Public Private Partnership
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Public Private Partnership 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
    • PPP Potential
    • e-Government PPP Examples
    ( *Max Kaase, 1983)
    • Definitions & Models
  • PPP Historical (USA)
    • 1652
    • The ‘Water Works Company of Boston’ (USA) is the first PPP – this private company sets up the public water supply in Boston
    • 1985
    • 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)
    • 1980s
    • In the UK, a number of public projects are supported by private companies – these are called Private Finance Initiatives (PFIs)
    • 1997-2000
    • In the UK there are 150 PFI Projects , involving GBP 12 billion.
  • PPP Definition
    • 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
      • Process orientation
      • The partners retain their own identity and responsibility
      • The cooperation is formally regulated (contract)
  • PPP Definitions
    • Central Tenets for a PPP:
      • Division of costs and responsibilities
      • Transparency as a central element of the contract
      • Sharing the risks
      • Sharing the responsibility
      • Sharing profits
      • Both partners contribute their assets
  • PPP Definitions
    • 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
  • PPP Models
    • The 4 models represent the extent to which the public administration is involved in the PPP.
    • Cooperation Model:
    • 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.
  • PPP Models
    • 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.
    • Franchise Model:
    • 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
    • Increased prestige
    • 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
    • Financial transparency
    • 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
  • PPP Readiness
    • Awareness in the public sector
    • PPP Readiness:
      • Non-recognition
      • Avoidance
      • Competition
      • Acceptance
      • Cooperation
      • Collaboration
  • PPP Issues
    • Legal requirements and social aspects (e.g. acceptancy)
    • Uncertainty for personnel and customers
    • Data protection
    • 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
  • PPP Issues
    • 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 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 ( )
    • 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 ( )
    • 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
    • 5,800 users
    • 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
    • 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:
      • Political issues
      • Financing the project
      • Partner structure
  • PPP Examples - Kommunalnet – Partner Structure
    • Project Partners:
      • Public Sector 51%
        • Austrian Association of Municipalities
        • Regional Association of Municipalities
      • Private Sector 49%
        • AG Kommunalkredit
    • Guiding Principle:
      • No IT partners in the consortium
    • Further Partners
      • IT companies
      • Business partners
      • Federal States
      • Provincal States
  • Interested in cooperation:
    • Interoperability Framework
    • 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
  • Upcoming Events
    • 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
    • E-Democracy Conference
    • Danube University Krems
    • 29.09.2008 - 30.09.2008
    • Cfp: 15. Mai 2008
  • Thank you! Dr. Peter Parycek [email_address] (+43-1)53115/2574