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Definition of PPP
A PPP is a government service or private business venture which is functioned and operated
through a partnership of government and one or more private sector companies.
Or,
Public Private Partnership is a contractual agreement between public and private sectors partners
covering a variety of activities.
Importance of PPP
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Benefits:
Public sector benefits:
1. Maintaining economic stability.
2. Gains from private sector innovation and expertise.
3. Achieving desired growth rate.
Private sector benefits:
1. Expansion of business
2. Innovation
Public/User benefits:
1. Accountability
2. More responsive government
3. Guarantee of safety
Why government promotes PPP?
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Types of PPP
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2nd CHAPTER
Sectors of PPP in Bangladesh
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Health sector
Education
Infrastructure
ICT
Industry
Tourism
3. Efficiency
4. Accountability
Spectrum of relationship in PPP
1.
2.
3.
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Parallel activities
Competitive activities
Complementary activities
Contractual services
Cooperation and collaboration
Political leadership
Public sector involvement
Well thought out plan
A dedicated income string
Communication with stakeholders
Selecting the right partner
Policy statement
PPP unit
Presence of focal ministry
Development of a PPP program
Integrate with planning
Regulatory reforms:
1. Sectoral policy
Limitation of PPP
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Corruption
Politicization
Environmental hazards
Accountability transparency
Higher price
Overlapping
Contractual policy
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1. Ownership
2. Potential political
deal breakers
1. Laws &
Regulations
2. Document &
methodology
3. Internal
organization
4. Transparency &
accountability
1. Business case
2. Fiscal issues
3. Financing
Execution
1. Internal &
external
capability for
implementation
2. Procurement
3. Contract
management
END OF 2ndCHAPTER
3rd CHAPTER
Procurement process
Definition of Procurement:
Procurement is the act of delivering goods or services from external sources to others.
Three types of procurement:
1st method: Direct negotiation:
Direct negotiation is an exclusive negotiation between a public agency and private agency which
is committed by a direct source, single individual or not a competitive way.
2nd method: Competitive negotiation
In a competitive negotiation, at first approximately a number of ten bidders are selected, then
invitation paper is sent to them for the negotiation.
Process of competitive negotiation
1. Request proposal
4th CHAPTER
Risk management in PPP
Definition of Risk:
Risk is the probability of loss. It is the size of the possible damage.
Definition of Risk management
Risk management is the process of identifying, analyzing and addressing significant risk on an
ongoing basis.
Risk analysis:
Risks should have been identified and analyzed at the pre-feasibility stage using the suitability
filter. The risk analysis should include an assessment of which party, public or private, is best
able to bear the risk.
Risk allocation:
Risks are typically allocated to the party that can most efficiently manage them at the lower cost.
In PPP arrangements, the public sector transfers risks to the private sector for more efficient
management.
Types of risk:
1. Retain risk- the risk that will be retained by the public sponsor
2. Transferable risk- the risk that will be transferred to the private partners
3. Shared risk- the risk that will be borne by both parties
Risk identification/ sequential steps
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Risk register
A risk register is a written log which helps the project team to understand the nature of the risks
involved in a particular project.
Financing of PPP
Sources of Private finance initiative
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Commercial bank
Capital market / Bondholders
Equity fund
Collateral
Compensation of project company
Buying a service not an asset
Performance related rewards
development
8. The inter American development bank
End of 4th chapter