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Module 1 -  01
Starting Out

1.1 Why public-private partnerships?
1.2 What are the key features of successful partnerships?
1.3 What are the major gaps in forming a successful partnership?
Further Guidance - How to use

Key Questions:

How do we get started?

Related Tools:

08 Establishing Principles
09 Identifying Partners
11 Selecting Options
15 Regulating the PPP

Toolkit for Pro-Poor Municipal PPPs

Before PPPs – Starting out

UNDP's Public Private Partnership for the Urban Environment (PPPUE) programme has commissioned this toolkit as a contribution to its work on developing capacities in local governments, businesses and communities to work through PPPs to improve service delivery to the poor.

PPPUE is the global facility that developing countries use to obtain support in their efforts to define, promote and implement Public Private Partnerships to reduce poverty by increasing the access of the urban poor to basic services. The programme offers a flexible portfolio of demand driven services built on the basis of a strong partner network and results at the country level.

The Tools for Pro Poor PPP at the local level are aimed at members of local level government, business and community organisations interested in an innovative approach to the problems of service delivery, especially to the poor. The toolkit has been developed as a working manual to be added to and modified as required by users to enhance its functionality. It has been prepared with the extensive involvement of people involved in PPPUE's projects and programmes around the world. These contributions have been invaluable and have served to ensure that the text presents a globally applicable entry point to PPPs while simultaneously remaining open to modification with locally appropriate contextual materials. We encourage you to add examples you come across, insert copies of your own legislation and remove any of the modules which you do not find useful in your work. Please feel free to contact the PPPUE programme [pppue@undp.or] to let us know of any modifications you have made, it will serve to assist us to make further tools more appropriate still.

UNDP gratefully acknowledge the many different people who have willingly contributed their knowledge, opinions and time to the development of this work. Most importantly we wish to thank Dr. M.Sohail of WEDC, Loughborough University, who was commissioned to produce the tool. He has provided his extensive knowledge of PPPs for service delivery, his vision of the possibilities for the tool and for overall management of the development process. We would also with to thank Ms Olena Maslyukivska of Kyiv-Mohyla Academy Ukraine for general assistance and the authoring of certain tools. Beyond them there are the following to thank:

  • Professor Bradford Gentry of Yale University for sharing ideas on the structure and feedback.
  • Janelle Plummer, Water and Sanitation programme of the World Bank for development of initial ideas and tools
  • Sue Coates, Margaret Ince and other WEDC staff for facilitating workshops and providing comments.

We are also grateful to the external reviewers and potential users who have commented on the basis of use of this toolkit, particularly the following:

  • Maleye Diop, Programme Manager, PPPUE,
  • Jenny Tough, PPP Policy Specialist, PPPUE, and
  • Tsutomu Nishimura, PPPUE Associate Specialist, PPPUE
  • Deo Ndimo, PPPUE National Programme Manager, Living Earth Uganda and Elizabeth Kharono, Programme Coordinator, Living Earth Uganda
  • Erik Bryld, Urban Development Officer, UNDP Nepal and Purusottam Man Shrestha, PPPUE National Programme Manager, Nepal
  • May Hendarmini, PPPUE Project Manager, Jakarta Legislature, Indonesia
  • Tan Pek Leng, Director and Lim Poh Im, PPPUE Project Coordinator, Socio-Economic & Environmental Research Institute, Malaysia
  • Ana Hardoy, PPPUE National Programme Manager, IIED-AL, Argentina
  • Kwame Asubonteng, PPPUE National Programme Coordinator, Ministry of Regional Local Government and Housing, Namibia
  • Sidi Aly Ould Moulaye Zeine and Mourad Tourad, PPPUE Implementing Partners, Tenmiya, Mauritania
  • Helena Mutemba, Programme Officer, UNDP Mozambique and Maria Chuma, PPPUE Project Coordinator, CARE Mozambique
  • Raúl Tolmos, Programme Officer, UNDP Peru
  • Natalia Olofinskaya, Programme Officer, UNDP Russia

Thanks to Ms Jane Lingan for proof reading. Special thanks to the people from the low-income settlements in the various case locations who have contributed to the research and have provided their perspectives on the issues. We feel greatly indebted to them.

Maleye Diop
Programme Manager PPPUE
Johannesburg, South Africa



Starting out

1.1 Why public-private partnerships?

It is becoming increasingly clear that governments cannot meet the continually growing demand for services by acting alone, and that there is a need to look for support from other sectors of society.

The public-private partnership (PPP) is one of the most promising forms of such collaboration. It is based on the recognition that both the public and private sectors can benefit by pooling their financial resources, know-how and expertise to improve the delivery of basic services to all citizens. In addition, PPPs offer an alternative to full privatisation by combining the advantages of both sectors; that is they combine the:

  • social responsibility, environmental awareness and public accountability of the public sector; with the
  • finance, technology, managerial efficiency and entrepreneurial spirit of the private sector.

In this toolkit the term public-private partnership (PPP) is used to describe a spectrum [Tool 11-1] of possible relationships between the government (the public sector) and other organisations that are not government (the private sector) to carry out a project or provide a service. The community has a direct role to play in such an arrangement as a beneficiary, expressing the price the community would pay for an acceptable level of service, and an indirect role to play in shaping policy for the urban environment. In a small PPP, the community may be able to take the role of the private partner.

  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