|
HOW PARTNERSHIPS WORK
PUBLIC-PRIVATE
PARTNERSHIPS DEFINED
A Public-Private Partnership is a contractual agreement
between a public agency (federal, state or local) and a private sector entity.
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.
KEYS TO SUCCESSFUL PUBLIC-PRIVATE
PARTNERSHIPS
There are six critical components of any successful
Public-Private Partnership (PPP). While there is not a set formula or an
absolute foolproof technique in crafting a successful 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).
A WELL THOUGHT-OUT 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).
A DEDICATED INCOME STREAM:
While the private partner may provide the initial
funding for capital improvements, there must be a means of repayment of
this investment over the long term of the partnership. The income stream
can be generated by a variety and combination of sources (fees, tolls,
shadow tolls, tax increment financing, or a wide range of additional options),
but must be assured for the length of the partnership.
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 partnerships
being considered is an important factor in identifying the right partner.
The listing of NCPPP members (provided under Council Members on this site)
provides a logical starting point for the identification of potential partners
or services that might be required in the development of a partnership.
REMINDERS FOR PUBLIC OFFICIALS
James Cuorato argued that for a partnership to succeed,
it must have the following characteristics:
- It must be a real partnership, with shared burdens
and shared rewards for both the public and private participants
- There must be real incentives for the private sector
or they will not participate
- The public-sector must use its resources effectively
and judiciously, focusing on projects where there can be success
- Keep it simple for the private-sector by minimizing
the bureaucratic procedures that can cripple a project
- Remember that "Land is King"--it provides
the public with the opportunity to control the projects
- Public-private partnerships are a necessary and important
part of the process
|
