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Thursday, 18th April 2024 |
| Bridging the gap with public/private partnerships |
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| This is a summary of a paper that Eric Munro gave at the recent Global Summit on Public/Private Partnerships in Dublin. The topic of that paper was bridging the gap between the public and private sectors, focusing on the way in which the relevant public sector procuring department or authority undertakes both policy and project development. |
There has been an understandable tendency for the public sector in Ireland to look to other neighbouring countries for precedent in the development of policy in relation to public/private partnerships, or PPPs. One of the most obvious sources of information has been the UK - it has been at the PPP game since 1992 (a.k.a. the Private Finance Initiative or PFI), there are comparable legal, social and economic factors and, of course, no language barriers.
Whilst the Irish public sector can draw comfort from the UK experience, and so avoid some of the pitfalls in policy development, I would appeal to those public servants in the Department of Finance and other organisations to also look further afield for policy precedent. To give examples, the Netherlands has been using hybrid forms of PPPs for a number of years to develop maritime and other infrastructure needs and Greece has also been active in more property-based projects such as sporting facilities for the Olympics and the new Athens airport. Canada and South Africa have both undertaken extensive road building programmes using PPP procurement techniques.
Judging by a show of hands, many of the private sector delegates attending the global summit had never been asked to become involved in the development of public sector policy on PPPs, despite the obvious emphasis on ‘partnership’ within the acronym. Many countries still insist on leading with public sector policy that the private sector has to follow. I hope that Ireland will adopt a fully inclusive approach to how PPP policy is both developed and implemented.
One of the ways in which inclusiveness and a spirit of partnership might be taken forward is the development of PPP policy though the use of market focus groups and/or brainstorming workshops, consisting of senior civil servants and private sector industry leaders. Such a model is currently being successfully employed by the Department of Finance and Personnel in Northern Ireland, and will ensure ‘buy-in’ from all key stakeholders.
There is also a need for further industry group and trade union consultation on the development of PPP policy in Ireland, particularly in the context of the National Development Plan and the Programme for Prosperity and Fairness. Once policy can be settled and explained, there is significant demand for publication and dissemination to the general public. As a fellow speaker at the summit said, it is high time that governments stopped defending the use of PPPs and went out and sold them instead.
Project Development
All too often, the public sector attitude to PPP project development is like an arranged marriage. The public sector alone decides who the bride is to be and then presents her at the altar. It is then up to the private sector to decide whether to be the groom. The partnership has a much better chance of succeeding if there has been a period of courtship, to examine the extent of mutual objectives and develop understanding between the parties.
In practical terms, PPP project development can be enhanced by the early involvement of the public sector, either through informal market consultation or ‘soundings’ or by the continuation of a cross-sector focus group responsible for the policy development that gave rise to the project.
One of the primary aims in the early stages of project development should be to put together a clear definition of the scope and structure of the project. This can then be used to identify key success factors, such as the level of competition; demonstrable value for money and the extent of flexibility in public service delivery.
Further market soundings can then be very effective in developing the detail to allow for an effective procurement process. Big issues can be discussed, examined and resolved, such as the identification of the contracting parties and legal structures; determination of the performance standards expected by the public sector; how funding structures might bring operational efficiencies and, most importantly, what happens if things go wrong!
By truly working in partnership and ‘bridging the gap’, both public and private sector should see the long term benefits that PPPs can bring. |
Eric Munro heads up the PPP consultancy team at Farrell Grant Sparks where he is lead advissor to both public and private sector clients in the transport, education and health sectors in Ireland.
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| Article appeared in the November 2001 issue.
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