Managing Contingent Liabilities in Public-Private Partnerships : Practice in Australia, Chile, and South Africa
Contingent liabilities create management problems for governments. They have a cost, but judging what the cost is and whether it is worth incurring is difficult. Except in the case of contingent liabilities created by simple guarantees of debt, gov...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/12/25508831/managing-contingent-liabilities-public-private-partnerships-practice-australia-chile-south-africa http://hdl.handle.net/10986/23187 |
| Summary: | Contingent liabilities create management
problems for governments. They have a cost, but judging what
the cost is and whether it is worth incurring is difficult.
Except in the case of contingent liabilities created by
simple guarantees of debt, governments usually can incur
contingent liabilities without budgetary approval or
recognition in the governments accounts. So governments may
prefer contingent liabilities to other obligations. (The
uncertainty surrounding contingent liabilities can work
differently. It is well known that PPPs create contingent
liabilities, and the International Monetary Fund (IMF), the
World Bank, and others often warn of the risks. The initial
reaction of a cautious Ministry of Finance may be to seek to
avoid all contingent liabilities.) Management problems also
arise once a government has incurred a contingent liability.
Projects need to be monitored to reduce risks if possible.
Spending on contingent liabilities must sometimes be
forecast, despite the difficulty. |
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