Services provided through public-private partnerships

• Planning and risk management of PPP projects needs to be improved.
• The delivery and quality of all agreed PPP services must be ensured.
• Insufficient monitoring of the implementation of PPP projects.

Public-private partnership services would be more in the public interest if project risks are better managed, infrastructure is completed on time, assets are periodically assessed, and all planned services are delivered. These are the results of the audit "Services provided through public-private partnerships" carried out by the National Audit Office.

Public-private partnerships are a way of attracting private capital, knowledge, skills and expertise to deliver services needed by society. At the end of 2023, there were 50 public-private partnership projects under implementation in Lithuania, of which 74% were concessions and 26% were public-private partnerships. The largest number of PPP projects is in the leisure and recreation sector: a camping site in Palanga, a tourism centre in Palūšė, a tourism centre in Zarasai and others.

"Society needs quality transport, education, health, leisure and other services. Public-private partnerships are one of the ways that expand the public sector's financial capacity and help to develop infrastructure, improve the quality of services, and increase their accessibility. To be successful, public-private partnership projects require proper planning, fulfilment of the commitments made by each party to the project, and ongoing cooperation to resolve issues arising during the project. The audit reveals that after investing around EUR 93 million, most of the projects analysed have achieved their planned results, but there is still room for improvement"

The planning and risk management of PPP projects needs to be improved: 92% of the projects assessed did not have risk management plans or risk management tools for the risks attributed to the public entity. The lack of such a plan makes it difficult to manage emerging risks and to deal promptly with problems.

The auditors also found that 13% of the projects did not provide all the planned services, such as a non-operational diving shaft, failure to equip basketball and outdoor tennis courts, etc.

To ensure that state or municipal assets are managed in a sound manner, the public entity should periodically assess the condition of the assets transferred to the private entity and developed during the project, and the results should be documented. In 60% of the projects assessed, the public entity did not carry out an annual assessment of the condition of the assets or document the results of the assessment. The lack of periodic review does not identify changes in the condition of the assets over a year or more and the reasons for them.

The implementation of the recommendations of the National Audit Office will lead to the management of project risks, which will pave the way for the successful implementation of public-private partnership projects.