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Public Private Partnership

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    • 1. 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]
    • 2. Public Private Partnerships (PPP)  How to Nail Pudding onto the Wall*
      • Definitions & Models
      • PPP Potential
      • e-Government PPP Examples
      ( *Max Kaase, 1983)
    • 3.
      • Definitions & Models
    • 4. 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.”
    • 5. 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.
    • 6. 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)
    • 7. 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
    • 8. 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“!
    • 9. PPP – Positioning
    • 10. 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.
    • 11. 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.
    • 12. 2. PPP Potential
    • 13. PPP Advantages for Citizens
      • Improved, high-quality and customer-friendly services
      • Citizen and public values are maintained
      • Taxpayers indirectly benefit from cost-savings
    • 14. 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
    • 15. 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
    • 16. PPP Readiness
      • Awareness in the public sector
      • PPP Readiness:
        • Non-recognition
        • Avoidance
        • Competition
        • Acceptance
        • Cooperation
        • Collaboration
      [3]
    • 17. 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
    • 18. 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
    • 19. 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
    • 20. 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.
    • 21. 3. e-Government Examples of PPP
    • 22. 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
    • 23. 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.
    • 24. PPP Examples: Defence Electronic Commerce System (DECS)
    • 25. 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)
    • 26. 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
    • 27. 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.
    • 28. 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:
        • Political issues
        • Financing the project
        • Partner structure
    • 29. 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
    • 30. 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
      WeGo Project BOSNIA & HERGOVINA / CROATIA / MACEDONIA / SERBIA
    • 31. 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
    • 32. Thank you! Dr. Peter Parycek [email_address] (+43-1)53115/2574

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