The document discusses the importance of infrastructure governance and presents a framework for better governance. It notes that 10-30% of public infrastructure investment is lost due to mismanagement and corruption, and poor governance increases costs by around 40%. The framework identifies 10 dimensions of infrastructure governance, including having a strategic vision, managing integrity, ensuring affordability, generating and analyzing data, and maintaining resilience. The framework aims to help countries deliver quality infrastructure projects on time and on budget through improved governance.

1. GETTING INFRASTRUCTURE RIGHT:
A FRAMEWORK FOR BETTER GOVERNANCE
Irène Hors
Deputy Director
Public Governance Directorate
40th Annual Meeting of OECD Senior Budget Officials
Tallinn, 5-6 June 2019

2. Why focus on Infrastructure Governance?
10-30% of investment in a
publicly funded construction lost
through mismanagement and
corruption (COST, 2012)
Quality of public governance
correlates with public
investment and growth
outcomes at the national and
subnational levels (OECD, 2013)
Poor governance increases the
cost of infrastructure by around
40% (MK, 2013)
Around 30% of the potential
gains from public investment
are lost due to inefficiencies
(IMF, 2015)
 Ensuring quality infrastructure investment is
primarily a governance challenge

3. • Good governance is
necessary for planning,
selecting and delivering the
right infrastructure, on time,
and on budget
– Infrastructure governance:
processes, tools, norms of
interaction, decision-making
processes and monitoring
• Objective: making the right
projects happen, in a way that
is cost effective, affordable
and trusted by investors,
users and citizens
3
Why focus on Infrastructure Governance?
The Infrastructure Governance Cycle
Source: OECD (2015), Towards a Framework of the
Governance of Infrastructure

4. 4
Infrastructure governance involves various
policy communities
- SBO/financial management & reporting
• Capital budgeting & MTEF
• Risk management & contingent
liabilities
• Budget execution
• Balance sheet management
- SBO/PPP and Infrastructure Officials
Network
- Regulatory Policy Committee /
Network of Economic Regulators
- WP of Leading Practitioners of Public
Procurement
- WP of Senior Public Integrity Officials
- High-kevel Risk Forum

5. OECD Framework for the Governance of
Infrastructure: Getting Infrastructure Right (2017)
5
 Ten dimensions or “success
factors”
 Policy options to identify an
enabling environment
 Building on several OECD
instruments (public procurement,
integrity, budgeting, MLG)

6. • Further develop the Framework for the Governance
of Infrastructure (Recommendation ?)
• Regulatory frameworks for capital maintenance and
investment (draft principles)
• Inter-generational equity for asset stewardship
(comparative analysis)
• Governance framework to promote the resilience of
critical infrastructure
• Data-driven approaches for enhancing corruption
and fraud risk assessments
6
PWB 2019-20 : highlights

7. THANK YOU!
Questions:
Irène Hors-Nath
Irene.hors@oecd.org
Ana Maria Ruiz Rivadeneira
Anamaria.ruiz@oecd.org

8. ADDITIONAL SUPPORT
SLIDES
8

9. 9
Infrastructure governance matters

10. • Quality infrastructure helps governments achieve
economic, environmental and social objectives.
• Good governance of infrastructure is as comprehensive
as the requirements for delivering quality infrastructure
and includes:
– Ensuring transparency combined with ‘checks and balances’
– Integrating infrastructure planning and capital budgeting
– Formalised regulatory processes to support the investment
environment
– Institutional capacity throughout the life of the asset
– Systematic collection of data to support evidence-based
decision-making.
10
Delivering Quality Infrastructure – Meeting
the Governance Challenge

11. 1. Develop a strategic vision for infrastructure
– A means to go beyond silos and balance of multiple objectives
– Long term vision with a flexible approach
– Link to budget allocations and fiscal framework
2. Choose how to deliver infrastructure
– Use of data and cost/benefit analysis
– Choose a delivery model based on project size and profile, source of
revenues, possibility to measure usage, uncertainty levels and risks.
3. Co-ordinate infrastructure policy across levels of
government
– Reduce gaps, overlaps, or contradictions
– Alignment of strategic priorities
– Economies of scale 11
Strategic Vision and planning

12. 4. Manage threats to integrity
– Adequate conflict of interest policies
– System of internal controls and reporting mechanisms
5. Ensure good regulatory design
– Reduce uncertainty from the "rules of the game“
– Create confidence
6. Integrate a consultation process
– Identify and meet users’ needs
– Enhance the legitimacy amongst the stakeholders
– Beyond the project preparation phase (e. g. Participatory auditing
procedures)
12
Enabling framework

13. 7. Guard affordability and value for money
– Risk management and allocation
– Strong capital budgeting framework
– CBA role in green-lighting infrastructure projects
– Management and accounting of contingent liabilities
8. Generate, analyse and disclose useful data
− Central unit for the collection, disclosure and analysis of data
− Data on infrastructure investment flow and stock
− Results and impact assessment
13
Affordability and Value for Money

14. 9. Make sure the asset performs throughout its life
− Monitoring tools to ensure performance throughout the life of the
asset
− Costing, planning and budgeting for maintenance costs
− Strategy for re-negotiations.
− Ex post value for money evaluation
10.Public infrastructure needs to be resilient
– Socio-economic and environmental impacts
– Functional dependencies of critical infrastructure
– Disaster risk assessment plan
14
Life-cycle perspective

15. Assessment
• PPP Fiscal Risk Assessment Model (PFRAM) (IMF/WB)
• OECD Infrastructure Governance and PPP Reviews (OECD)
• Debt-Investment-Growth (DIG) (IMF)
Toolkits
• The PPP Toolkit (WB)
• Toolkit on Enabling SME Participation in FCV Infrastructure Services
(WB)
Data
• InfraCompass (G20)
• PIMA (IMF)
• Capital Budgeting and Infrastructure Governance Survey (OECD)
Some existing tools and practical guidance on
infrastructure governance

16. Existing tools and practical guidance on
infrastructure governance
Main drivers of quality infrastructure planning
and delivery:
• Governance
• Regulatory
• Permits
• Plan
• Procure
• Deliver

17. Relative strengths
Framework
dimension
InfraCompass (G20) PIMA (IMF)
Vision
Integrity
Delivery
Regulation Partial
Consultation
Coordination
Affordability and VfM
Data
Performance
Resilience