Public Private Partnership Presentation Transcript
Public Private Partnerships (PPP) How to Nail Pudding onto the Wall* Dr. Peter Parycek Chairman of the Austrian working group "eDemocracy & eParticipation” Austrian Federal Chancellery / ICT-Strategy A-1014 Wien, Ballhausplatz 2 (+43-1) 53115/2574 [email_address]
Public Private Partnerships (PPP) How to Nail Pudding onto the Wall*
Definitions & Models
e-Government PPP Examples
( *Max Kaase, 1983)
Definitions & Models
PPP Historical (USA)
The ‘Water Works Company of Boston’ (USA) is the first PPP – this private company sets up the public water supply in Boston
The National Council for Public-Private Partnerships (NCPPP) founded in the USA.
„ Public-private partnerships are a contractual arrangement whereby the resources, risks and rewards of both the public agency and private company are combined to provide greater efficiency, better access to capital, and improved compliance with a range of government regulations regarding the environment and workplace. The public's interests are fully assured through provisions in the contracts that provide for on-going monitoring and oversight of the operation of a service or development of a facility. In this way, everyone wins – the government entity, the private company and the general public.”
PPP Historical (EU)
In the UK, a number of public projects are supported by private companies – these are called Private Finance Initiatives (PFIs)
In the UK there are 150 PFI Projects , involving GBP 12 billion.
An Anglo-American economic definition: a PPP is a formally regulated cooperation between the public and private sector.
Budäus and Grüning (1996) 6 defining characteristics:
Interaction between public and private sectors
Both partners want to achieve the same aim(s)
Using potential synergies
The partners retain their own identity and responsibility
The cooperation is formally regulated (contract)
Central Tenets for a PPP:
Division of costs and responsibilities
Transparency as a central element of the contract
Sharing the risks
Sharing the responsibility
Both partners contribute their assets
A PPP is more than just know-how, it represents the development of public administration and requires real cooperation or collaboration between the partners involved
In legal terms, there is no definition of a PPP, it is still a „working concept“!
PPP – Positioning
The 4 models represent the extent to which the public administration is involved in the PPP.
The „classic“ PPP: the public body has at least 51% of the share, this is typically used for public water and waste management projects.
BOT-Model (Build Operate Transfer):
The public task is handed over to a private company before any infrastructure is built, the stakeholders are not contractually bound to each other.
TOT-Model (Transfer Operate Transfer):
The public body provides the infrastructure, whilst the private company is responsible for the operation, and is used, for example, with sewage management.
Private companies obtain a franchise with which they fulfill public duties, examples are highway tolls, airports and stadiums.
2. PPP Potential
PPP Advantages for Citizens
Improved, high-quality and customer-friendly services
Citizen and public values are maintained
Taxpayers indirectly benefit from cost-savings
PPP Advantages for Business
Use the available public administration resources, including political support, easier access to aid and financial support
Sharing the risks
Involvement in long-term projects
Using the services developed more than once generates revenues at little further costs
The development of innovative services in cooperation with the public administration leads to new opportunities and new customers
PPP Advantages for Public Administrations
Provide new services and develop new projects
Avoid restrictions normally imposed on public administrations
Easier and quicker to finance a broad range of services
Sharing financial responsibility
Use the available business resources
Knowledge-transfer between the business and the public sector
Awareness in the public sector
Legal requirements and social aspects (e.g. acceptancy)
Uncertainty for personnel and customers
Complex organizational structure with a number of interests (which may clash)
Cannot force customers to use services
Difficult to calculate revenue
Cultural, regional differences
Lack of qualified private companies can lead to problems with the bidding process
Different legal settings and requirements in the public institutions
Legal restrictions (bidding, awarding contracts)
Different expectations and understandings regarding e.g. „productivity", soft skills, speed and planning of a project
Public institutions become dependent on private business, when problems arise these will usually be credited to the public institutions and decrease citizen acceptance
PPP financing can be very difficult and inflexible
Insecurity for one of the partners due to unforeseen events
PPP Criteria for Success
Stakeholder motives and responsibilities have to be agreed on and regularly revised.
Advantageous if one of the partners has previous PPP experience
The planned PPP must be adapted to existing (work) contracts
Transparency: key data, processes and procedures
Fair sharing of the risks
Each partner must be able to bring in its assets
The public institution must adapt to a new changed role
Businesses must realise that public administration may be interested in generating revenue
Partners must not forget what their actual roles are: businesses are profit-oriented and the public administration is responsible for the public interest
PPP MEANS GIVE AND TAKE
PPP Lessons Learned
The partners expectations have to be clearly stated and they have to agree on the aims of the project.
All stakeholders must be involved.
Speed is important.
Avoid belly-button-gazing , involve customers and define what services they want.
3. e-Government Examples of PPP
PPP Examples - ID Bremen
ID Bremen GmbH (2000)focuses on providing specific IT-solutions for regional and local administrations ( www.idbremen.com )
City of Bremen (50.1%)
Safeguard jobs in the region
Encourage service orientation in Bremen
Access to personnel resources
Focus on core business
debis Systemhaus GmbH (49,9%)
Partnership with public administration
Gain ‘Know-how’ for the development of innovative IT-solutions in public administration
PPP Examples – Digitales Nordrhein-Westfalen
An eGovernment Platform integrating regional and local administrations
Whilst the focus used to be on the citizens, this has now shifted onto internal administration and interaction with business ( www.d-nrw.de )
Stakeholders and their interests
A number of public institutions and private companies are already involved, and the project is open for further partners.
Given a high number of partners, there are a many and different interests which have to be brought togethe.
PPP Examples: Defence Electronic Commerce System (DECS)
PPP Examples - Why DECS?
The Ministry of Defence (MOD) procures over £13bn of goods annually from 6,000 organisations ranging from large volume purchases of commodity items to small volume but highly sophisticated major equipment platforms
With such diversity in its supply-chain, the MOD's requirements for eBusiness services are varied and need to operate within a highly secure environment
The Defence Electronic Commerce Service (DECS) provides the eBusiness hub supporting the MOD's future eBusiness strategy by enabling secure Business-to-Business (B2B) services between the MOD, its suppliers and other external agencies, e.g. other Government Departments (OGDs)
PPP Examples - Benefits of DECS
Automation of paper driven processes
Automated payment processes provide quicker payment to suppliers and reduction of internal administrative overheads
Provides management information
Supports other eBusiness enablers e.g. electronic catalogues
Share information with its suppliers in a secure environment
Provides multiple access for industry and OGDs (EDI,RLI, Internet, etc.)
Share information on a selective basis using stakeholder profiles and workflow features
PPP Examples - DECS – Key figures
Over 26,400 orders per month
Up to £75 million per month in value
Over 655 of the MOD’s Trading Partners are connected to DECS
1,500 people use the DECS collaborative services
DECS Bulk Fuel Inventory Solution (BFIS) records the issue of up to 100 million litres of fuel per month
MOD users are located at over 200 sites, with increasing international presence.
PPP Examples - Kommunalnet
Kommunalnet.at is an Intranet for the 2358 municipalities in Austria. It is a working space for the employees of local authorities by providing one portal with all the information, communication, services and applications required to complete their work
The critical factors:
Financing the project
PPP Examples - Kommunalnet – Partner Structure
Public Sector 51%
Austrian Association of Municipalities
Regional Association of Municipalities
Private Sector 49%
No IT partners in the consortium
Interested in cooperation:
Good Practices : assessing application domains and providing demonstrations based on “EU Good Practices”
E-Government Academies : building knowledge, expertise and skills– establishing of eGovernment trainings
Knowledge Net : ensuring sustainability
WeGo Project BOSNIA & HERGOVINA / CROATIA / MACEDONIA / SERBIA
European eGovernment Masterclass 2008
eGovernment Training Methods & Tools
Discuss with European experts the best ways to support government change towards transparency and better services!
Danube University Krems
18.08.2008 - 21.08.2008
Danube University Krems
29.09.2008 - 30.09.2008
Cfp: 15. Mai 2008
Thank you! Dr. Peter Parycek [email_address] (+43-1)53115/2574