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Ministry of Economy and Finance

General Department of Public-Private Partnerships

PPP Framework

PPP Project Cycle in Cambodia

As determined in the Law on PPP, PPP Project Cycle comprises of nine phases as follows:

  1. Project Identification: Implementing Agency shall identify potential projects for the preparation and implementation via the PPP mechanism.
  2. Project Selection: Implementing Agency with the intention to develop and implement projects through the PPP mechanism shall evaluate the potential and priority of the project prior to requesting the Ministry of Economy and Finance for review, selection, and approval of the project proposal as an Eligible Project, and to be included in the Priority PPP Project List. The project appraisal made by the Implementing Agency and project 8/23 selection by the Ministry of Economy and Finance shall be based on the criteria as stipulated in Article 9 of this Law.
  3. Project Preparation: Implementing Agency with the purview in its related sector of the eligible project shall manage the undertaking of the feasibility study of that project.
  4. Project Approval: If the Implementing Agency endorses the findings of the Feasibility Study, the Implementing Agency shall propose to the Ministry of Economy and Finance for review before proceeding further in accordance with the applicable procedures.
  5. Procurement Procedures: Following the Project Approval, the Implementing Agency shall conduct the procurement procedures as stipulated in Chapter VI of this Law for the selection of the candidates of the Private Partner to implement the PPP Project.
  6. PPP Contract Negotiation: Following the selection of the candidates of the Private Partner, Implementing Agency shall lead the Royal Government’s working group to negotiate terms and conditions of the draft PPP Contract.
  7. Approval of the Final Draft of the PPP Contract: After the conclusion of negotiation on the draft PPP Contract, Implementing Agency shall request to the Royal Government for approval on the final draft of the PPP Contract after the Ministry of Economy and Finance has provided its in-principle approval as stipulated in Point 2, Paragraph 1, Article 21 of this Law.
  8. Signing of the PPP Contract: Implementing Agency which has obtained the delegation of power in accordance with applicable laws and regulations as the representative of the State, and the selected Private Partner shall sign the PPP Contract and witnessed/counter-signed by the Ministry of Economy and Finance.
  9. Implementation and Management of the PPP Contract:
    -     The Private Partner shall be primarily responsible for the financing, detailed engineering design, selection of the contractors, construction, operations and/or maintenance in accordance with terms and conditions of the PPP Contract and pursuant to Chapter IX of this Law.
    - Implementing Agency shall manage, monitor and report on the performance of the implementation of the PPP Contract signed pursuant with Article 40 of this Law.

The SOP rationalizes these nine phases and consolidates them into five main phases as summarized follows:

Phase I: Project Identification and Selection. The Implementing Agency (IA) will identify the potential public investment projects from sector studies and Sector Master Plan that are prioritized for the Public Investment Program (PIP) of the Government. The IA, with the intention to develop and implement projects through the PPP, shall evaluate the potential of the project prior to requesting the MEF for review and approval and selection by the Public Investment Committee (PIC) as an Eligible Project to be included in the Priority PPP Project List. The IA will seek funding from the PDF or other sources for the transaction advisory services for the projects in the Priority PPP Project List and once approval of the funding is provided by the PIC, the Priority PPP Project will be subjected to Phase II.

Phase II: Project Preparation and Appraisal. Once the funding from the PDF or other sources is approved, the IA will undertake the Feasibility Study with the assistance of a Transaction Adviser (TA) and appraise the same to determine if it presents Value for Money (VfM) and is technically, economically, financially, and commercially viable for structuring as a PPP.

Phase III: Project Approval. If the IA agrees with the result of the FS of the project, as undertaken by the TA, the IA shall request the MEF and other relevant Government ministries, agencies and departments to review the result of the FS. The FS is subjected to a very detailed due diligence process by the MEF and on completion of this process, is submitted to the PIC for endorsement and approval from the Minister of MEF, where required, and from the Head of the Government to proceed to Phase IV. This phase may involve the approval of any government support measured by the Head of the Government, if requested by the IA and recommended by the Minister of MEF.

Phase IV: PPP Procurement and Contracting. Following the Project Approval, the IA shall undertake the procurement for the selection of the Private Partner to implement the PPP project. After the selection of the Private Partner, the IA shall lead the Government’s Working Group to negotiate the terms and conditions of the draft PPP Contract. After the completion of negotiation on draft PPP Contract, the IA shall request for approval from the Government on the final draft of the PPP Contract, once the Head of the Government has provided an in-principle approval in relation to any fiscal support. The IA having the delegated power, in accordance with applicable laws and regulations, and acting as the representative of the Government, shall sign the PPP Contract with the selected Private Partner, with the MEF countersigning the PPP Contract.

Phase V: Implementation and Management of PPP Contract. The Private Partner shall be primarily responsible for the detailed engineering design, financial close, procurement of contractor, construction, operations and/or maintenance of the PPP project, in accordance with the terms and conditions of the PPP Contract. The IA shall administer, monitor and report the performance of the signed PPP Contracts.