PUBLIC PRIVATE PARTNERSHIP IN HEALTH SECTOR

3. Presentation to The Hon’ble Prime MinisterPresentation to The Hon’ble Prime Minister
June 19, 2013June 19, 2013
PPP Office, Prime Minister’s Office
PUBLIC PRIVATE PARTNERSHIP IN HEALTH
SECTOR : CHALLENGES AND OPPORTUNITY
Prepared by
Dr F. HOSSAIN

4. DISCUSSION TOPICS: ()
DEFINITION
1
GOAL OF PPP
2
OBJECTIVES
3
CONCEPT
4
CORE PRINCIPLES
5
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DIMENSION
6
GLOBAL CONTEXT
7
BANGLADESH
SCENERIO
8
PPP APPROACH
9
OUTCOME AND
BENEFIT
CONCLUSION
CHALLENGES
OPPURTUNITY
10
11
12
13

5. DEFINITION
“Public-private partnership refer to financing,
designing, building, maintaining and operating
infrastructure assets to the private sector
provided by the public sector.”
According to IMF(International Monitory Fund)

6. PUBLIC PRIVATE PARTNERSHIP-PUBLIC PRIVATE PARTNERSHIP-
PPP/P3PPP/P3
The public partnersThe public partners : Government entities: Government entities
The private partnersThe private partners - Local or international agencies- Local or international agencies
A contractual agreementA contractual agreement- Between a public agency- Between a public agency
and private sector in businesses or any investments withand private sector in businesses or any investments with
technical or financial expertise.technical or financial expertise.
Skills and assets of each sector -Skills and assets of each sector - Shared in deliveringShared in delivering
a service for the use of the general public.a service for the use of the general public.
Each party shares-Each party shares- Risks and rewards in the delivery ofRisks and rewards in the delivery of
the servicethe service

7. PUBLIC
SECTOR
PRIVATE
SECTOR
GOAL - To create financially a
sustainable system

8. OBJECTIVESOBJECTIVES
To ensure government services are delivered in theTo ensure government services are delivered in the
most economical, effective and efficient mannermost economical, effective and efficient manner
To create opportunities for private sector growth andTo create opportunities for private sector growth and
overall economic developmentoverall economic development
To ensure the best interests of the public, theTo ensure the best interests of the public, the
business sector and the community are servedbusiness sector and the community are served
through an appropriate allocation of risks and returns.through an appropriate allocation of risks and returns.

9. CONCEPTCONCEPT
PPP is a win win relationship between the government‐PPP is a win win relationship between the government‐
and private sector sharing the risks and rewardsand private sector sharing the risks and rewards
under a contract:under a contract:
WHERE…………WHERE…………
Private sector-Private sector- Active party starting from the stage ofActive party starting from the stage of
conception and up to the stage of operation andconception and up to the stage of operation and
maintenancemaintenance
Public sector-Public sector- Government retains the sole purchaserGovernment retains the sole purchaser
of the services provided and holds control overof the services provided and holds control over
infrastructureinfrastructure

10. CORE PRINCIPLES OF PARTNERSHIPCORE PRINCIPLES OF PARTNERSHIP
Equality and mutual Commitment between partnersEquality and mutual Commitment between partners
Autonomy for each partnerAutonomy for each partner
Shared decision-making and accountabilityShared decision-making and accountability
Benefits for the StakeholdersBenefits for the Stakeholders
Equitable Returns / OutcomesEquitable Returns / Outcomes

11. BASIC DIMENSIONS
 Shared goals
 Shared resources (time, money,expertise, people)
 Shared risks
 Shared benefits

12. SETTING THE SCENE: UNDERSTANDING PPPS?
►Delivery of Public
Services
Road, Bridge, Port, Airport, Hospital,
Zones Development, Tourism Facility
Mode
Delivery Role
Traditional Public
Procurement
Public Private
Partnership
Scope, Quality, Standards
Financing
Design
Construction
Operation and Maintenance
Project Management
Revenue Payments
Public Public
Public
Public
Public
Public
Public
Private
Private
Private
Private
Private
Private
Private

13. PPP
World
(87%)
Africa
(76%)
Asia
(98%)
Australi
a (79%)
Europe
(98%)
North
America
(73%)
South
America
(92%)
PRIVATE SECTOR INFRASTRUCTURE -GLOBAL CONTEXT
*Source: PPP Authority
research
More than 50
Multilateral &
Donor Agencies
work with PPP
PPP Practicing Countries
BOT /
DBFOM
BOO
BOOT
Leases /
Affermage
O&M
Contract
PFI / BOT
Annuity
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14. PPP APPROACHPPP APPROACH
Goal - Attract private investmentsGoal - Attract private investments
Need-to improve efficiency in service deliveryNeed-to improve efficiency in service delivery
Private Sector contribution-
(Limited for)
Public Sector contribution
(Limited to)
 Financial investments
 Management practices
 Efficiency in service
delivery
 Efficient use of capital
resources
 Providing institutional
commitment
 Project Development
 Selection of Developer
 Viability gap funding

15. COMMON PPP MODELSCOMMON PPP MODELS
ContractingContracting
Joint VenturesJoint Ventures
Build/ Rehabilitate, Operate, TransferBuild/ Rehabilitate, Operate, Transfer
Health FinancingHealth Financing
Mobile Health UnitsMobile Health Units
Social MarketingSocial Marketing
Technology (Telemedicine)Technology (Telemedicine)

16. WHY PPP IS IMPORTANT?WHY PPP IS IMPORTANT?
GovernmentGovernment--
 Helps to bridge the financial gap by stimulating private sectorHelps to bridge the financial gap by stimulating private sector
investment.investment.
 Improve efficiency and service delivery to users and gainImprove efficiency and service delivery to users and gain
access to new expertise and technology.access to new expertise and technology.
 Reduce annual cost of infrastructure to governmentReduce annual cost of infrastructure to government
PrivatePrivate--
 Investment would increase the quality of service and reduceInvestment would increase the quality of service and reduce
the time to implement .the time to implement .
 Opportunity for competition and innovation among privateOpportunity for competition and innovation among private
investors.investors.
 No regulatory or legislative restrictions in taking privateNo regulatory or legislative restrictions in taking private
investment in the delivery of public service.investment in the delivery of public service.

17. CURRENT FOCUS OF PPP IN HEALTHCURRENT FOCUS OF PPP IN HEALTH
Develop strategies-Develop strategies- To utilize strengths of the privateTo utilize strengths of the private
sectorsector
Enhance the capacity-Enhance the capacity- To meet growing health needsTo meet growing health needs
Reducing financial burden-Reducing financial burden- In tertiary careIn tertiary care
Reducing geographical disparity-Reducing geographical disparity- svc and its accesssvc and its access
Reaching remote areas-Reaching remote areas- Specific group of populationsSpecific group of populations
Improving efficiency-Improving efficiency- Evolving new managementEvolving new management

18. SIX KEY FACTORSSIX KEY FACTORS
1.1. Political environmentPolitical environment
2.2. Organizational StructureOrganizational Structure
3.3. Detailed business planDetailed business plan
4.4. Guaranteed revenue streamGuaranteed revenue stream
5.5. Stakeholder supportStakeholder support
6.6. Pick the partner carefullyPick the partner carefully
1818
CONDITIONS OF SUCCESSFUL PPP

19. PPP:PPP: Targeted Outcomes and BenefitsTargeted Outcomes and Benefits
Targeted Outcomes:Targeted Outcomes:
1.1.Accelerating investmentsAccelerating investments
2.2.Improved qualityImproved quality
3.3.Timely deliveryTimely delivery
4.4.Reduced costsReduced costs
5.5.Innovative solutionsInnovative solutions
Win-Win-Benefits:Win-Win-Benefits:
a)a)ConsumerConsumer:: delivery of a services thatdelivery of a services that
people want and would not have access to atpeople want and would not have access to at
the same price, in a business as usualthe same price, in a business as usual
situationsituation..
b)b)Government:Government: fulfillment of a politicalfulfillment of a political
need, social obligation, developmentneed, social obligation, development
imperative.imperative.
c)c)Private Sector:Private Sector: generate a profitablegenerate a profitable
revenue stream and expand marketrevenue stream and expand market
access.access.
The use of PPP for essential social and
economic infrastructure will enhance
the quality of services and relieve the
strain on the government budget
Risks

20. AREA OF RISKAREA OF RISK
Mainly project identification;Mainly project identification;
Assessment of cost, benefit and risk of the ProjectAssessment of cost, benefit and risk of the Project
Project DevelopmentProject Development
Procurement processProcurement process
NegotiationNegotiation
Monitoring, ImplementationMonitoring, Implementation
Ensure project qualityEnsure project quality
Transfer & ProcessingTransfer & Processing

21. OPPORTUNITYOPPORTUNITY
Maximizes the use of each sector’s strengthMaximizes the use of each sector’s strength
Reduces development riskReduces development risk
Reduces public capital investmentReduces public capital investment
Mobilizes excess or underutilized assetsMobilizes excess or underutilized assets
Improves efficiencies/quicker completionImproves efficiencies/quicker completion
Better environmental complianceBetter environmental compliance
Improves service to the communityImproves service to the community
Improves cost effectivenessImproves cost effectiveness
Shares resources, risks, rewardsShares resources, risks, rewards

22. CHALLENGESCHALLENGES
CapacityCapacity
Political StabilityPolitical Stability
Political commitmentPolitical commitment
Economic and Financial stabilityEconomic and Financial stability
Market DemandMarket Demand
Procurement ProcessProcurement Process
Lack of Trust on both sidesLack of Trust on both sides
Misunderstood as ‘privatizationMisunderstood as ‘privatization
Regulation and AccreditationRegulation and Accreditation
Consumer Protection Act (Safeguarding the interest ofConsumer Protection Act (Safeguarding the interest of
consumers)consumers)
Prime challenge is thePrime challenge is the
caPacitycaPacity
Prime challenge
is the caPacity

23. CONCLUSIONCONCLUSION
Public-private partnership (PPP) is not privatizationPublic-private partnership (PPP) is not privatization
•• Government continues to play a key roleGovernment continues to play a key role
•• Requires high degree of institutional capacityRequires high degree of institutional capacity
It does help in benefiting the poor.It does help in benefiting the poor.
It is one of the pragmatic options for health serviceIt is one of the pragmatic options for health service
deliverydelivery
BUT…..BUT…..
Not an alternative to public delivery or betterNot an alternative to public delivery or better
governance.governance.