Public Private Partnership

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PUBLIC PRIVATE PARTNERSHIP

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9/4/2011 Public sector, public goods and PPP Public Sector : ( Government Services) Benefits entire Society Encourage Equal Opportunity Public Goods : Non excludable and non rival consumption Public Goods

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Public Sector Strengths Legal Authority Protection of Procurement Policies Broad prospective/balance the competing goals to meet public needs Personnel – dedicated but constrained Capital resources 9/4/2011

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Private Sector Strengths Management Efficiency Newer Technologies Workplace Efficiencies Cash Flow Management Personnel Development Shared Resources (Money?) 9/4/2011

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Need For Public Private Partnership....... Growth of Public Debt accounting fallacies to distinguish between recurrent and capital expenditure. Traditional funding sources could not keep pace with growing Infrastructure needs. Increase in demand for public services. Contracting with a private company would allow the public sector units to : Renovate Construct Operate Maintain And/or Manage A facility or system very easily…. 9/4/2011

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Successful Partnerships The Secret is to Balance the Strengths of Both Sectors The Experience Of One Sector Helps Another 9/4/2011

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9/4/2011 What is Public Private Partnership (P3) ? Definition of Public Private Partnership : Public-private partnership is a contractual agreement formed between public and private sector partners, which allows more private sector participation than is traditional. In other words it can be stated as : A public-private partnership exists when public sector agencies (federal, state, or local) join with private sector entities (companies, foundations, academic institutions or citizens) and enter into a business relationship to attain a commonly shared goal that also achieves objectives of the individual partners.

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9/4/2011 Keys to a successful PPP Two fundamental requirements: Demonstrate value for money Ensure private sector genuinely assumes risk

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9/4/2011 Candidates For Suitable Candidates For PPP’s

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PPP IN PUBLIC TRANSPORT Transport are the arteries of a City Roads widening, building new expressways or expensive metro is not enough. Public Transport needs to achieve an increasing share of trips ,for a city to remain economically viable. Larger a city greater is the need for public transport. 9/4/2011

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Where Investments need to be made? Transport System Transport Infrastructure IT Infrastructure 9/4/2011

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Characteristics of Public Transport The above 3 factors make “ Cost Recovery Difficult “ for Public Transport 9/4/2011

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Why PPP and its Features Bridge Funding Shortfall Consistency in development goals Improvement in public service delivery Financing +Service quality Revenue Sources Revenue Sources Key Factors Key Factors 9/4/2011

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Public-Private Partnerships for Harnessing the Potential of Rainfed Agriculture PPP in agriculture: The main options and issues Less favored/marginal rain fed areas: risks and opportunities Possibility of PPPs in the supply chain management of high value and processed commodities 9/4/2011

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Opportunities for partnership exist Partnerships can improve access to • New technologies, and tools • New research expertise and infrastructure • Private equity markets; donor funding • New product markets and new customers • New marketing and distribution networks 9/4/2011

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Opportunities for PPPs along the supply chain… CONSUMERS PRODUCERS MARKETERS PROCESSORS RETAILERS 9/4/2011

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Types of PPP’s 9/4/2011

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One Type of PPP BOT – Build Operate Transfer The Private Sector: Source Financing Carries out all designs Builds the infrastructure Operates the facility and, Hands over ownership to public sector. 9/4/2011

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BOT – Build Operate Transfer The Dartford Crossing over the Thames River in London is an example of a BOT. The negotiated term of operation before transfer was 20 yrs. 9/4/2011

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BOT – Build Operate Transfer The Sydney Harbour Tunnel is 2.3 Km long with dual carriage way 9/4/2011

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9/4/2011