The different Forms of Partnerships

6.1 Need for Partnerships in e-Government

6.2 The Possible Avenues for Partnership

6.3Public Private Partnership (PPP)

6.4 The different Forms of Partnerships

6.5 Important Considerations for Successful PPPs

6.3 Public Private Partnership (PPP)

“A cooperative venture between public and private sectors built upon the strengths of each partner that best meets clearly defined public needs through the appropriate allocation of resources, risks and awards.”

A Public-Private Partnership is a contractual agreement between a public agency (federal, state or local) and a private company. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility. The public 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.

The concept of Public Private Partnerships existed much before the e-government. Many governments have already built up such partnerships particularly in the domain of civic

infrastructure development. Department of Finance, Republic of South Africa has in fact issued a detailed document titled Guidelines for Public Private Partnerships. These Guidelines contain a set of procedures to advise departmental accounting officers and project managers on sound practices when preparing, procuring and implementing PPP arrangements. PPP is emerging as an important paradigm in the parlance of e-government.

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Chapter 6 Partnership

6.1 Need for Partnerships in e-Government

6.2 The Possible Avenues for Partnership

6.3 Public Private Partnership (PPP) 6.4The different Forms of

Partnerships

6.5 Important Considerations for Successful PPPs

6.4 The different Forms of Partnerships

The collaborations and partnership between the government and the other stakeholders, be it the private sector or the NGOs, can assume a variety of forms such as:

| Public Private Partnerships · BOO (Build-Own-Operate)Model :

The private partner builds and operates a facility/service without transferring ownership to the public sector. Legal title to the facility remains in the private sector, and there is no obligation for the public sector to purchase the facility or take title. A BOO transaction may qualify for tax- exempt status as a service contract if all Internal Revenue Code requirements are satisfied. · BOT (Build-Operate-Transfer) Model :

The private partner builds a facility to the specifications agreed to by the public agency, operates the facility for a specified time period under a contract or franchise agreement with the agency, and then transfers the facility to the agency at the end of the specified period of time. At the end of the franchise period, the public partner can assume operating responsibility for the facility, contract the operations to the original franchise holder, or award a new contract or franchise to a new private partner.

· BOOT (Build-Own-Operate and Transfer) Model :

The private partner owns the project, invests resources, undertakes its development, operates it for some time and then transfers the stakes to the public agency. This is almost identical to the BOO model except that the government gets the ownership of the assets created by the partner at the end of the project, at a nominal cost. The BOOT model is highly suitable in situations where assets build up during the project are expected to outlast the pre-specified time period of the project such as setting up nationwide/ region-wise Communication infrastructure.

| Contract Services

· Operations and Maintenance

A public partner (federal, state, or local government agency or authority) contracts with a private partner to provide and/or maintain a specific service. The contracts could be a simple one like Annual Maintenance Contract (AMC) at a fixed cost or could be complex contracts linked with strict SLAs (Service Level Agreements) defining the expected levels of various services. Under the private operation and maintenance option, the public partner retains ownership and overall management of the public facility or system. · Operations, Maintenance and Management

A public partner (federal, state, or local government agency or authority) contracts with a private partner to operate, maintain and manage a facility (commonly known as Facility Management) or system providing a service. Under this contract option, the public partner retains ownership of the public facility or system, but the private party may invest its own capital in the facility or system. Any private investment is carefully calculated in relation to its contributions to operational efficiencies and savings over the term of the contract. Generally, the longer the contract term, the greater the opportunity for increased private investment because there is more time available in which to recoup any investment and earn a reasonable return.

| Outsourcing

Outsourcing model is suitable for activities such as running the Help Desk, front-end or the day- to-day customer management for the projects/services as this is a resource intensive activity and private sector is much more skilled in doing these tasks due to their experience in Customer Relationship Management. Well defined software development assignments is

another area for outsourcing. Apart from enhancing the efficiency, outsourcing can also address the government’s problem of scarce skilled human resource.

outsourcing the work keeping in mind the time targets. Rather than going for either extreme i.e total outsourcing implying handing over the entire e-government project from concept to commissioning, subsequent maintenance and upgrade and zero outsourcing implying doing everything in-house, it is advisable that the governments decide on ‘selective outsourcing’. Utilizing the strengths of different vendors in specific areas in a selective manner could yield substantial benefits, while the government still keeps the key areas of operations in its own hands.

| Partnerships with NGOs & local bodies

Partnership with the NGOs/Non profit organizations/Local Bodies working in the interiors and remote parts of the country to facilitate a large scale roll out of the projects on a nationwide basis. These companies can also provide large scale manpower from the local regions for smooth implementation of the projects in the villages and other areas which are not so easily accessible

Moreover, NGOs and similar local organisations in villages, closely associate with the people at the grass root level and thus enjoy much higher trust levels vis-à-vis government. Since one of the major requirements of the success of e-governance is its acceptance and usage by the people, these agencies/organizations can play a crucial role in the success of e-government projects by bridging this gap which otherwise may result into another digital divide.

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Chapter 6 Partnership

6.1 Need for Partnerships in e-Government

6.2 The Possible Avenues for Partnership

6.3 Public Private Partnership (PPP) 6.4 The different Forms of

Partnerships

6.5Important Considerations for Successful PPPs

6.5 Important Considerations for Successful PPPs

While there is not a set formula or an absolute foolproof technique in crafting a successful PPP, following aspects should be looked into while developing a Public-Private Partnership (PPP), each of these keys is involved in varying degrees :

· Political Leadership

A successful partnership can result only if there is commitment from “the top”. The most senior public officials must be willing to be actively involved in supporting the concept of PPPs and taking a leadership role in the development of each given partnership. A well-informed political leader can play a critical role in minimizing misperceptions about the value to the public of an effectively developed partnership. Equally important, there should be a statutory foundation for the implementation of each partnership.

· Public Sector Involvement

Once a partnership has been established, the public-sector must remain actively involved in the project or program. On-going monitoring of the performance of the partnership is important in assuring its success. This monitoring should be done on a daily, weekly, monthly or quarterly basis for different aspects of each partnership (the frequency is often defined in the business plan and/or contract).

· Carefully Developed Plan

You must know what you expect of the partnership beforehand. A carefully developed plan (often done with the assistance of an outside expert in this field) will substantially increase the probability of success of the partnership. This plan most often will take the form of an

extensive, detailed contract, clearly describing the responsibilities of both the public and private partners. In addition to attempting to foresee areas of respective responsibilities, a good plan or contract will include a clearly defined method of dispute resolution (because not all

contingencies can be foreseen). · Private Partner Commitment

It must be a real partnership, with shared burdens and shared rewards for both the public and private participants. The private partner should not be viewed just an entity for outsourcing work, they should rather be involved in the project as genuine partners so that they can contribute to the long run success of the e-government initiative. The key lies in finding each partner’s strength and leveraging upon it to make a winning team.

· Communications with Stakeholders

More people will be affected by a partnership than just the public officials and the private-sector partner. Affected employees, the portions of the public receiving the service, the press,

appropriate labor unions and relevant interest groups will all have opinions, and frequently significant misconceptions about a partnership and its value to all the public. It is important to communicate openly and candidly with these stakeholders to minimize potential resistance to establishing a partnership.

· Selecting the Right Partner

The “lowest bid” is not always the best choice for selecting a partner. The “best value” in a partner is critical in a long-term relationship that is central to a successful partnership. A candidate’s experience in the specific area of partnership being considered is an important factor in identifying the right partner.

| Intellectual Property Resources

An important consideration with regards to Public Private Partnership is the decision about who controls and how much. During the implementation of e-government projects, a lot of assets in the form of products, technologies, business models etc in which intellectual property rights such as copyrighting, patenting and trademark rights could exist. Since Government is in partnership with the private sector during such projects, it is very important to define a clear- cut sharing mechanism and formulate policies with respect to returns on the use of these

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Chapter 7

Legislations and Regulatory