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Mike luz on public private partnerships for good governance

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  • 1. Public-Private Partnershipsfor Good GovernanceLocal Government LevelJ. M. LUZAssociate Dean, Center for Development Management,Asian Institute of ManagementPanibagong Paraan for Good Government5 November 2009
  • 2. Public-Private Partnership for Good GovernanceLocal Government Level Outline  Key Questions  Context  Framework of Analysis  Modalities of Participation  Issues  The Future: Opportunities for Local Governments
  • 3. Public-Private Partnership for Good GovernanceLocal Government Level Key Questions  In the face of limited public resources, how to finance and provide for the growing demand (at the LGU level) for more infrastructure, services?  What options exist that could deliver infrastructure or services in a cost-effective manner?  How to finance and support the needed investment?
  • 4. Public-Private Partnership for Good GovernanceLocal Government Level Thesis  Private-Public Partnerships provide a variety of options  Options range from:  Increasing revenues from the private sector for needed investment  Providing in-kind services that augments Local Government  Service contracting  Private spending for identified infrastructure or service
  • 5. Public-Private Partnership for Good GovernanceLocal Government Level The Context: Local Government  Range from First to Sixth Class  LGUs largely dependent on IRA as source of revenues  The lower the income class, the more dependent on IRA  Increasing share of LGU taxes…but never enough to cover demand for more services
  • 6. Public-Private Partnership in Basic Education Service Delivery:Provisioning and Funding Some Issues in Local Governance  Devolution  service delivery  Health  Social welfare  Agriculture  Environment  More demand for local cost-sharing  Education (Local School Board, Special Education Fund)  Disasters  More competition for National Government resources  For share of projects  For timely release of IRA
  • 7. Public-Private Partnership for Good GovernanceLocal Government Level A Response: Private-Public Partnerships  Partnerships are born out of a convergence of interests  To address growing needs or demands of constituent publics  Hypothesis: The Whole (e.g. Partnerships) > sum of the parts (e.g. Sectors’ contribution)  Traditional responses inadequate viz heightened demand or new need  Government not in a position to respond adequately  Markets not able to address needs
  • 8. Public-Private Partnership for Good GovernanceLocal Government Level Private-Public Partnerships: Framework (Organizing Concepts)  The ability of existing institutions (i.e. LGU) to address demand or need Versus  Degree of need or demand  What types of partnerships are needed?
  • 9. Public-Private Partnership for Good GovernanceLocal Government Level Organizing Concepts SUPPLY-SIDE Ability of institutions to deliver STRONG LIMITED DEMAND-SIDE I. Partnership as an II. Partnership Arrangement as a System Heightened Response Effective Demand III. Partnership to strengthen an IV. Partnership existing as a new New or Emerging institution Institution Need articulated Capacity Issues Capability Issues Can institution x deliver enough? Is Institution x able to deliver at all?
  • 10. Public-Private Partnership for Good GovernanceLocal Government Level Organizing Concepts SUPPLY-SIDE Ability of institutions to deliver STRONG LIMITED DEMAND-SIDE II. I. Partnership as Partnership an Arrangement Heightened as a System Effective Demand Response III. Partnership to strengthen an IV. Partnership existing as a new New or Emerging institution Institution Need articulated Capacity Issues Capability Issues Can institution x deliver enough? Is Institution x able to deliver at all?
  • 11. Public-Private Partnership for Good GovernanceLocal Government LevelOrganizing Concepts SUPPLY-SIDE Ability of institutions to deliver STRONG LIMITED DEMAND-SIDE I. Partnership as II. Partnership New or Heightened an Arrangement as a System Effective Demand Response III. Partnership to strengthen IV. Partnership an existing as a new New or Emerging Institution Need articulated institution Capacity Issues Capability Issues Can institution x deliver enough? Is Institution x able to deliver at all?
  • 12. Public-Private Partnership for Good GovernanceLocal Government LevelOrganizing Concepts SUPPLY-SIDE Ability of institutions to deliver STRONG LIMITED DEMAND-SIDE I. Partnership as II. Partnership New or Heightened an Arrangement as a System Effective Demand Response III. Partnership IV. to strengthen an existing Partnership New or Emerging institution as a new Need articulated Institution Capacity Issues Capability Issues Can institution x deliver enough? Is Institution x able to deliver at all?
  • 13. Public-Private Partnership for Good GovernanceLocal Government Level Modalities of Participation  To go beyond mere Government spending (Example: Basic Education)  Increasing revenues for public education (from Non- Government participation)  Providing in-kind services that augments Government spending in education  Service contracting  Increased private spending for education (private education)
  • 14. Public-Private Partnership for Good GovernanceLocal Government Level 1. Increase Revenues for Public Education  Objective: Raise revenues for public education (beyond the national budget)  From Private Sector: Corporate philanthropy through “Adopt-a-School” mechanism  Tax incentives provided by law  From Local Governments: Special Education Fund  1% of real estate taxes collected by LGUs  Through Local School Boards (chaired by the Governor, Mayor)
  • 15. Public-Private Partnership for Good GovernanceLocal Government Level 1. Increase Revenues for Public Education  Bold Ideas: Raise revenues for public education through market mechanisms  Education bond issue  Securitization of school building construction  Securitization of the voucher system
  • 16. Public-Private Partnership for Good GovernanceLocal Government Level 2. Providing in-kind services to augment Government spending in education  Brigada Eskwela  National Schools Maintenance Week (May)  Community voluntarism  minor repair and maintenance of schools (preparatory to school opening)  2003 [2006]  12,533 public schools involved [29,215 schools)  832,000+ volunteer man-days [4.0 million m/days]  Total value of repairs = Estimated P392 Million [P2.0 Billion]
  • 17. Public-Private Partnership in Basic Education Service Delivery:Provisioning and Funding 2. Providing in-kind services to augment Government spending in education  Textbook Count  National Textbook Delivery Program (June-November)  NGO involvement in monitoring deliveries of textbooks  In 2003  30,000+ deliveries (schools and district offices)  37 million textbooks
  • 18. Public-Private Partnership in Basic Education Service Delivery:Provisioning and Funding 2. Providing in-kind services to augment Government spending in education  Textbook Count: Summary of Findings on Deficient Deliveries by Elementary Schools District (Quantity) Zone # Districts # with Delivery % Remarks Errors 3 552 78 14.13 Region VIII (74) 4 538 30 5.58 Region XII (10) 1 500 8 1.60 2 491 15 3.05 NCR (12); Pasig- San Juan (4/4) TOTAL 2,081 125 6.00
  • 19. Public-Private Partnership in Basic Education Service Delivery:Provisioning and Funding 2. Providing in-kind services to augment Government spending in education  PTCA Involvement  Parent-Teacher-Community Associations  Local stakeholders  School feeding programs  Pay for school security, janitorial, utilities  “Adopt-a-School” Corporate Involvement  Corporate tie-ups for facilities improvement  Manila Electric Company  audit of electricals in schools  Manila Water Company  audit of school water systems
  • 20. Public-Private Partnership for Good GovernanceLocal Government Level 3. Service contracting  Government Assistance to Teachers and Students in Private Education (GASTPE)  Voucher-type program  Shift enrolment from public high schools to private high schools  Education Service Contracting scheme (with a subsidy)  For 2004-2005:  325,000 students  1600 private high schools contracted  P1.5 Billion  Managed by the Fund for Assistance to Private Education (FAPE, NGO)
  • 21. Public-Private Partnership for Good GovernanceLocal Government Level 3. Service contracting  Proposals:  Pre-school education service contracting (expansion of the pilot project)  ESC for Madaris Education (Madrasah schools) in Mindanao
  • 22. Public-Private Partnership for Good GovernanceLocal Government Level 4. Private spending for education (private education)  Regulation of private schools  Standards  Consumer protection  As an alternative or option for parents  Possibilities for PPPS  Involvement of private educators in governance  Opening Departmental programs to private schools (teacher training, Educators’ Congress, professional associations)  Opening LSB funding for private education
  • 23. Public-Private Partnership for Good GovernanceLocal Government Level Example: Cost effectiveness of ESC (Education Service Contracting) Scheme  Constructing (traditional DepED solution)…  For every 50 students = 1 classroom = P500,000  For every class = 1.25 teachers = P300,000/year  For every class = 5 subjects x 1 textbook x P75 x 50 = P18,750  For every 50 students = 50 desks x P1000 = P50,000  For every student = P250 in MOOE/year (average) = P12,500  Total = P833,750 start up + P312,500 recurring cost  …versus contracting (ESC)  P6000/year (SY 2009-2010) x 50 = P300,000
  • 24. Public-Private Partnership for Good GovernanceLocal Government Level If possible for Education, why not for other services, needs? 1. Health: Private medical providers  school health as primary target (preventive)  Private hospitals/clinics + LGU health card 2. Garbage collection and recycling 3. Street maintenance (especially in town or city center, business district) by local businesses 4. Disaster response (Local business)  Preparedness (what other evacuation centers available?)  Mitigation (reduce risks)
  • 25. Public-Private Partnership for Good GovernanceLocal Government Level The Future: Opportunities 1. Water  Manila: Assets owned by MWSS; water and sewerage services privatized to Manila Water and Maynilad  Privatize the management of the local water district (If regulated well, the town/city can realize greater efficiencies)  Not a private enterprise, but a public-private partnership 2. Garbage landfill sites  Collection  Disposal  Recycling (business opportunity ) 3. Electricity cooperative  Non-governmental, but many are run like government agencies
  • 26. Public-Private Partnership for Good GovernanceLocal Government Level The Future: Opportunities The KEY: Proper Regulation  Standards + enforcement  Protection of constituents (from a monopoly)  Ensure a stable environment to operate as a partnership The DRIVER: Rules and regulations  Local chief executive is critical, but not the key to success  Partnerships must be sustainable over time (e.g. beyond 3 year terms)
  • 27. Public-Private Partnershipsfor Good GovernanceLocal Government LevelJ. M. LUZAssociate Dean, Center for Development Management,Asian Institute of ManagementPanibagong Paraan for Good Government5 November 2009

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