The Treatment of Public-Private Partnership Assets in the GFSM 2001 Framework

This research paper should not be reported as representing the views of the IMF. The views expressed in this paper are those of the author only and do not necessarily reflect those of the IMF or IMF policy. This study aims to contribute to providing guidance in the appropriate treatment of publicprivate partnership (PPP) assets within the Government Finance Statistics Manual (GFSM) 2001 framework. The study concludes that in PPPs where the government is the purchaser of the project outputs and it bears a substantial proportion of project risks, classifying the economic ownership under government would contribute to prudent fiscal management and debt sustainability analysis. Where before governments would recognize the future service payments as mainly expenditure on goods and services as spending accrues, they would now have to record acquisition of the PPP assets and recognize a significant portion of future payments as actual liabilities in the government balance sheet. 1 The author thanks Keith Dublin, Ethan Weisman and Richard Shepherd for providing motivation and guidance for this paper. She also acknowledges the insightful comments of the Government Finance Division-of the IMF’s Statistics Department.