Public Private

Partnerships

How community

collaboration drives change

Agenda1. Introduction / Public service delivery & roles of government

2. Why PPP?

3. Definition

4. Historical Milestones

5. Community Partners

6. Recent Trends

7. Best Practices, Advantages, Disadvantages

8. Cambodian Examples

9. Case Study (River Walk, Des Moines)

10. Break Out

11. Group Reports & Discussion

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Why PPP?

For better governmentPrudent PPP leads to more cost-effective (efficient) public services.

For quality of lifeGlowing affluence allows more people to provide for their own needs, making them more receptive to PPP.

For small governmentGovernment is too big, too powerful, too intrusive in people’s lives.

For more business opportunitiesGovernment spending is a large part of the economy; more of it can and should be directed toward private firms.

For better society

People should have more choice in public services. (By relying less on distant bureaucratic structures and more on family, neighborhood, faith, and ethnic and voluntary associations.) (Savas, 2000)

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Definitions

“An agreement between the government and one or more private partners (which may include the operators and the financers) according to which the private partners deliver the service in such a manner that the service delivery objectives of the government are aligned with the profit objectives of the private partners and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private matters.”

-Organization for Economic Cooperation and Development

“Arrangements where the private sector supplies infrastructure assets and services that traditionally have been provided by the government.”

-International Monetary Fund

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Definitions

“A generic term for the relationships formed between the private sector and public bodies often with the aim of introducing private sector resources and/or expertise in order to help provide and deliver public sector assets and services.”

-European Investment Bank:

“Any arrangement between a government and the private sector in which partially or traditionally public activities are performed by the private sector”

-E.S. Savas

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Historical Milestones

• Peter F. Drucker first suggested privatization in the word “reprivatise”

• Multiple studies on contracting with private sector were conducted by Savas, Poole, Spann, Rothbyard, etc.

• Elections of Margaret Thatcher (1979) and Ronald Reagan (1980) gave impetus to PPP. Other Western and developing countries followed

• PPP penetrates in central and local governments around the world

• Some drawbacks of PPP became visible Still, the trend continues

1969

1970s

1980s

1990s

2000s-

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Increasing Needs

PPPChanging Boundary

Fiscal Stress

Business Opportunities

Personal Affluence

Opposition to Big

Institutions

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Community Partners

PublicCentral government

Local governments

Public agencies

Public corporations

PrivateCorporations

Professional organizations Industry groups

NPOs

Citizen groups/ Volunteers

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Recent trend: Developing countries

Fiscal stress of developing countries became visible in early 1980s

• Many developing countries relied on government owned monopolies for major infrastructures, which resulted in heavy fiscal burden

• Increased concerns for default of Central and South American countries

• Investment projects that involve private companies dramatically increased in 1990s

Major donors consider PPP as a part of development aid strategy

• World Bank: made clear to utilize PPP for infrastructure development

• US: private sector leads projects; public sector supports

• UK: clearly expressed the emphasis on the partnership with various actors

• Japan: strengthen the collaboration of business activates and public finance to accelerate development (Savas, 2000)

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Service Share as Part of PPP

Service Share: Utilize private sector expertise for more effective

and efficient management of public facilities.

Recreational and sports facilities: Stadium, tennis court, swimming pool, ski site, public hotel

Industrial development facilities: Exhibition facility, open research facility

Basic facilities: Parking lot, large park, water utility, cable utility

Cultural and educational facilities: community center, museum

Social welfare facilities: Hospital, senior care center. (Savas, 2000)

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Service Share

Shared service is expected to achieve cost and service improvement through:

Efficiency through standardization, simplification and economy of scale, often with technology leverage

Improvement of service quality through accumulation of knowledge and experience

• The shared service has been broadly used in the private sector as a way of management reform. There are number of shared service providers.

• Recently, government agencies has introduced the shared service approach to increase efficiency in regular works including accounting, human resource management, procurement, IT system, public relations, etc. (Savas, 2000)

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Advantages

Efficiency

Quality improvement

Risks transfer, cost reduction

Utilizing private know-how

Experience from private sector

Budget increase

Transparency improvement

Good management

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Cost increase

Private sector may not satisfy needed/requirement

Problem of control

Accountability

Too much profit orientation

Downsizing

Disadvantages

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Identify a community or regional issue

• What are the challenges?

• Who is impacted?

Outline project scope to resolve the issue

• Project Cost

• Timeline (if applicable)

Define project goal

Who are the potential Community Partners?

Establish a multi-party written agreement

• Set Community Partner Expectations

Best Practices

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Find your leader/champion

Plan for the unexpected

• Things can go wrong

Sunset terms are normal, plan accordingly

Some of the best work comes from community collaboration!

Best Practices

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PPP in CambodiaCambodia Electricity (51% vs 49%) Phnom Penh Water Supply

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Case Study: Principal RiverwalkDes Moines, IA

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Principal Riverwalk

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Project Goal:

Connecting greenway trail system through the downtown along the Des Moines River

Why PPP:

Local business wanted to provide the community with an iconic gift for its 125th anniversary. The Des Moines River is controlled by the Army Corps of Engineers, but property on either side of the banks is controlled by the City.

Principal Riverwalk

Key Partners:Principal Financial GroupCity of Des MoinesGreater Des Moines Public Art FoundationU.S. Army Corps of Engineers

State of IowaDepartment of TransportationWastewater Reclamation AuthorityMidAmerican Energy Company

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Project Timeline

2002 – 2012

40 Different Agreements

130 City Council Actions

50 Board and Commission Actions

Creation of the Riverfront Development Authority (RDA)

Challenges

Flooding

Maintenance

Cost

Original Estimate - $25M USD

Actual Cost - $70M USD

Principal Riverwalk

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What happens when your project is hit with a natural disaster?

Principal Riverwalk

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2008 Flood Impact

Flood control improvements

Pump Station

Combined Sewer Separation

Court Avenue Entertainment District

Central Business District

Principal Riverwalk

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FundingVision Iowa - $4 million

Iowa Dept. of Transportation - $1.5 million

Iowa Dept of Natural Resources – $300,000

Federal Transportation - $12.5 million

Corps of Engineers / Greenbelt - $13.5 million

City of Des Moines - $3.3 million

Principal / Private - $20+ million

Meredith - $2 million

Plus $30M in – Hansen Triangle, MidAmerican Energy, Art

Principal Riverwalk

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Table Exercise (30 Minutes)• Groups of 9

• Fact sheet representing a community challenge

• Identify a scribe and a speaker

• Assignment: Assemble a recommendation for a PPP using the best practices learned through the session.

• Project Scope

• Goal

• Partners

• Champion

• Challenges

• Prepare a 3-5 minute presentation to share

Group Work

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Rozlynn Worrall

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Group WorkClean Water Shortage in Tnoat Village

Mrs. Ry has lived in Tnoat Village of Kampong Phlouk Commune, Prasad BakongDistrict and Siem Reap Province since 2010. Her 7-member family has used unclean water from sources such as ponds and the nearby lake to meet their needs. Because her husband fishes away from home, she is responsible for bringing water from other sources such as channel and pond to drink and cook. During the dry season, Mrs. Ry walks 30 minutes, 1000 meters, to bring water from the only pond to her house. Her two younger daughters, ages 11 and 13, help her to collect water. They also use this pond to bathe and wash clothes twice daily.

How could a PPP assist in eliminating the suffering of villagers, especially women and children, and minimize the challenging issues related to climate change in fishing communities around Tonle Sap where there is a shortage of water during dry season?

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REFERENCES

• Savas, E. S. (2000). Privatization and public-private partnerships (p. 31). New York: Chatham House.