New Public Management

Private Public Partnership:

non-government is effective

by Evgenia Parkina

Definition

PPP refer to the private sector financing, designing, building, maintaining and operating infrastructure assets traditionally provided by the public sector

PPP describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector company

Private sector advantages

Management Efficiency Newer Technologies Workplace Efficiencies Cash Flow Management Personnel Development Shared Resources

Why do government need private sector?

Financial need - budget deficit, large debt Aging or deteriorating infrastructure Growing demand on public sector services Search for greater efficiency and creativity Strides to introduce competition Lack of domestic experience or skills Need to educate local contractors while

remaining competitive

Public sector advantages

Legal Authority Protection of

Procurement Policies Broad prospective

the competing Capital resources Goals to meet public needs

Benefits of PPP

Mitigates and properly allocates risks Provide incentives for lowering costs Ensures value for money Attract the right skills and management Expertise Promotes innovation Reduces corruption and waste Reduce burden on taxpayers ►

Pitfalls of PPP

The process of creating a PPP is much more demanding than a traditional procurement process

Failure to communicate: “We don’t speak the same language”

“What takes the government 50 years to achieve can be done by the private sector in a tenth of time”

Milton Friedman

Sources:

Darrin Grimsey, Mervyn K. Lewis Public Private Partnerships: The Worldwide Revolution in Infrastructure Provision and Project Finance, 2006

E. S. Savas Privatization and Public-Private Partnerships, 2002

Public-private partnerships: principles of policy and finance, Elsevier, 2007