Institutional Prerequisites for Successful

3Ps in Developing Countries

Submitted to

The Third Seminar of

I2ED Research Team

Aung Kyaw Oo
Ph.D. Student
SNU-TEMAP
October 17, 2006.
Outline

Institutional Implications

Why PPP ?

PPP- Opportunity

Sharing the Benefits

Becoming a Better Purchaser

Profits and Risks in PPP

Required Public Expertise and Skills

Research Question
What is Institution ? 5

A set of rules or regulations or protocols. That

includes the legal system, norms, routines,
standards, etc…

The relation between Public Organizations and
institutions are important in PPP.

Public Organizations are strongly influenced by
institutions.

But, institutions are also embedded in and
developed within Public Organizations.
Why PPP ?

PPPs are contributing to the Government’s

drive to use publicly-owned assets more
effectively and efficiently.
-Lebanese Telecomms Case,
-Cambodia IT Infrastructure Development
Case,
-India’s Nation-wide Internet Kiosks Setup
Case,
 PPP- Opportunity
PPP offers British companies the opportunity to
use the skills and expertise they have developed
in providing services within the UK to enter new
export markets.
- E.g. Development of India and China IT
Export Market.
Sharing the benefits

PPPs should create genuine economic benefits for all
involved. This means ensuring that the benefits of PPPs
are shared fairly:
• between public and private sectors. Private sector
partners and investors benefit from the new and
profitable business that PPPs represent. But it is for
Government to ensure there is a fair deal for the public
sector;
• within both public and private sectors, that all the
stakeholders receive a fair share of the benefits. This
includes the customer, the taxpayer, private sector
investors and employees at every level of the
organisation.
BECOMING A BETTER PURCHASER

Rigorous expert scrutiny is required

throughout the life cycle of public sector
procurement projects.

Government create a central body to
ensure consistency of strategy and
promotion of best practice across the
public sector, and take the lead in
combining separate public sector projects
where this is appropriate.
Potential Profits in PPP
(1) Cost savings,
(2) Risk sharing,
(3) Improved levels of service or
maintaining existing levels of
service,
(4) Enhancement of revenues,
(5) More efficient implementation,
(6) Economic benefits.
Potential Risks in PPP

(1) Loss of control by local government,

(2) Increased costs,
(3) Political risks,
(4) Unacceptable levels of accountability,
(5) Unreliable service,
Potential Risks in PPP ( Cont’d)

(6) Inability to benefit from competition,

(7) Reduced quality or efficiency of
service,
(8) Bias in the selection process,
(9) Labour issues.
Required Public-Sector Expertise
• Overall expertise in public private partnerships
• Process management
• Public finance, including cost recovery
• Private finance
• Taxation policy and regulations
• Accounting
• Contract law
• Engineering
• Architecture
• Facility operations
• Real estate appraisal
• Marketing and market analysis
• Real estate development
• Asset evaluation
• Quantity surveying
• Communications and public involvement
Required Public-Sector Skills

These areas include:

• Negotiation skills
• Mediation
• Arbitration
• Contract law
• Project management
• Performance auditing and quality control
• Public process
• Private sector finance
• Risk management
 General Finding

Institutional Rules for PPP

may be set and
applied in each country
in different regions
based on the Economy.
 Research Question ?
Are the Institutional Prerequisites
in PPP in Developing Countries
Determined by Economic Policy ?
(OR)
Are they Deciding Factors in Successful
PPP in Developing countries ?
(OR)
???????
Thank you

Q & A
References:
(1) PPP- The Government’s Approach; Her
Majesty’s Stationery Office, United Kingdom,
2000.
(2) http:/ / www.infodev.org
(3) PPP-A guide for local government; Ministry of
Municipal Affairs, British Columbia, Canada,
May 1990.
(4) Framework for PPP: Informal Advisory Group
on PPP, Ireland, November 2001.
(5) Systems of Innovation: Perspectives and
Challenges; Charles Edquist.
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