The Public-Private Partnership is not a Brazilian creation. The international experience, which counts on over a decade of historical development, abounds in successful examples that may teach important lesson to Brazil throughout its pathway towards new investments.

The PPP, in a more innovative sense of the expression, was conceived in England at the beginning of the nineties, and has been successfully adopted by many countries, such as Portugal, Holland, Ireland, South Africa and Canada. The PPP isn’t also a developed countries’ exclusivity, but an important reality in the countries of Central Europe and Latin America itself, where Mexico and Chile stand out.

In the case of the Central America countries, PPPs are being encouraged by the European Commission (EC) as a mean for those to achieve the budgetary equilibrium required for its adhesion to the European Union,, with no losses in the accomplishment of priority investments. EC published lines of direction for the successful implementation of PPPs, many of which are applicable to Brazil.

Some other initiatives worthy of praise may be mentioned in the scope of the United Nations, the multilateral agencies such as the World Bank an the Inter-American Development Bank and the Organization for Economic Co-operation and Development, all of them in favor of the PPPs.

The English experience is the most representative one, as it is the outcome of projects developed and tested long since. In 2003, the official statistics registered 560 PPP implemented projects in that country, involving investments of about 35 billion pounds.

The English experience reveal itself so successful that, by considerably reducing the risk perception, currently it is discussed how to share, between the private initiative and the public authorities, the profits resulting from the refinancing which allowed the decrease of the interest rates during the execution of the first PPPs projects. Conscientious of this precedent, the Brazilian Federal Bill provided for the sharer of these profits as a mandatory clause of the PPP agreement. A few other lessons may be attained through this international experience.

PPP is not a cure-all. The PPP usage must be carefully studied case-by-case, being justifiable only when the private initiative traditional ways for agreement are impracticable. If the private person can recover its investment by means of tariffs charged form the users, then the recommendable system will be the traditional concession. The concession will not be advisable in this case only if the public interest requires that the granting authorities maintain the prerogative of fixing the tariff under the cost of the service or praise it underneath the inflation index.

The PPP adoption may bring advantages and greater efficiency in respect to other ways of contracting the private initiative, with results measurable by the society. That is the value for money.

In 2001, the English government had already undertaken a responsibility of about 100 billion pounds in PPP agreements due to 2026. Indebtedness is not the question, i.e., financial liabilities resulted from implements already used up or resources previously spent, but contractual obligations that will be just right as the services contracted with the private initiative are delivered, complying with quality patterns approved. This characteristic of the PPP grants a privilege to efficiency, since State’s disbursement will only happen against previously defined compensations.

Another lesson is that a favorable environment for new investments in PPP requires not only a regulatory framework, but also an experience and culture in PPPs that can only be achieved by the implementation of the first projects.

It is, then, essential that the pilot projects be chosen among those with greater social appeal or that better emphasize the advantages of the PPPs, so that other projects can come after them in a really geometrical progression. The mistake of launching too many projects in advance before these precedents are carefully put together should not be made.

The English position was exactly that. From 1990 to 1993, statistics showed the conclusion, by the national government, of 10 PPPs projects, recording an exponential growth since then, with 106 projects only in 2000. All of these precedents allowed the development of a valuable experience, including detailed agreement models that, by virtue of the standardization of the best techniques, are currently employed in order to implement PPPs in a more rapidly, less expensive and more clear way for both, the controlling bodies and the society.

It is a mistake to believe that the international experience cannot bring useful lessons to Brazil. Despite the undeniable social-economic differences between the countries, others have already overcome many of the problems we face nowadays. It falls to the government and to its partners to make good use of those lessons and, with creativity and efforts, adapt them to the Brazilian context.

Sources:   Valor Econômico March 09, 2004 p.E4
Date of insertion:   23/03/2004 - 23:54:13