david wright chief executive ciid. public interest public sector private sector ppp structure

PUBLIC + PRIVATE = PARTNERSHIP

David WrightChief Executive

CiiD

Partnership

Partnership

Public Interest

Public sector

Private sector

PPP Structure

Partnership

Public interest – the MDA says WHAT it wants from the partnership – lays out the “rules of the game”

Private sector offers a solution for delivering what the MDA wants – it defines HOW the MDA will get what it wants

What the MDA wants

Needs to◦ Reflect precisely what the MDA wants◦ Be described unambiguously◦ Be capable of being provided◦ Be capable of being measured

This is usually called the “output specification”

Partnership

Public Interest

Public sector

Private sector

PPP Structure

How the private sector delivers

Uses its collective skills to create the most effective and efficient solution◦ Design◦ Build◦ Maintain◦ Operate◦ Finance

This isn’t free

The private sector solution costs money:◦ Suppliers◦ Repaying debt◦ Profit / return on investment

The private sector will estimate these amounts over the contract life and calculate the regular payment that they need to receive◦ Users◦ Government◦ Both

Nor is this risk-free

The private sector faces risks:◦ Availability (design, build, maintenance)◦ Performance (maintenance, operation)◦ Costs

The public sector faces risks:◦ Political◦ Management◦ Fiscal

How are risks managed The private sector:

◦ Availability (design, build, maintenance): project management, contractual, holistic approach

◦ Performance (maintenance, operation): contractual, partnership management

◦ Costs

The public sector:◦ Political: partnership management, performance measurement◦ Management: procurement management, contract

management, capacity building◦ Fiscal: assessing economic value, identifying fiscal space,

monitoring

How can this be achieved?

The private sector:◦ Create a supply-side partnership◦ Focus on long-term solutions◦ Prepare to take on different obligations and manage the risks◦ Create and nurture a partnership with an MDA

The public sector:◦ Build capacity◦ Work outside the comfort zone – cross-functional◦ Think in terms of outputs, not inputs and processes◦ Do the right thing first time◦ MANAGE THE CONRTACT◦ Create and nurture a partnership with a private sector partner

Thank You

David Wrightdavid.wright@comiid.org