Public Private Partnership PPP by raz34238

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									Public Private Partnership
           PPP
         Mahmoud Anbar
       E-business consultant
            Intelecom
       Syrian Arab Republic

          WSIS - Damascus - 22-23 11-2004 By
         Mahmoud Anbar - manbar@scs-net.org    1
      Public-Private Partnership
• A Public-Private Partnership is a contractual agreement
  between a public agency (federal, state or local) and a
  for-profit corporation.
• Through this agreement, the skills and assets of each
  sector (public and private) are shared in delivering a
  service or facility for the use of the general public.
• In addition to the sharing of resources, each party
  shares in the risks and rewards potential in the delivery
  of the service and/or facility.

                      WSIS - Damascus - 22-23 11-2004 By
                     Mahmoud Anbar - manbar@scs-net.org       2
    PPP can make the information
        revolution accessible
• This is the age of information technologies, but there
  can be a hefty cost of getting a system operating.
• Through public-private partnerships, many
  governments are now able to fully participate in "E-
  government" with their constituents, or effectively
  coordinate government activities and budgets.
• Better service, improved tools and saving money are
  exactly what public-private partnerships are all about.
                                             NCPPP USA

                     WSIS - Damascus - 22-23 11-2004 By
                    Mahmoud Anbar - manbar@scs-net.org    3
            Government Faults
• There are few incentives for good performance.
• Lack of good information on performance or customer
  satisfaction.
• Dominance of operations over strategy.
• Difficulty of planning in terms of the ‘outcomes’ of
  public policy.
• Inefficient investment decisions.
• Disenfranchisement of customer and staff stakeholders.
                                      Rob Brown, PA Consulting Group, London

                    WSIS - Damascus - 22-23 11-2004 By
                   Mahmoud Anbar - manbar@scs-net.org                      4
                 Private Sector
•   Profit Motive
•   Focus on particular activity in particular market
•   Investing in developing special skills
•   Try to be competitive in certain industry
•   The possibility of combining the support
    functions for several contracts ( economy of
    scale)

                     WSIS - Damascus - 22-23 11-2004 By
                    Mahmoud Anbar - manbar@scs-net.org    5
Constraints on procurement methods

      Government                      Private

      ‘Lowest price’ on bids ‘best value’


      ‘Proven technology’             newer technologies



limit a government’s ability to access newer
   technologies
                      WSIS - Damascus - 22-23 11-2004 By
                     Mahmoud Anbar - manbar@scs-net.org    6
                 Why PPP
• The public system leads to inertia through
  rewarding behavior that avoids risk.
• Government is obliged to provide better service
  with little or no extra cost
• The public sector is lagging behind private
  sector in reaching and dealing with customers
• Internal Public sector management & resources
  are not sufficient to modernize government
  activities
                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    7
                 Why PPP
• Bidding process ( improve the cost of providing
  the service)
• Incentives for constant improvements of the
  service to the customer
• Traditional contract ( most risk & potential
  reward to supplier), Give customer little
  influence over the way the service is managed
  and evolved
                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    8
               How PPP works
   Reorganizing public body activities into:
       Democratic control
       Operational service delivery
   Democratic control activities consume only
    10% of the staff & Budget of a typical
    government department or local authority



                     WSIS - Damascus - 22-23 11-2004 By
                    Mahmoud Anbar - manbar@scs-net.org    9
                                  •Stakeholders common goals
                  The direct user of
                  the service agrees
                  to :

                 New forms of service
                 delivery
                Better quality of service
The private      Long term commitment                             The public
sector agrees
                   Service flexibility                            sector
to:
                                                                  agrees to:
                     Profit sharing

                New working practices
                      Staff protection


                Front line staff agree to

                                                       PA Consulting Group, London
                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org                            10
             How PPP works
• Align stakeholder interests in a set of common
  goals
• Design incentives that reward collaborative
  behavior
• Enable the private sector to participate in
  business development, rather than simple
  operational cost cutting, and hence saving jobs.


                   WSIS - Damascus - 22-23 11-2004 By
                  Mahmoud Anbar - manbar@scs-net.org    11
   Management By Contract
1. Maintain The integrity of the democratic process
2. Reorganizing public body activities into:
    Democratic control
   Operational service delivery
3. Free public sector from day-to-day concerns
4. Strategists consider policy and service options
5. Re- organize public departments around policy
   themes rather than operational concerns
6. Cost is attributable to output
                 WSIS - Damascus - 22-23 11-2004 By
                Mahmoud Anbar - manbar@scs-net.org    12
                PPP Contracts
• Ensure equitable distribution of risk , reward and
  control
• Long term contract
• Gain sharing:
  Cost differential ( estimated – actual) is shared between
  partners.
• Shared strategic control:
  The public sector have a number of votes ( silver
  bullets ), to ensure that partnership cooperation will
  continue

                     WSIS - Damascus - 22-23 11-2004 By
                    Mahmoud Anbar - manbar@scs-net.org    13
             PPP Advantages
• Better information base for the formulation of
  policy
• Effective decisions on how to apply budgets to
  change priorities:
   (what it costs to improve examination results
   ( output cost) rather than the budgeting of extra
  teachers ( the input cost))


                   WSIS - Damascus - 22-23 11-2004 By
                  Mahmoud Anbar - manbar@scs-net.org    14
                Advantages
• Transparent specification of the required
  service
• Specification of the expected Quality standard
• Performance monitoring capabilities
• Funding suppliers on the basis of unit costs of
  output ( Supplier will challenge poor quality
  work).

                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    15
  Where PPP is recommended
• Where PPP can deliver most benefit for least risk
• The public sector wishes to see business growth
• The public sector wishes to provide improved services
  beyond its own capabilities
• The public sector needs specialist skills honed across
  a range of customers
• Service ( nature, level , quality) can be defined in
  writing
• Radically reconfigure a service to align units from
  across different departments

                    WSIS - Damascus - 22-23 11-2004 By
                   Mahmoud Anbar - manbar@scs-net.org    16
                   TYPES OF PPP
•   Build/Operate/Transfer (BOT) or Build/Transfer/Operate (BTO)
•   Build-Own-Operate (BOO)
•   Buy-Build-Operate (BBO)
•   Contract Services
    Operations and Maintenance
    Operations, Maintenance, & Management
•   Design-Build (DB)
•   Design-Build-Maintain (DBM)
•   Design-Build-Operate (DBO)
•   Developer Finance
•   Enhanced Use Leasing (EUL)
•   Lease/Develop/Operate (LDO) or Build/Develop/Operate (BDO)
•   Lease/Purchase
•   Sale/Leaseback
•   Tax-Exempt Lease
•   Turnkey

                         WSIS - Damascus - 22-23 11-2004 By
                        Mahmoud Anbar - manbar@scs-net.org         17
    Strategy to build PPP Market
• Public monopoly & Private monopoly
• Process of quality assurance
   – ( “PPP enabled” companies only bid for PPP contracts)
   – ( Indication where the market is weak, and new players are
     required)
• Tracking PPP contracts & initiatives across the public
  sector
• Monitoring the market share of different companies
  anticipate any conflict of interests
• When required, reduce entry cost for new or smaller
  players ( packaging services )

                       WSIS - Damascus - 22-23 11-2004 By
                      Mahmoud Anbar - manbar@scs-net.org          18
   Mechanism for accountability
• Between the supplier and the commissioner of
  the service acting on behalf of the democratic
  process
• What is required ,in terms of completed output
  – Nature of the service
  – Level of service
  – Quality of Service


                    WSIS - Damascus - 22-23 11-2004 By
                   Mahmoud Anbar - manbar@scs-net.org    19
Partnership Governance Structure
Partnership Governance committee
• Mechanism and process for managing the
  process of collaboration
• Discussing the strategic direction of PPP at
  regular interval
• Representatives from both sides
• Includes staff and customer representatives

                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    20
                           USA

• Wide range of approaches to PPPs, with little or
  no guidance from the federal government
• National Council for Public Private Partnerships
  (NCPPP)
• NCPPP provides information to legislative and
  regulatory bodies as they craft new laws and
  regulations that affect PPPs
• Membership composed of both public agencies
  and private companies
                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    21
                     Ireland
• Central PPP Unit :(Department of Finance)
• National Development Finance Agency
  (advising on the optimal means of financing
  the cost of public investment projects in order
  to achieve value for money )
• Current guidelines require State authorities to
  refer all projects or grouped projects over
  €20m in value to the NDFA for advice
                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    22
                   NFDA Role
• It will be open to NDFA to assess and recommend:
   – Exchequer funding or private sector funding
   – To arrange funding itself
   – A package involving a combination of both NDFA funding
     and private sector financing.
• PPP/NDFA contribution increase from 3% of total
  investment in 2004 to 15% of total investment in 2008.
  In monetary terms this amounts to €3.6 billion.


                      WSIS - Damascus - 22-23 11-2004 By
                     Mahmoud Anbar - manbar@scs-net.org       23
          Germany PPP program
• German Federal Ministry of Economic Cooperation
  and Development (BMZ) , private sector institutions,
  development cooperation organizations

    236 PPP projects in 60 countries worldwide.
•    74 projects in Asia
•   58 in Africa
•    43 in Latin America
•    41 in East Europe and Balkans
•    20 with rest of the world.

                      WSIS - Damascus - 22-23 11-2004 By
                     Mahmoud Anbar - manbar@scs-net.org    24
   Indo-German Export Promotion
          Project (IGEP)
• responsible for the co-ordination of PPP
  activities in India
• promote PPP concept
• organize information meetings
• Gives assessment of the proposals




                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    25
            PPP Key to success
•   Political leadership
•   Public sector involvement
•   A well thought –out plan
•   Communication with stakeholders
•   Selecting the right partner
    "lowest bid" .vs. "best value“ ( Long term )


                    WSIS - Damascus - 22-23 11-2004 By
                   Mahmoud Anbar - manbar@scs-net.org    26
  PPP Implementation model
Level     Role

Regional Guidelines on the Procedures for the
         Assessment, Approval, Audit and
         Procurement of PPP Projects
National Build & Monitor the PPP market

Project   PPP governance ( managing the
          collaboration process )

                  WSIS - Damascus - 22-23 11-2004 By
                 Mahmoud Anbar - manbar@scs-net.org    27
Thank You

   WSIS - Damascus - 22-23 11-2004 By
  Mahmoud Anbar - manbar@scs-net.org    28

								
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