPP, and large investment
projects reviews
• Objective: improve countries
management of infrastructure
policy from strategic planning to
project level delivery
• Assessment of gaps, standards
and needs in infrastructure stock
• Identify main bottlenecks for
infrastructure project
development
• International benchmarking
• Propose appropriate policy
responses and tailor-made
recommendations

10. • Current system favours market-driven build
• Explicit statement of long-term development goals
should guide infrastructure decision making
– Agenda 3030 could be a useful instrument
– Needs to be informed by risk assessment
– Supported by forward-looking budgeting (beyond current 1-yr
allocation system)
• Need to focus on users’ needs:
• Some mandatory consultation processes
• Citizen participation primarily in the context of environmental
impact assessment (i.e. specific project focus, not consultation on
overall strategy)
• Current Agenda 3030 regional consultations positive step
Chile Infrastructure Review: long-term
strategic vision

11. • Strong gate-keeping role of the Ministry of Finance of
approving infrastructure projects
• Social cost-benefit analysis for evaluation of most of
publicly funded projects, but…
• No formal set of criteria (e.g. value for money test) to
determine concession vs. PPP model or risk allocation
(c.f. French model)
• Risk of institutional bias:
– unsolicited bids can favour “easy option” (cots of
preparation passes to proposer)
– decision regarding the delivery method could be separated from
project evaluation and prioritisation decisions
Chile Infrastructure Review: Choice of delivery
mode and value for money assessment

12. • Conventional reporting (historical value of the infrastructure and
cash-flows) tell only part of the story and do not allow optimal
decision making.
• Balance sheets can show:
– Accumulated depreciation against the initial value of the
infrastructure;
– Impacts of maintenance and repair expenses on the present value
of the infrastructure;
– Future potential costs of decommissioning the infrastructure;
– And liabilities associated with PPP arrangements.
• Balance sheet information should be scrutinised for informing
decisions on need for new investments, appropriateness of
maintenance expenditure or preparing for future costs.
12
Asset management and impact on infrastructure
investment: Why look at the balance sheet?

13. 1. Country level support on strategic planning and
project prioritization (e.g. Spain and Argentina)
2. Asset management and impact on infrastructure
investment
3. Development of infrastructure governance
indicators
Future work: moving forward the Infrastructure
Governance Framework

14. THANK YOU!
Questions:
Ana Maria Ruiz Rivadeneira
Anamaria.ruiz@oecd.org