Freedom of Information Acts and Disclosure in Public-Private Partnerships

Prashant Sharma, PhDOpen Society Fellow

Visiting Fellow, United Nations Research Institute for Social Development, GenevaResearch Associate, Swiss Graduate School of Public Administration, University of Lausanne

prashant.sharma@alumni.lse.ac.uk

Transparency and Accountability in PPPsWorld Bank e-Institute Webinar

2 June 2015

Delhi Airport

Delhi Airport

Delhi Airport

Delhi Airport

Delhi Airport

• Redevelopment in PPP mode• Cost of makeover over USD 3 billion– Government share ~ USD 780 million (26%)

• Government ‘loses’ USD 2.4 billion over development of surrounding land

• Delhi International Airport Limited (DIAL) Board includes members of the Civil Aviation Ministry and Airports Authority of India

Delhi Airport• In 2006, Anil Heble files an application under the RTI Act

to the Ministry of Civil Aviation seeking information about the construction of a new security wall next to the site of the revamped new airport in Delhi– Would the new wall close all entrances and exits to

the village in use presently?– If yes, where exactly would new entrances and exits

to the village be provided? – How many number of exits and entrances would be

provided to the village? – Would the present road be available for use by the

residents of the village?

Delhi Airport

• Request sent to Delhi International Airport Private Limited (DIAL), a Public-Private Partnership (PPP) venture

• DIAL claims it is not a public authority; Does not give information

• Case goes to Central Information Commission (CIC)• DIAL claims it is not a PA because GMR, a private company,

holds 74% stake in the company; Government stake is 26%• CIC rules that “holding of 26 per cent is quite substantial” and

orders the release of information in 2007• DIAL obtains stay from the High Court

The Plot Thickens

The Plot Thickens

• CIC seeks clarification on status of PPPs with respect to FoI / RTI

• Government responds evasively, but with an emphasis on disclosure of ‘model concession agreements’ rather than inclusion of PPPs within the RTI

Current Global Situation

• FoI typically focused on public authorities– RTI Rating Index

• PPPs typically are NOT directly within the ambit of FoI

• Indirect inclusion– South Africa– India

• However, increasing push for proactive disclosure of contracts, agreements, performance indicators, financial statements etc.

The Conundrum

• Current discussions on PPPs around proactive disclosure and horizontal mechanisms of accountability (regulators, performance monitoring etc)

• FoI / RTI mandates reactive and on-demand disclosure as well– Direct and everyday accountability– Vertical accountability

• Is it possible or even ‘desirable’ for PPPs to be placed under FoI legislation?

The Conundrum

• Arguments for inclusion– Any project that involves the government in any capacity

must be carried out openly and should be subject to the same checks and balances as the government itself

– All listed companies are accountable to their shareholders, and this logic should be extended to PPPs and FoI

• Arguments for exclusion– Commercial interest– Negative impacts (delays etc) on execution of project– Are regulators insufficient to ensure that public interest is

protected?

Conceptual Issues

• Principal-Agent problem– Do PPPs add another layer of separation between citizens and

providers of public goods and services?– When the ‘market’ takes on functions of the state, who is the

principal, who is the agent, and where and how is citizenship exercised?

• Is the state-citizen relationship morphing into a producer-consumer relationship?– Consumer protection laws becoming more relevant than RTI/FoI?

• How can vertical accountability be effectively realized in a context of multistakeholder governance?

– Does the nature of the PPP project – physical or social infrastructure – have a bearing on the issue of vertical accountability?

Breaking the Impasse

• Every PPP proposal including the draft agreement be published for inviting public comments and objections before finalising it– Similar to pre-legislative public consultation

frameworks

Breaking the Impasse

• The PPP agreement should include a condition that the Special Purpose Vehicle or any other entity that comes into being as a result of the agreement would be a public authority– Inclusion under FoI / RTI would be ex ante or ex

post?• Would information related to the PPP prior to the

agreement be available under FoI?

Breaking the Impasse

• The public authority which has caused the PPP to come into being to be responsible for providing all information (under FoI / RTI) regarding the PPP project by securing it from the PPP entity

Breaking the Impasse

• All of the above could sit comfortably with current exemptions related to commercial interests in all FoI legislation

• Greater transparency leads to greater efficiency in the long run

• Could we develop a matrix that layers the framework for disclosure for PPPs upon the larger conceptual framework that underlies all FoI?

Thank You!