Rules of engagement
From Lisbon to Libya, governments are in crisis.
And political unrest, or any such situation without a predictable outcome, is never a good foundation for investor confidence.
PPPs in Portugal are now on hold following the rejection of the government’s latest austerity plan
In the Middle East, where events are unfolding at such pace, we have seen bid deadlines for large projects pushed back in Saudi Arabia, Egypt and Jordan – three of the largest PPP markets in the region.
Although Egypt’s PPP unit still remains in place, it is still a little "scared of losing bidders", and the departure of Finance Minister Youssef Boutros-Ghali – one of the main exponents of PPPs in the country – has been a blow to the market.
Of course, the fact that projects haven’t been cancelled is good but it’s the wider picture that is of more concern.
Any new government will have to be able to engage with the private sector and international bidders, listen to their concerns and take on board considerations.
In this month’s feature, we look at how India has made changes to its tender process for government and state level road PPPs to attract international bidders and, more significantly, keep them interested in a multi-billion dollar pipeline of work over the next decade.
This pro-active approach is at odds with what’s happening in other parts of the world but represents a growing realisation that without early engagement and continued dialogue with bidders, PPP programmes are doomed from the outset.
Steps are being taken to stabilise the Egyptian PPP market already, with the formation of a committee to discuss PPP progress with the prime minister, according to Rania Zayed, director for the PPP central unit.
Although any move towards open democratic society will be welcomed by international firms, they will be watching closely how each government responds to the crisis and what measures are put in place to reassure investors.