Public Private Partnership


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  • Public Private Partnership

    1. 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. 2. Public Private Partnerships (PPP)  How to Nail Pudding onto the Wall* <ul><li>Definitions & Models </li></ul><ul><li>PPP Potential </li></ul><ul><li>e-Government PPP Examples </li></ul>( *Max Kaase, 1983)
    3. 3. <ul><li>Definitions & Models </li></ul>
    4. 4. PPP Historical (USA) <ul><li>1652 </li></ul><ul><li>The ‘Water Works Company of Boston’ (USA) is the first PPP – this private company sets up the public water supply in Boston </li></ul><ul><li>1985 </li></ul><ul><li>The National Council for Public-Private Partnerships (NCPPP) founded in the USA. </li></ul><ul><li>„ 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.” </li></ul>
    5. 5. PPP Historical (EU) <ul><li>1980s </li></ul><ul><li>In the UK, a number of public projects are supported by private companies – these are called Private Finance Initiatives (PFIs) </li></ul><ul><li>1997-2000 </li></ul><ul><li>In the UK there are 150 PFI Projects , involving GBP 12 billion. </li></ul>
    6. 6. PPP Definition <ul><li>An Anglo-American economic definition: a PPP is a formally regulated cooperation between the public and private sector. </li></ul><ul><li>Budäus and Grüning (1996) 6 defining characteristics: </li></ul><ul><ul><li>Interaction between public and private sectors </li></ul></ul><ul><ul><li>Both partners want to achieve the same aim(s) </li></ul></ul><ul><ul><li>Using potential synergies </li></ul></ul><ul><ul><li>Process orientation </li></ul></ul><ul><ul><li>The partners retain their own identity and responsibility </li></ul></ul><ul><ul><li>The cooperation is formally regulated (contract) </li></ul></ul>
    7. 7. PPP Definitions <ul><li>Central Tenets for a PPP: </li></ul><ul><ul><li>Division of costs and responsibilities </li></ul></ul><ul><ul><li>Transparency as a central element of the contract </li></ul></ul><ul><ul><li>Sharing the risks </li></ul></ul><ul><ul><li>Sharing the responsibility </li></ul></ul><ul><ul><li>Sharing profits </li></ul></ul><ul><ul><li>Both partners contribute their assets </li></ul></ul>
    8. 8. PPP Definitions <ul><li>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 </li></ul><ul><li>In legal terms, there is no definition of a PPP, it is still a „working concept“! </li></ul>
    9. 9. PPP – Positioning
    10. 10. PPP Models <ul><li>The 4 models represent the extent to which the public administration is involved in the PPP. </li></ul><ul><li>Cooperation Model: </li></ul><ul><li>The „classic“ PPP: the public body has at least 51% of the share, this is typically used for public water and waste management projects. </li></ul><ul><li>BOT-Model (Build  Operate  Transfer): </li></ul><ul><li>The public task is handed over to a private company before any infrastructure is built, the stakeholders are not contractually bound to each other. </li></ul>
    11. 11. PPP Models <ul><li>TOT-Model (Transfer  Operate  Transfer): </li></ul><ul><li>The public body provides the infrastructure, whilst the private company is responsible for the operation, and is used, for example, with sewage management. </li></ul><ul><li>Franchise Model: </li></ul><ul><li>Private companies obtain a franchise with which they fulfill public duties, examples are highway tolls, airports and stadiums. </li></ul>
    12. 12. 2. PPP Potential
    13. 13. PPP Advantages for Citizens <ul><li>Improved, high-quality and customer-friendly services </li></ul><ul><li>Citizen and public values are maintained </li></ul><ul><li>Taxpayers indirectly benefit from cost-savings </li></ul>
    14. 14. PPP Advantages for Business <ul><li>Use the available public administration resources, including political support, easier access to aid and financial support </li></ul><ul><li>Sharing the risks </li></ul><ul><li>Increased prestige </li></ul><ul><li>Involvement in long-term projects </li></ul><ul><li>Using the services developed more than once generates revenues at little further costs </li></ul><ul><li>The development of innovative services in cooperation with the public administration leads to new opportunities and new customers </li></ul>
    15. 15. PPP Advantages for Public Administrations <ul><li>Provide new services and develop new projects </li></ul><ul><li>Avoid restrictions normally imposed on public administrations </li></ul><ul><li>Financial transparency </li></ul><ul><li>Easier and quicker to finance a broad range of services </li></ul><ul><li>Sharing financial responsibility </li></ul><ul><li>Use the available business resources </li></ul><ul><li>Knowledge-transfer between the business and the public sector </li></ul>
    16. 16. PPP Readiness <ul><li>Awareness in the public sector </li></ul><ul><li>PPP Readiness: </li></ul><ul><ul><li>Non-recognition </li></ul></ul><ul><ul><li>Avoidance </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Acceptance </li></ul></ul><ul><ul><li>Cooperation </li></ul></ul><ul><ul><li>Collaboration </li></ul></ul>[3]
    17. 17. PPP Issues <ul><li>Legal requirements and social aspects (e.g. acceptancy) </li></ul><ul><li>Uncertainty for personnel and customers </li></ul><ul><li>Data protection </li></ul><ul><li>Complex organizational structure with a number of interests (which may clash) </li></ul><ul><li>Cannot force customers to use services </li></ul><ul><li>Difficult to calculate revenue </li></ul><ul><li>Cultural, regional differences </li></ul><ul><li>Lack of qualified private companies can lead to problems with the bidding process </li></ul>
    18. 18. PPP Issues <ul><li>Different legal settings and requirements in the public institutions </li></ul><ul><li>Legal restrictions (bidding, awarding contracts) </li></ul><ul><li>Different expectations and understandings regarding e.g. „productivity&quot;, soft skills, speed and planning of a project </li></ul><ul><li>Public institutions become dependent on private business, when problems arise these will usually be credited to the public institutions and decrease citizen acceptance </li></ul><ul><li>PPP financing can be very difficult and inflexible </li></ul><ul><li>Insecurity for one of the partners due to unforeseen events </li></ul>
    19. 19. PPP Criteria for Success <ul><li>Stakeholder motives and responsibilities have to be agreed on and regularly revised. </li></ul><ul><li>Advantageous if one of the partners has previous PPP experience </li></ul><ul><li>The planned PPP must be adapted to existing (work) contracts </li></ul><ul><li>Transparency: key data, processes and procedures </li></ul><ul><li>Fair sharing of the risks </li></ul><ul><li>Each partner must be able to bring in its assets </li></ul><ul><li>The public institution must adapt to a new changed role </li></ul><ul><li>Businesses must realise that public administration may be interested in generating revenue </li></ul><ul><li>Partners must not forget what their actual roles are: businesses are profit-oriented and the public administration is responsible for the public interest </li></ul><ul><li>PPP MEANS GIVE AND TAKE </li></ul>
    20. 20. PPP Lessons Learned <ul><li>The partners expectations have to be clearly stated and they have to agree on the aims of the project. </li></ul><ul><li>All stakeholders must be involved. </li></ul><ul><li>Speed is important. </li></ul><ul><li>Avoid belly-button-gazing , involve customers and define what services they want. </li></ul>
    21. 21. 3. e-Government Examples of PPP
    22. 22. PPP Examples - ID Bremen <ul><li>ID Bremen GmbH (2000)focuses on providing specific IT-solutions for regional and local administrations ( ) </li></ul><ul><li>City of Bremen (50.1%) </li></ul><ul><ul><li>Safeguard jobs in the region </li></ul></ul><ul><ul><li>Encourage service orientation in Bremen </li></ul></ul><ul><ul><li>Access to personnel resources </li></ul></ul><ul><ul><li>Focus on core business </li></ul></ul><ul><li>debis Systemhaus GmbH (49,9%) </li></ul><ul><ul><li>Partnership with public administration </li></ul></ul><ul><ul><li>Gain ‘Know-how’ for the development of innovative IT-solutions in public administration </li></ul></ul>
    23. 23. PPP Examples – Digitales Nordrhein-Westfalen <ul><li>An eGovernment Platform integrating regional and local administrations </li></ul><ul><li>Whilst the focus used to be on the citizens, this has now shifted onto internal administration and interaction with business ( ) </li></ul><ul><li>Stakeholders and their interests </li></ul><ul><ul><li>A number of public institutions and private companies are already involved, and the project is open for further partners. </li></ul></ul><ul><ul><li>Given a high number of partners, there are a many and different interests which have to be brought togethe. </li></ul></ul>
    24. 24. PPP Examples: Defence Electronic Commerce System (DECS)
    25. 25. PPP Examples - Why DECS? <ul><li>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 </li></ul><ul><li>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 </li></ul><ul><li>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) </li></ul>
    26. 26. PPP Examples - Benefits of DECS <ul><li>Automation of paper driven processes </li></ul><ul><li>Automated payment processes provide quicker payment to suppliers and reduction of internal administrative overheads </li></ul><ul><li>Provides management information </li></ul><ul><li>Supports other eBusiness enablers e.g. electronic catalogues </li></ul><ul><li>Share information with its suppliers in a secure environment </li></ul><ul><li>Provides multiple access for industry and OGDs (EDI,RLI, Internet, etc.) </li></ul><ul><li>Share information on a selective basis using stakeholder profiles and workflow features </li></ul>
    27. 27. PPP Examples - DECS – Key figures <ul><li>Over 26,400 orders per month </li></ul><ul><li>Up to £75 million per month in value </li></ul><ul><li>Over 655 of the MOD’s Trading Partners are connected to DECS </li></ul><ul><li>5,800 users </li></ul><ul><li>1,500 people use the DECS collaborative services </li></ul><ul><li>DECS Bulk Fuel Inventory Solution (BFIS) records the issue of up to 100 million litres of fuel per month </li></ul><ul><li>MOD users are located at over 200 sites, with increasing international presence. </li></ul>
    28. 28. PPP Examples - Kommunalnet <ul><li> 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 </li></ul><ul><li>The critical factors: </li></ul><ul><ul><li>Political issues </li></ul></ul><ul><ul><li>Financing the project </li></ul></ul><ul><ul><li>Partner structure </li></ul></ul>
    29. 29. PPP Examples - Kommunalnet – Partner Structure <ul><li>Project Partners: </li></ul><ul><ul><li>Public Sector 51% </li></ul></ul><ul><ul><ul><li>Austrian Association of Municipalities </li></ul></ul></ul><ul><ul><ul><li>Regional Association of Municipalities </li></ul></ul></ul><ul><ul><li>Private Sector 49% </li></ul></ul><ul><ul><ul><li>AG Kommunalkredit </li></ul></ul></ul><ul><li>Guiding Principle: </li></ul><ul><ul><li>No IT partners in the consortium </li></ul></ul><ul><li>Further Partners </li></ul><ul><ul><li>IT companies </li></ul></ul><ul><ul><li>Business partners </li></ul></ul><ul><ul><li>Federal States </li></ul></ul><ul><ul><li>Provincal States </li></ul></ul>
    30. 30. Interested in cooperation: <ul><li>Interoperability Framework </li></ul><ul><li>Good Practices : assessing application domains and providing demonstrations based on “EU Good Practices” </li></ul><ul><li>E-Government Academies : building knowledge, expertise and skills– establishing of eGovernment trainings </li></ul><ul><li>Knowledge Net : ensuring sustainability </li></ul>WeGo Project BOSNIA & HERGOVINA / CROATIA / MACEDONIA / SERBIA
    31. 31. Upcoming Events <ul><li>European eGovernment Masterclass 2008 </li></ul><ul><li>eGovernment Training Methods & Tools </li></ul><ul><ul><li>Discuss with European experts the best ways to support government change towards transparency and better services! </li></ul></ul><ul><li>Danube University Krems </li></ul><ul><li>18.08.2008 - 21.08.2008 </li></ul><ul><li>E-Democracy Conference </li></ul><ul><li>Danube University Krems </li></ul><ul><li>29.09.2008 - 30.09.2008 </li></ul><ul><li>Cfp: 15. Mai 2008 </li></ul>
    32. 32. Thank you! Dr. Peter Parycek [email_address] (+43-1)53115/2574