In developing countries, and especially in Asia and Africa, infrastructure development and healthcare leadership are pathways to achieve and maintain sustainable long-term economic growth. Since governments in developing countries face constraints and have limited financial and operational capacities, more and more countries are choosing public-private partnerships (PPPs) as a tool to deliver necessary public services and develop innovative infrastructure. PPP Initiative Ltd.’s mission is to collaborate with governments, leading global universities, multilateral institutions and multinational corporations that are concerned with addressing complex issues to generate creative solutions.
PPP Initiative Ltd. takes a strategic and pragmatic approach in creating a conceptual framework to tackle policy issues, rather than utilizing a standardized set of transaction procedures and associated agreements. PPPs are generally considered as financing tools, but we have shown that a PPP can also function as an innovation tool.
Based on PPP Initiative Ltd.’s extensive research, practice and teaching we have identified four critical skills necessary to the success of a PPP: Negotiation, Innovation, Financial Structuring, and Political Management. Our successful and effective use of the four core PPP skills has enabled stakeholders to develop and implement innovative ideas, manage stakeholder expectations, define realistic financial assumptions, and increase project sustainability in the long run.
One area PPP Initiative Ltd. has focused on is healthcare. We believe the timing is right for new approaches to PPPs in healthcare. Healthcare is complex, and resources are constrained and very expensive. Leadership in healthcare PPPs eventually will come from Asia, and so our goal is to help build meaningful capacity to expand healthcare PPPs in Asia by employing the teaching and communication techniques we have been practicing, and also by introducing newer tools.
A public-private partnership is a collaborative organizational structure supported by public, private or non-profit partners who agree to share risks, resources, and decisions in developing and implementing certain projects. In a time of limited resources and growing challenges, governments, along with private, non-profit, and multilateral sectors need to do more with less and at lower risk.
PPPs can increase country competitiveness by leveraging the resources of a pool of stakeholders, including multilaterals and the non-profit sector. PPPs are a flexible, multi-sector and multi-dimensional way of addressing complex public-policy and development challenges in an increasingly integrated global context.
An Economic PPP is commonly associated with publicly controlled assets or services that produce growing and reliable cash flows such as toll roads, utilities, and sewage treatment plants. At an appropriate and acceptable price per unit, these PPPs allow for an adequate return for investors and re-investment in the public assets.
A Social PPP is commonly associated with public services that require government subsidies such as healthcare and water. In these examples, the poor may be regular users but cannot afford to pay a market price for a service without government support. Social PPPs are risky for investors, especially if government support may waver based on politics. In order to achieve hybrid goals of social motivation and financial sustainability, they have different incentives and risks associated with them than Economic PPPs. They require greater skill sets, strong creativity, and a flexible organizational model.