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Human Resource Development

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Human Resource Development (HRM-627)
VU
Lesson 39
PRINCIPLES OF PUBLIC PRIVATE PARTNERSHIP (PPP)
Partnership Principles
Following are the principles or criterion which a partnership has to fulfill to qualify as a PPP or PSPP.
1. Openness and Binding Commitment: Disclosure to partners of all relevant information and strict
adherence to the important principles of cooperation. This strict adherence is usually made possible in
the presence of a formal agreement between the partners. Others factors like resources put into the
partnership and agreed upon goals and shared functions should also be known fully to all the partners.
2. Supervision/Control: Continuous monitoring and observation allows important lessons to be learnt
from the partnership and also provide a good mechanism for collecting and analyzing the feedback.
3. Successful Negotiation Process: The partnership is a strategic community of responsibility and action
set up for the mid to long term, in which the partners contribute their respective inputs into the shared
process of producing products and/or services. The process of decision-making by negotiation is done
together, so that in the process of decision-making no-one is disadvantaged but rather, disadvantages
are reduced. For the risks, the planned input and the expected profits, an efficient exchange process
must be agreed. Every participant fulfils the role that is assigned to him or her within the partnership.
The equality of the roles is not essential, as long as the partners in their assigned roles have equal
rights.
4. Equal Rights in Different Roles: It is not necessary for the agreed roles of the partners to be equal but
it is necessary for them to have equal rights in their respective roles.
5. Clear Division of Tasks, Roles and Functions: The assignment of tasks and responsibilities is done
according to the actual capabilities and expertise of the partners.
6. Clear Goals and Objectives: Clear goals and objectives have to be decided mutually by the partners.
7. Mutual Trust: Especially in the area of "core services" (social services whose qualitative performance is
not easy to measure), mutual trust between the partners contributes a lot to the successful
implementation of the partnership.
8. Sympathy between the Partners: Experience shows that when the "chemistry" between the partners is
good, the setting-up and running of the partnership is smooth and more productive.
9. Creation of Synergy between Partners: In negotiation processes, specific resources of the partners are
brought together in such a way that usable synergy effects are generated. The focus is on achieving
goals negotiated together, with which each partner can identify themselves. Thus synergy effects are
made available to the partners, which would not have come about without the partnership.
10. Suitability of the Resources and Size of the Partnership: Resources for the partnership (human
resources) must be adequate for the size of the partnership. Sufficient time resources must be planned
for the partnership.
11. Risk Sharing: Sharing of risks and profits need to be made clear in the agreement and then strictly
adhered to during the whole duration of the partnership.
12. Active involvement of the public sector throughout the project and also in the follow up stages
13. Political leadership: Active support from the political leaders is required in encouraging the two
partners to share responsibilities, risks and rewards.
14. Secure public control: In case the private partner defaults or fails to fulfill its obligation, the
government should ensure that it has recourse rights to maximize the opportunity to resolve the issue
or to take control.
15. Limited complexity: The arrangement should be kept simple, workable and free of complexity and
confusion.
16. Legal authority: In the form of legislations and law making to encourage and protect PPP formation.
17. Specific Needs: Each partner must have a specific reason for joining a partnership, i.e. a specific need
which can be fulfilled through the partnership.
Infrastructure Public Private Partnerships: Trends in South Asia
The trends in developing infrastructure PPPs have been different to some extent in South Asia in comparison
to global trends, however, this needs to be studied closely. In the early 1990's, there were not many countries
that worked with the private sector. The World Bank started its operations in 1995 in the PPP domain and
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Human Resource Development (HRM-627)
VU
estimated that private investments in this sector might double to $30 billion by 2000. However, these forecasts
were challenged as the world witnessed a spectacular growth in investments in the PPP sector to $130 billion in
1997 alone.
After this growth phase in PPP investments, came a rapid collapse following the economic crises in East Asia
and Latin America, thus slowing down PPP investments globally. These crises lead to the re-evaluation of risks
and the realization that expectations had not been met from both the public and private side.
However, PPPs have moved on since then and private investments have risen after the late 1990's, driven by
widespread privatization in the global economy. Figures from the early to mid 1990's show that, user fees
charged for the PPP projects were relative to cost recovery as evident in the telecom sector that dominated in
developing countries in that era. A lot of increase was seen in telecommunications, but that was not really a
sector with PPP characteristics and leaned more to the commercial side. The sectors of energy and water saw
the least increase because of their political and economical aspects. In Asia, nearly 18 percent of infrastructure
projects were funded by private sectors, however, South Asia had doubled its share of private sector
investment since then from a mere 5 percent to 11 percent. Most of the PPP projects in this era, faced
difficulties because of low cost recovery and much dependence on donor funds. This led to adjustment in
polices that focused more on increasing private sector investments and better cost recovery strategies.
The difference in global and South Asian trends is striking as globally investments in PPP projects are high,
whereas, such investments in South Asia are quite low. In South Asia, there has been a slow increase in private
sector investments in PPPs over time and no rush has occurred to actually invest in projects. Later, the
economic crisis added to this by putting off private sector investments. Major investments are only being made
in the energy generation and roads sector and the investments in the Greenfield projects are low. However,
South Asia has seen comparatively more investments in new projects and Greenfield projects as compared to
other regions in late 1990's.
Situation in Pakistan
While some countries had sustained investment flows in PPPs, Pakistan still spends about 1.3 - 1.4 percent of
its GDP on PPP projects and that too is mostly concentrated on power generation and telecommunications
sector. This poses a question, that if Pakistan was to increase its GDP spending on PPPs from 1.3-1.4 percent
to 3 percent and in the longer run to 6-7 percent, then how it can be done?
In the South Asian region, China and India both have been able to increase their GDP spending on PPP to
such levels. However, if Pakistan needs to do this, it needs to have certain "saving rate" which poses a very
serious policy challenge.
For any country to achieve such levels of GDP investments in PPPs, the following questions arise:
(i)
Who is going to pay for the PPP projects?
(ii)
How revenues will increase in sectors by bringing in projects which users will be happy to pay for?
(iii)
Whether the investments are going to be politically robust and sustainable?
However, when it comes to the power, water and sanitation, and transport sectors the capacity and ability for
the users to pay for these services and the political tolerance for charging prices that are close to cost recovery
becomes a real concern.
If the user capacity to pay and the political tolerance is not there then the question becomes, how you structure
government support in an efficient manner to address these concerns?
Therefore, one has to be realistic about the risks that have to be shared in developing PPPs and the ability of
the users and the government to support revenue streams that underlie these projects and attract a sustainable
level of private sector financing. This has to be operationalised in the Pakistani context to make PPPs work
here.
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Table of Contents:
  1. INTRODUCTION TO HUMAN RESOURCE DEVELOPMENT:The Concept and its Dimensions, Targets of Development
  2. FOUNDATIONS OF HUMAN BEHAVIOR:Attitudes, Personality, Emotional Intelligence
  3. PERCEPTION:Attribution Theory, Shortcuts Frequently Used in Judging Others
  4. INTRINSIC MOTIVATION:Why Choose Big Five Framework?, THE OUTCOME OF FIVE FACTOR MODEL
  5. FIVE FACTOR MODEL:The Basis of Intrinsically Motivated Behavior, Intrinsic Motivation and Values
  6. MOTIVATION:EARLY THEORIES OF MOTIVATION, Designing Motivating Jobs
  7. The Motivation Process:HOW TO MOTIVATE A DIVERSE WORKFORCE?,
  8. INTERPERSONAL COMMUNICATION:PRINCIPLES OF INTERPERSONAL COMMUNICATION
  9. THE WORLD BEYOND WORDS:DIFFERENCES BETWEEN VERBAL AND NONVERBAL COMMUNICATION, MINDFUL LISTENING
  10. TRANSACTIONAL ANALYSIS:EGO STATES, Parent Ego State, Child Ego State
  11. TYPES OF TRANSACTIONS:Complementary Transactions, Crossed Transactions, Ulterior Transactions
  12. NEURO-LINGUISTIC-PROGRAMMING
  13. CREATE YOUR OWN BLUEPRINT
  14. LEADERSHIP:ORGANIZATIONAL DEMOCRACY
  15. LEADERSHIP:Environment and Strategic Leadership Link, Concluding Remarks
  16. UNDERSTANDING GROUP BEHAVIOR:Stages of Group Development, Advantages of Group Decision Making
  17. UNDERSTANDING TEAM BEHAVIOR:TYPES OF TEAMS, Characteristics of Effective Teams,
  18. EMOTIONAL FACET:PHYSICAL FACET
  19. HUMAN RESOURCE DEVELOPMENT & THE ROLE OF GOVERNACE:Rule of Law, Transparency,
  20. HUMAN RESOURCE DEVELOPMENT:The Concept and Its Dimensions, Targets of Development
  21. HUMAN DEVELOPMENT INDEX (HDI):Methodology,
  22. REPORTS:Criticisms of Freedom House Methodology, GROSS NATIONAL HAPPINESS
  23. SECTORS OF A SOCIETY: SOME BASIC CONCEPTS:PUBLIC SECTOR, PRIVATE SECTOR
  24. NON GOVERNMENTAL ORGANIZATIONS (NGOS):Types, Methods, Management, Citizen organization
  25. HEALTH SECTOR:Health Impact of the Lebanon Crisis, Main Challenges,
  26. A STUDY ON QUALITY OF PRIMARY EDUCATION BACKGROUND AND RATIONALE
  27. ADULT EDUCATION:Lifelong learning
  28. THE PRACTICAL PERSPECTIVE OF ADULT EDUCATION:Problems of Adult Literacy, Strategies for Educating Adults for the Future
  29. TECHNICAL & VOCATIONAL EDUCATION:VET Internationally, Technical Schools
  30. ASSESSING THE LINK BETWEEN INTELLECTUAL CAPITAL FORMATION AND PERFORMANCE OF A UNIVERSITY
  31. SCIENCE & TECHNOLOGY EDUCATION:Social responsibility, Curriculum content
  32. ENVIRONMENT:Dark Greens and Light Greens, Environmental policy instruments
  33. HDI AND GENDER SENSITIVITY:Gender Empowerment Measure
  34. THE PLIGHT OF INDIAN WOMEN:
  35. ENTREPRENEURSHIP:Characteristics of entrepreneurship, Advantages of Entrepreneurship
  36. A REVISIT OF MODULE I & II
  37. HUMAN DEVELOPMENT & ECONOMIC GROWTH (1975 TO 2003):
  38. PUBLIC PRIVATE PARTNERSHIP:Origins, The Desired Outcomes of PPPs
  39. PRINCIPLES OF PUBLIC PRIVATE PARTNERSHIP (PPP):Situation in Pakistan,
  40. DEVOLUTION REFORMS A NEW SYSTEM OF GOVERNMENT:
  41. GOOD GOVERNANCE:Participation, Rule of law, Accountability
  42. MACROECONOMIC PROFILE OF A COUNTRY: EXAMPLE ECONOMY OF PAKISTAN
  43. COORDINATION IN GOVERNANCE: AN EXAMPLE OF EU, The OMC in Social Inclusion
  44. MOBILIZING REGIONAL EDUCATIONAL RESOURCES: THE ASEAN UNIVERSITY NETWORK, A CASE STUDY
  45. GOVERNMENT PRIORITIES AND POLICIES:Role of Government, Socio Cultural Factors in Implementing HRD Programs