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