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Public private partnership

  1. 1. Course Name: Introduction to Business<br />Course No # EM-501<br />SUBMITTED TO:<br />Dr. Md. Salim Bhuiyan<br />Professor <br />Department of Management Studies<br />University of Dhaka<br />Date: 21st August 2010.<br />SUBMITTED BY:<br />Santanu PalitRoll no/ID: 3-10-18-004<br />Mohammad Helal Uddin Roll no/ID: 3-10-18-053<br />18th Batch<br />EVENING MBA PROGRAM<br />Department of Management Studies<br />University of Dhaka<br />TABLE OF CONTENTS<br />PART No.TITLEPAGE No.Executive Summary:PART: 11.0 Introduction41.1 Concept of Public-private partnership:41.2 Regarding Public-Private Partnership (PPP)41.3 Reasons for Public-Private Partnership51.4 Key Benefits of Public-Private Partnership51.5 Sectors of PPP in Bangladesh:6PART-22.0 Health Sector62.1 Motivation of the private sector62.2 Public sector tools available to work with the private health sector62.3 Concluding thoughts72.4 The Case for Engaging NGOs in the HIV/AIDS Sector72.5 Cultural competency and innovation72.6 Linkages and knowledge networking72.7 Responsiveness and flexibility82.8 Community mobilization82.9 Accountability and commitment82.10 Cost effectiveness82.11 Challenges to NGO Engagement82.12 Technical capacity92.13 Enabling environment92.14 Competing priorities92.15 Representation92.16 Stigma102.17 Lessons in Effective Partnerships102.18 Overcoming Challenges to NGO Engagement112.19 Key Features Non-Government Involvement in Bangladesh11<br />TABLE OF CONTENTS<br />PART No.TITLEPAGE No.Executive Summary:PART: 33.0 Energy Sector123.1 Energy Resources in Bangladesh123.2 Power situation123.3 Commercial Energy Crisis123.4 Renewable Energy Resources123.5 IDCOL Solar Energy Programmed143.6 Benefits143.7 Findings143.8 Recommendations14PART: 44.0 The Spectrum of Relationship in PPP154.1 Who are the Partners?154.2 Judging Effective Partnership164.3 Criteria for Judging Effective PPP164.5 Public-Private Partnership and SAI Bangladesh164.6 Clear distinction between the roles and responsibilities of the public and private sectors174.7 Obstacles174.8 Lack of communication between the public and private sector184.9 Potential Misconceptions184.10 Possible Messages184.11 Recommendations194.12 Conclusion19<br />PART -1<br />1.0 Introduction:<br />Over the past two decades, political and public service leadership around the world has included the forging of innovative arrangements described as public-private partnerships (P3s). Although the term P3s is often applied only to collaborative arrangements between public organizations and business firms, it is also interpreted more broadly to cover public sector partnerships with a wide range of organizations outside of the public sector, including such entities as community, voluntary and non-governmental organizations (NGOs). Since the term is sometimes used loosely to refer to virtually all types of interaction between the public and private sectors, a brief definition is required. Nowadays PPP is a very common and important term in our country, Bangladesh. It is opening a new horizon of success in many sectors of Bangladesh.<br />1.1 Concept of Public-private partnership:<br />Joint initiatives developed, executed, and managed<br />Public sector Agency <br />Private sector entity<br />Common Goals andIndividual Objectives<br />1.2 Regarding Public-Private Partnership (PPP):<br />Definition of PPP:<br /><ul><li>A partnership can be defined as the pooling of resources like labor and money by organizations that share decision-making power, risks, and benefits in the pursuit of compatible objectives. It is this sharing that distinguishes a PPP from other relationships between the public and private sectors, including the traditional contractual arrangement whereby a public organization pays for the delivery of products or services. However, many PPPs are formalized by a contract. Scholars have classified PPPs in various ways, but partnerships involving power-sharing are often termed “real,” or “collaborative,” partnerships, whereas those involving a sharing of only work or resources are described as “operational” partnerships. PPPs vary greatly in their purposes and participants.</li></ul>PPP is a contractual agreement formed between a public agency and private sector entity<br />PPP allows greater private sector participation in the delivery of services <br />PPP allows the public agencies to tap private sector technical, management and financial resources to achieve certain public agency objectives such as <br />Greater cost and schedule certainty,<br />Supplementing in-house staff,<br />Innovative technology applications,<br />Specialized expertise or access to private capital. <br />1.3 Reasons for Public-Private Partnership:<br />Accelerating the implementation of high priority projects by packaging and procuring services in new ways.<br />Turning to the private sector to provide specialized management capacity for large and complex programs;<br />Enabling the delivery of new technology developed by private entities;<br />Drawing on private sector expertise in accessing and organizing the widest range of private sector financial resources;<br />Encouraging private entrepreneurial development, ownership, and operation of related assets;<br />Allowing for the reduction in the size of the public agency and the substitution of private sector resources and personnel.<br />1.4 Key Benefits of Public-Private Partnership:<br />PPP provides benefits by allocating the responsibilities to the party – either public or private – that is best positioned to control the activity that will produce the desired result<br />The primary benefits of using PPP to deliver services include:<br />Expedited completion compared to conventional delivery methods<br />Cost savings<br />Improved quality and system performance from the use of innovative materials and management techniques<br />Substitution of private resources and personnel for constrained public resources and<br />Access to new sources of private capital.<br />How are risks and rewards allocated in public-private partnership?<br />Risks are allocated to the party that is the best equipped to manage them<br />PPP contracts often include incentives that reward private partners for mitigating risk factors<br />Promoting Public-Private Partnership in Bangladesh:<br />Fast changing policy situation with globalization and deregulation recognizes increasingly important role of private sector in Bangladesh <br />Bangladesh has a very rich experience on PPP, especially in respect of the scope and diversity of Non-Government Organization (NGO) activities in social service.<br />1.5 Sectors of PPP in Bangladesh:<br />Health Sector<br />Education Sector<br />Infrastructure Development<br />Tourism Sector<br />ICT Sector<br />Industries<br />PART -2<br />2.0 Health Sector:<br />2.1 Motivation of the private sector:<br />Private health sector providers need to earn a profit to stay in business<br />Are motivated by other factors common to public sector <br />Pride in skills and competency<br />Sense of professionalism<br />Desire to improve health of patients and community<br />Social mission<br />Strategic relations with local government<br />Public sector has more in common with private sector than you think<br />2.2 Public sector tools available to work with the private health sector:<br /><ul><li>Financing</li></ul>•Health insurance<br />•Community based finance schemes<br />•Vouchers<br />•Tax exemptions<br /><ul><li>Regulation of private (& public sectors)</li></ul>•Licensing<br />•Accreditation<br />•Certificate of need<br /><ul><li>Contracting</li></ul>•Leasing<br />•Concessions<br />•Divestitures<br />2.3 Concluding thoughts:<br />The private sector is already playing an important role in health care provision and this role will continue to expand significantly. Private sector is an untapped resource but there are many challenges. To harness the private sector will require changing roles, MOH leadership & help. It is time to bring the private sector into the fold as partners to provide Quality health services<br />2.4 The Case for Engaging NGOs in the HIV/AIDS Sector:<br />Local NGOs around the world have demonstrated their capacity to mobilize communities and to act as intermediaries for a wide variety of population groups. NGO responses are increasingly recognized as critical in tackling the HIV/AIDS pandemic. NGOs are often far more efficient and effective at providing services than state agencies.<br />In responding to the HIV/AIDS pandemic, local NGOs bring a collection of experiences, technical capabilities, and connections that make them indispensable. NGOs often have a comparative advantage in responding to the complex and evolving landscape of HIV/AIDS. The strengths of local NGOs contribute significantly to their successes and the sustainability of their activities can be derived in one way or another from the close connection that the organizations have with the populations they serve.<br />2.5 Cultural competency and innovation:<br />Most NGOs have a thorough understanding of local communities; they know the details of local constraints and issues and can effectively prioritize problems within their context. Local NGOs know how HIV/AIDS is understood and viewed in a particular community or sub-set of a community, and they can talk about it and initiate actions in ways that are understood by the community and deemed appropriate and acceptable.<br />Local NGOs often have a comparative advantage over governments, INGOs, and donors in their ability to inspire behavioral change, shape public discourse, and draw local attention to HIV/AIDS and the actions needed to combat it. By utilizing their comprehensive understanding of social, political, religious, and economic circumstances, local NGOs are often best prepared to identify new approaches and design new activities to locally resolve specific problems.<br />2.6 Linkages and knowledge networking:<br />Local NGOs are uniquely positioned to initiate and establish close working relationships with other locally based groups in the public, private, and voluntary sectors. Partnerships and collaborations among different institutions allow local NGOs to focus on more specialized programmatic areas and enhance their ability to increase referrals to other NGO and governmental services. These partnerships also encourage networking, sharing best practices, and mentoring, thus encouraging more local ownership.<br />2.7 Responsiveness and flexibility:<br />Based on their size, operating structure, and connection to the communities they serve, most local NGOs are in a better position than government bureaucracies to respond quickly to identified needs and opportunities at the community level. These characteristics also allow NGOs to respond flexibly to the complex and rapidly evolving pandemic, make mid-course adjustments as necessary, and tailor existing programs to local realities. For these reasons, local NGOs are able to rapidly scale up community programming and quickly and efficiently engage their communities to address HIV/AIDS-related advocacy issues.<br />2.8 Community mobilization:<br />Many NGOs use their strong connections with beneficiary populations to garner community investments for interventions being undertaken. NGOs are among the strongest supporters and practitioners of methodologies that encourage local participation. Local NGOs have demonstrated their effectiveness in using participatory tools such as community mapping, focus groups, and participatory evaluation.<br />2.9 Accountability and commitment:<br />Many of the NGOs involved in HIV/AIDS programs employ individuals who have been personally affected by the pandemic. Their commitment to making a difference is apparent in their passion and degree of involvement. Leaders of local NGOs have often worked in the health sector in their communities. These dynamic leaders can easily gain the respect and trust of both beneficiaries and local health care and other support service providers. These leaders may also assist in the reduction of the stigma surrounding HIV/AIDS by:<br />Involving people living with HIV/AIDS in stigma research and program design and evaluation;<br />Empowering communities to address stigma through awareness of accurate and updated information about HIV/AIDS and accompanying stigma;<br />Integrating and/or mainstreaming HIV prevention, care, treatment, and support activities into existing programs and facilities whenever possible;<br />Promoting legal and policy environments that keep stigma and discrimination in check;<br />Developing more practical tools for understanding and addressing the stigma;<br />Creating an environment that promotes stigma reduction within healthcare facilities, i.e., one that includes training, sensitization, and performance standards <br />2.10 Cost effectiveness:<br />Local NGOs are often embedded within local communities and economies in such a way that they can provide services and assistance at a fraction of the cost that would be needed if the private sector or government entities were to implement the same programs. Activities targeted at individuals and families are often efficiently implemented by linking complementary services at different levels with each organization carrying out actions from their own sites.<br />2.11 Challenges to NGO Engagement:<br />Most of the identified weaknesses and criticisms revolve around aspects of institutional capacity and limited scale impact. However, these criticisms often fail to recognize the broader infrastructure problems inherent in many developing countries that inhibit the growth and capability of the NGO sector. While many of the critiques of local NGOs are valid, it is not always sufficiently recognized that the most effective way to increase capacity is through practice. In planning for assistance, it is helpful to recognize the limitations and weaknesses that NGOs often struggle with. The key to becoming a more effective organization is to be able to identify their own weaknesses.<br />2.12 Technical capacity:<br />The burden of providing effective HIV/AIDS services, particularly to marginalized groups, often falls on NGOs that may or may not have sufficient resources, experience, and tools to address the vast needs in their communities in a way that would be considered adequate from a public health perspective.<br />The myriad of skills expected from local NGOs is daunting and an area of increasing concern particularly in the complex situation of responding to the HIV/AIDS pandemic in resource-constrained settings. NGOs are expected to provide professional, community-based services in conjunction with professional monitoring, evaluation, and reporting. All of this is expected with scarce resources, inadequate access to technical assistance or standards, and little to no government guidance or support.<br />Replication or scale-up becomes a significant problem because it is difficult for NGOs to obtain sufficient infrastructure and staff to expand. Many local NGOs suffer from “brain drain” as trained professionals are hired away from their home communities by NGOs paying higher salaries. As a result, attracting and sustaining fully qualified and trained staff is yet another challenge.<br />2.13 Enabling environment:<br />Many developing country governments have looked suspiciously upon civil society and NGOs as dissident political forces rather than complementary partners in development planning and implementation. While this is changing in many parts of the world, unfavorable legal, regulatory, and tax constraints continue to exist in many countries. Implementation of the necessary reforms may be extremely difficult in situations where government institutions and NGOs are competing for scarce assistance resources; there are genuine philosophical or programmatic differences, or a difference of opinion about the need for urgency.<br />2.14 Competing priorities:<br />International NGOs inherently have greater access to resources than most national and local organizations and this access can give them the luxury of becoming strategically focused and donor-specific. Local and national NGOs on the other hand must often hop from project to project, frequently with different objectives and approaches, to keep the revenue flowing. This can limit their ability to focus and concentrate on becoming institutions of excellence in a particular service delivery area. The structures and values of NGOs can come to mirror those of the donor, and NGOs can face pressure from a donor to conduct a project in a manner that would compromise an NGO’s principles.<br />2.15 Representation:<br />One result of the substantial increase in the amount of interest, attention, and resources being devoted to NGOs in the HIV/AIDS arena is that NGOs are being created without all of the traits and characteristics that give these institutions their comparative advantage.<br />Many NGOs become more akin to consulting firms than civil society organizations. These organizations may be composed of very smart and capable<br />Individuals, but they are often pursuing their own income-generation and diversification strategies rather than more altruistic objectives like community empowerment and development.<br />2.16 Stigma:<br />Receiving increased donor funding may give the NGO and community more visibility and, in some cases, increased stigmatization particularly for those NGOs that serve marginalized populations, such as sex workers, men who have sex with men, and injecting drug users. Increased stigma may lead people living with HIV/AIDS to become severely demoralized and depressed.<br />2.17 Lessons in Effective Partnerships:<br />Elicit input from stakeholders:<br />Solicitation documents or program planning strategies those come out of an analysis of the operating environment and the input of stakeholders result in effective programs. Stakeholders provide valuable input into the criteria for partner selection in a particular context. Clear expectations and priorities articulated by donors in solicitations and planning meetings help organizations determine if this is the right opportunity for them and sets up the ground rules for a mutually beneficial relationship.<br />Make sure that partnerships are flexible:<br />The most fundamental constraint to effective partnership is the intrinsically hierarchical nature of the donor-NGO relationship and the one-way flow of money from donor to local NGO to community.<br />Donors have requirements that include standard proposal procedures, report formats, duration, expectation of time-bound results, and a number of others. On top of these, the NGO has its own established structures, procedures, and requirements. It is imperative that donors recognize the strains that local NGOs face and the difficulties they have in becoming learning organizations while, at the same time, trying to make ends meet. Room must be made to accommodate a previously established local NGO structure and procedures within donor reporting requirements.<br />Create relationships of trust:<br />Competing priorities must be accommodated in a relationship in which both donors and NGOs expect mutual trust, respect, flexibility, transparency, and responsiveness to poor communities. Donors must display trust in local partner organizations to effectively plan interventions and target beneficiaries in their own communities. The ability and willingness of a donor to partner with a local NGO as a colleague and peer providing advice and assistance in managing funding is much more effective than simply “funding” the local NGO.<br />Enhance self-awareness:<br />In learning more about the characteristics of a particular NGO, a donor can help the NGO to learn about itself and how it can grow as an organization. Through a participatory approach, donors can help NGOs assess their needs and provide resources, technical assistance, and support to increase the ability of NGOs to provide effective and efficient services.<br />Donors should seek information from local NGOs regarding their missions, prior experiences, program maturity, technical expertise, absorptive capacity, financial capacity, internal organizational environment, and how they fit within the larger HIV/AIDS landscape of NGOs and the government.<br />2.18 Overcoming Challenges to NGO Engagement:<br />Encourage multi-year and diversification of funding:<br />Donors should recognize that NGOs vary. Diversifying funding among different types of NGOs and funding levels may increase their effectiveness at reaching their goals. Donors should allow and encourage local NGOs to diversify their sources of support to encourage the project’s future sustainability. Donors should also consider multi-year grants that are based on need rather than on funding cycles. Additionally, donors need to be aware that their funding may increase unrealistic expectations of local NGO staff, beneficiaries, and the community.<br />Short-term financing, in particular, places an undue burden on local NGOs to achieve unrealistic goals within a limited time frame and prevents local NGOs from investing in long-term planning.<br />Encourage NGOs to fully assess primary and secondary effects of increased funding:<br />Successful engagement by local NGOs happens when local NGOs willingly align their goals and missions with donor funding. NGOs need to recognize the positive and potentially negative consequences that increased funding will bring. They need to make a conscious decision to move to the next level. Once engaged with an INGO, local NGOs need to capitalize on the opportunity and use the increased funding and visibility to leverage additional funding and advocate for themselves and those they serve.<br />2.19 Key Features Non-Government Involvement in Bangladesh:<br />In the Health Sector of Bangladesh the following key features of the partnership identified:<br />In the total national effort to provide for health services, the government is a minor actor in terms of the total health expenditures and peoples’ utilization of services, contrary to general impressions<br />It is evident that non-governmental organizations active in health and family planning have been engaged in: <br />a major collaborative relationship with the public sector services; or <br />Have run their own complementary programs.<br /> In case of public sector health care and family planning services:<br />their quality does not generally meet a minimum acceptable standard; <br />they have widespread reputation of mismanagement, corruption, inefficiency, and of being devoid of a friendly service-provider attitude<br />The public facilities are utilized considerably below their expected capacity.<br />Preventive and basic curative care provided by NGOs are generally regarded as:<br />more effective<br />more client-friendly and <br />utilized more frequently than public facilities<br />The private sector service providers in health account for three-quarters of all health sector expenditures<br />PART -3<br />3.0 Energy Sector:<br />The role of public private partnership in renewable energy sector:<br />3.1 Energy Resources in Bangladesh:<br />ResourceNet Recoverable ReserveProduction/SupplyCoal281 million tones310,000 tons/yearCrude Oil5.5 million barrels(June, 93)16.4 tones/day (June, 93)Natural Gas15.4 TCF (June’2001)1250 MMCFD (April’2004)Natural Gas Liquid45.4 million barrels (June’2003)532 tones/day<br />(Source: MPEMR, 2004 p.64)<br /> <br />3.2 Power situation:<br /> <br /><ul><li>Total Installed capacity: 5230 MW
  2. 2. Actual production :3500-3800 MW in peak time
  3. 3. Actual demand in peak time: around 6000 MW (grid connected area)
  4. 4. Power shortage: 1500 MW to 2500 MW
  5. 5. Access to electricity : 40%</li></ul>3.3 Commercial Energy Crisis:<br /><ul><li>About 85% of electricity produced from Gas
  6. 6. Huge number of industries are using gas as fuel and raw materials
  7. 7. Current proven gas reserve is only 8 TCF
  8. 8. In business as usual scenario, it is expected that within 2011-15 proven gas reserve will be finished
  9. 9. Already government is going slow for new gas connection</li></ul>3.4 Renewable Energy Resources:<br />Biomass:<br /><ul><li>Fuel wood :8 million m3/y
  10. 10. Agricultural Residues :12,021,201 metric ton
  11. 11. Animal Dung: 27,202,000 tons
  12. 12. Baggage, rice husk</li></ul>Biogas: <br /><ul><li>22 million cows and buffaloes produce 2.97XIO9 cubic meter of gas equivalent 3.04 million tons of coal
  13. 13. 4 million biogas plants can be installed
  14. 14. Poultry farms can produce aggregate 100 MW using biogas based electric generator.</li></ul>Source:<br />Hydropower:<br /> <br /><ul><li>Existing :230 MW (extension of Karnafuli hydro 100 MW proposed)
  15. 15. 210 MW can produce from Sangu and Matamuhuri rivers
  16. 16. Assessment of selected rivers in the Northeast Region :161 MW</li></ul> <br />Solar Energy:<br /> <br /><ul><li>More optimistic research –up to 4 million households
  17. 17. More than 150000 Solar Home System (SHS) is installed up to 2007</li></ul>Source:<br />Public-Private Partnership in Renewable Energy Contents three basic characteristics:<br /> <br />1) Shared goals;<br />2) Shared or complementary resources such as financial capital, political influence, knowledge and expertise, human capital, or time; and<br />3) Shared risks and benefits.<br />A successful public private partnership should fulfill three conditions at a minimum:<br /> <br />a) Benefits for private sector: generate a profitable revenue stream or expand market access.<br /> <br />b) Benefits for the consumer: deliveries of services that people want and would not have access to at the same price, in a business as usual situation.<br /> <br />c) Benefits for the government: fulfillment of a political need, social obligation, development imperative.<br />Some points about PPP:<br /><ul><li>In renewable energy sector in Bangladesh, government, private organizations/ companies and some NGO are working with the help of donors.</li></ul> <br /><ul><li>So far to achieve individual goals for both public and private have their own projects.</li></ul> <br /><ul><li>Now its time for work together to get better result .so PPP is essential.</li></ul>3.5 IDCOL Solar Energy Programmed:<br />The Model of renewable energy PPP in Bangladesh<br /> <br /><ul><li>To promote solar home systems (SHSs) is being jointly financed by the IDA, GEF, KFW, and GTZ mainly on off-grid area.</li></ul> <br /><ul><li>15 partner private organizations (POs) are implementing the project</li></ul> <br /><ul><li>For remote places government can’t supply electricity for high cost grid. So government assures all kind of incentives for the project within the legal framework and support from local government administration.</li></ul>3.6 Benefits:<br /> <br />Pos and other private companies: with the ability to import tax-free, POs are expecting very short period of pay back. Other companies sell their other electricity consuming appliances.<br /> <br />Government: enable services to reach a previously subserviced population. The investment burden is shifted to the private sector. The cost and time is reduced.<br /> <br />Public: have electricity services. For longer installment and low interest rate, their monthly costs for light, radio etc are the same but the new service is more stable and modern.<br />3.7 Findings:<br /><ul><li>The main source of Commercial Energy is natural gas and natural gas reserve may be finished within very short time.</li></ul> <br /><ul><li>There is potential using renewable energy to reduce the demand and supply gap of energy in future.</li></ul> <br /><ul><li>Only government or private sector can’t solve the incoming energy crisis of the country</li></ul> <br /><ul><li>Concept of PPP is widely used in many countries. It is proven that PPP concept could help to get access energy to the poorer section of the people using renewable energy.</li></ul> <br /><ul><li>Government has to take initiatives in policy level to address PPP.</li></ul>3.8 Recommendations:<br /> <br /><ul><li>Special financing banking schemes that would offer long-term, low-interest loans for the users of the systems have to be developed.</li></ul> <br /><ul><li>Emphasis should be given to private decentralized/ renewable energy projects to supply isolated areas and/or to access the power.</li></ul> <br /><ul><li>Facilitation of public-private partnerships in the RE sectors should be taken by government.</li></ul> <br /><ul><li>Awareness about PPP concepts and an understanding of the role that different government departments need to be developed.</li></ul> <br /><ul><li>Training programs on the role of PPP would increase in the awareness and understanding.</li></ul>PART -4<br />4.0 The Spectrum of Relationship in PPP:<br />Parallel activities: Public and private activities are carried out without any contact with each other or acknowledgement of the existence of each other<br />Competitive activities: The activities in the public and private sectors are carried out with same or similar objectives, targeting common clientele and competing with each other, which may mean either wasteful duplication of activities or enlargement<br />Complementary activities: Activities or services from the public and the private sectors complement each other in terms of nature and content of services or geographical and population coverage, either by design or incidentally<br />Contractual services: The government contracts private sector for providing specified services for agreed fees, with the contractor being accountable to the government authority. <br />Cooperation and collaboration: Public and private actors work together on the basis of shared objectives, strategies and agreed criteria regarding assessing process and outcome; the partners also cooperate in developing common objectives and strategies and criteria for assessment of activities.<br />4.1 Who are the Partners?<br />Public Sector Partners:<br />National government<br />District administration<br />Municipal authorities<br />Local government bodies<br />Para-statal corporations<br />State universities and research organization.<br />Private Sector Partners:<br />Commercial for-profit enterprises <br />Development-focused voluntary non-governmental organizations (NGOs)<br />Cooperative societies<br />Community-based organizations<br />Religious organizations<br />Professional organizations<br />Trade unions<br />Research and academic institutions<br />Households<br />4.2 Judging Effective Partnership:<br />The principles of “non-rivalry” and “non-exclusion” of public goods logically point to the criteria of universality and equity in judging the value of partnership <br />Given the competing demands on scarce resources in developing countries, efficiency in terms of optimal benefits from a given cost must be an important criterion<br />Accountability to various stakeholders regarding objectives, process and outcome in basic social services also is a key consideration<br />In other words, <br />universality<br />equity<br />efficiency and <br />accountability of basic services are the four sets of criteria for judging the design and the results of partnership <br />4.3 Criteria for Judging Effective PPP:<br />Universality <br />refers to access for all who are eligible to a type of service; for example, universal primary education for all children in the primary-school age group <br />Equity <br />is an elaboration of the universality criterion in terms of ensuring acceptable quality of service for all; sharing of costs equitably when a cost is necessary to be imposed; and special attention to groups disadvantaged due to historical, economic or cultural reasons <br />Efficiency <br />Have two aspects. Internal efficiency in terms of operations and management of an activity to achieve maximum output for the least cost; and external efficiency in terms of achieving best results in terms of objectives of the activity for the least cost <br />Accountability <br />Refers to holding the providers of services answerable to the beneficiaries and other stakeholders regarding both process and outcome of a program. Openness and transparency in management and a participatory approach in planning, making key decisions, and evaluation are necessary conditions for accountability<br />4.5 Public-Private Partnership and SAI Bangladesh:<br />The audit mandate of the SAI Bangladesh with regard to audit of PPP is clear. All PPP, where the government has a majority interest are within the purview of audit of SAI Bangladesh<br />The formidable task in this audit is the minimization of risks, which is achieved through comprehensive audit plan<br />The SAI is very careful in assessing the capacities of the private sectors in delivering the “public goods” through partnership<br />A public-private partnership within the SAI itself in terms of cooperation with the professional accounting bodies and hiring of private sector experts is also being contemplated in this type of audit.<br />4.6 Clear distinction between the roles and responsibilities of the public and private sectors:<br />Particularly in the area of health, it’s noted that “there is a huge ambivalence about dealing with the private sector” as it relates to roles and responsibilities. The main responsibility of the public sector should be in providing a favorable policy environment which promotes public-private partnerships.<br />• The private sector has an important role to play for profit and not for profit but not the same as the public sector.<br />• Through a clear distribution of the roles between the public sector (Ministry of Health ) and the private sector (especially at the community level).<br />• The private sector takes advantage of the public sector unless there are strong systems in place to guard against misuse.<br />4.7 Obstacles:<br />There are institutional, operational, political and cultural obstacles which need to be overcome. For example, at the operational level there is an absence of a mechanism for the implementation of PPPs and at the cultural level there is a perception that health services are a medical concern and therefore communities are not involved in the implementation of such services. And at the political level, some politicians in the field perceive certain associations or NGOs (private sector) as rivals.<br />There is an absence of real political commitment, policy and framework for PPPs at the national level. The public sector needs to develop sound frameworks in which partnerships with the private sector (for-profit or non-profit) and NGOs can be enhanced. At this point, there seems to be a lack of clear operational frameworks in place which allow for PPP work. There also seems to be a lack of capacity, especially in the public sector to implement the necessary health policies. The private sector in some countries is also not strong enough to meet the increase in demand for health service delivery. A communication strategy should highlight the importance for developing such policies and frameworks.<br />Mechanisms must be developed where the two sectors jointly participate in the planning process of programs.<br />• Private sector should be fully involved including in the identification/ selection of the priorities and the evaluation of the final outcome<br />• Through a direct and concrete integration of the private sector within the health<br />Programs (design of the program, implementation, etc)<br />• The private sector itself also needs to be educated on ways of working with the government without undue influence from them. They should be part and parcel of the policy formulation team.”<br />• “Collaboration instruments to find ways to work with the private sector so it isn’t just a vendor or contractual relationship but really a joint planning and joint funding of activities.<br />4.8 Lack of communication between the public and private sector:<br />They need to listen to each other and to cope with one another’s different approaches. There are instances where the public and private sector will be working side by side with no communication as to what each one is doing and it seems that the individual is the one who loses out. For example, “the largest referral hospital has patients lying on the floor for lack of space, while the nearby largest private hospital  …will have empty beds.” The two sectors can really learn from each other.<br />“From the private sector- the management strategy which they use is more efficient and effective and is something ignored in the public sector. The issues of management, leadership and transparency are something to admire.” The public sector can set the priorities to achieve health goals. This is an area where a communication strategy can promote dialogue between the sectors.<br />4.9 Potential Misconceptions:<br />There seem to be some misconceptions about PPP which need to be addressed in a communication strategy. And many times these misconceptions can lead to road blocks in PPP expansion as people are reluctant to engage in a fruitful dialogue. Some of the important misconceptions identified are on perceptions of the private sector. “There is a misconception in understanding the private sector. They feel it is a way of getting more money, getting better salaries. They do not see the real issue is not the salary but the effectiveness and using the best we have possible.”<br />Specifically, there is great fear of working with the for profit private sector. The concern seems to be that if partnerships were created between this and the public sector- it would lead to more corruption. The profit motive would lead to increased bribery and kickbacks. “Suspicion of the profit-making motive in health.”<br />4.10 Possible Messages:<br />The health system needs to be considered in its entirety. Working with the public sector alone will not achieve much progress. By engaging the private sector, there will be optimizing use of limited resources. Specifically looking at how health problems in developing countries, there are needs to look at a multi-sectoral approach, and involving the private sector on some of these issues to focus on sustainability.”<br />The potential of the private sector can be harnessed to increase coverage and quality of health services- especially to the poor. Data from many countries show that many of the poorest go to the private sector for health services. “The benefit is higher coverage reaching the maximum number of people with a high quality of services.”<br />The public and private sector – each has its own comparative advantage. If both sectors were to work together – with the public sector providing a policy framework for the population and the private sector providing management and capacity, countries can come close to reaching the MDGs.<br />Implementing or expanding PPPs does not translate into increased health care costs. National economies and specifically health costs will improve with private sector partnerships.<br />The role of the public sector does not diminish in working with the private<br />Sector. There is a misconception that the private sector will take over the responsibility of the public sector if PPPs were institutionalized.<br />“Investing in the private sector is not necessarily at the expense of the poor or disenfranchised. By engaging the private sector, you have the potential to increase access to critically needed services and goods that otherwise would not be available. The private sector, through either its manufacturing or delivery capability are better positioned to deliver than the public sector, so its not at the expense of anyone and it’s a win-win situation.”<br />“What you get (health service) is more important than who delivers it.” The quality of health care service is more important than the source of its delivery. By partnering with the private sector you are increasing access to good quality care.<br />4.11 Recommendations:<br /><ul><li>Redefine the relationship between public & private involvement in infrastructure projects;
  18. 18. Encourage closer cooperation between public and private sector.
  19. 19. Promotional actions to be launched by government for PPP to attract private sector.
  20. 20. Creation of One-Stop-Service for PPP
  21. 21. Strengthen Board of Investment (BOI) to attract, involve and facilitate the PPP.</li></ul>4.12 Conclusion:<br />The Government is trying to attract private sector in infrastructure projects like Highways, Expressways, including mass-transit, flyovers, bus terminal, Airport terminal, aviation sector, ports, Railway rural infrastructure & services etc. Bangladesh is a prospective market for foreign investors, since the opportunities are abundant; and the legal, administrative and fiscal conditions are supportive. The concerned Ministries, agencies, as well as the Chambers of Commerce & Industry will extend all kinds of support and cooperation to assist foreign/private investors to participate in various construction/infrastructure development projects in Bangladesh. The Government is going to approve the Multi Modal Transport Policy where there is a clear cut directives to encourage and facilitate private sector to invest in the infrastructure sectors in a bigger way.<br />