PPP in Brazil
Procedures & Methodology
Marcelo de Lima e Souza
PPP Unit – Economic Advisory
Ministry of Planning, Budget and Management
Mexico, February 23rd 2010
Summary
Brazilian PPP Institutional Framework
PPP Project Selection and Development
Methodology & Capacity Building
PPP Institutional Framework
PPP in Brazil: a narrow definition
• In many countries
• Almost any kind of long-term relationship between
public and private sectors
• Joint ventures, leases, franchises, concessions, PFI (UK),
• privatization...
• In Brazil
• PPP are special kinds of concessions
• Common Concession – a concession of a public service
in which revenues come exclusively from user tariffs
• PPP and Common Concessions have similar economic
structures
PPP in Brazil: a narrow definition
• Concessão patrocinada (Sponsored Concession)
• Common concession of public services
• Origin of revenue: tariff + public payments
• Concessão administrativa (Administrative
Concession)
• Direct or indirect services to the Public
Administration
• Public services
• Economic activities not listed as public services
• Origin of revenue: public payments
Revenue Generation and Type of Contract
Concessions
8.987/95
9.074/95
Sustainable
projects
PPP
Law
11.079/04
Partially sustainable
projects by means of
public resources
Traditional projects of public
investments and public procurement
PPP
11.079/04
and
Public Tendering
Law
8.666/93
Legal Requirements
Law 11.079/2004:
• Contract duration from 5 to 35 years
• Contract Value: at least R$ 20mi (US$ 11mi)
• Contract Object can’t exclusively be restricted
to:
• Hiring personnel
• Providing and/or installing equipments
• Providing Civil works
PPP Project Selection and Development
Key Players
• CGP - PPP Council
• Members:
• Ministry of Planning (coordinator)
• Ministry of Finance
• Presidency Chief of Staff
• Responsibilities:
• Establishes contracting procedures
• Defines PPP priority projects
• Authorizes tendering processes
Key Players
• PPP Unit / Economic Advisory M. Planning
• Technical support to the CGP
• Administrative support to the CGP
• Advisory to third parties
• TCU – National Audit Office
• Oversees the proceedings on various levels
• STN – National Treasury
• Fiscal controls
Development of PPP Projects
PHASE 1
Identification of PPP
projects from the Multi-Year
Plan
PHASE 2
Preliminary analysis and
prioritization of
PPP projects
PHASE 3
Structuring of PPP
projects
-
1
Multi-Year
Plan
PPP
Projects
Portfolio
2
……………
PPP
Projects
4
3
PPP
Structuring
Team
Projects prioritization criteria
Development
Strategy of the
Federal
Government
Revenue
generation
capacity
1
2
……………
PPP
Projects
Level of
project
development
4
3
3
Interest by
the private
sector
Required Studies for a PPP
Convenience and
Opportunity
Studies on
Fiscal Impact
Technical Studies
Economic and
financial
feasibility
Determine and project
demand
Operational Project and
Performance Indicators
Engineering Project and
Investment Program
Environmental Studies
Legal
Studies
Economic/Fina
ncial Model
Business
Model
Financing
Structure
Risk Analysis
Legal
Model and
documents
Methodology & Capacity
Building
Project ATN/MT 9587-BR
• Cooperation Agreement with IADB/MIF
• Consolidate the PPP Unit and provide support to
sector units and to other government levels
• Institutionalize PPP methodology
• Structure and develop projects
Consolidation and Support (2009 activities)
• 01 National Training Course
• II Course on PPP Development
• 300 participants
• 01 Regional Seminar
• I Seminar on PPP
• 270 Participants
• 05 Local Training Courses (Aracaju, Fortaleza,
Natal, São Luis, Teresina)
• About 50 participants on each session
Methodology Development
• Development of a Value for Money Methodology
• Selection of external consultants in a competitive
process
• Comparison of foreign methodology and best practices
• UK, Ireland, Australia, Netherlands, South Africa and Canada
• Creation of a quantitave and qualitative method fo
• Publishing a PPP Project Analysis Manual
• Creation of an Analysis Model for PPP Projects
• Development of an illustrative applied model on eight projects
on different economy sectors
• Public officials training program
• Expected conclusion date: November 2010
Project Structuring
• Technical Cooperation Agreements signed with
states and municipalities:
• Agreements with Bahia, Ceará, Manaus, Maranhão,
Piauí,Rio Grande do Norte
• Development of projects:
• Highway (Piauí)
• Logistics Plataform (Bahia)
• Administrative Center (Rio Grande do Norte)
Project Structuring
• Technical Cooperation Agreements signed with
federal organizations:
• Brazilian Space Agency: geostationary satellite
• Ad hoc cooperation
Thank You.
Marcelo de Lima e Souza
Ministério do Planejamento, Orçamento e Gestão
Tel: +55 61 2020-4944
Fax: + 55 61 2020-8084
E-mail: marcelo.l.souza@planejamento.gov.br