Overview of the Dutch Situation on Public Private Partnerships (PPP)

Transcription

1 Overview of the Dutch Situation on Public Private Partnerships (PPP) PPP: opportunity or problem? ZEW Mannheim/ Thementag PPP bei Bau und betrieb von Einrichtungen der Wissenschaft J. Krul L.L.M., Secretary General June 20, University Vermelding Corporate onderdeel Office organisatie

2 PPP in the Netherlands 1980 s/ 1997 First wave of attention towards PPP s Two major investment projects by the Ministry of Transport and Public Works, during the eighties: the construction of the Wijkertunnel and Noordtunnel road tunnels Second wave of attention towards PPP s In 1997 public-private partnership especially in infrastructure projects regained its political agenda status. June 20,

3 PPP in the Netherlands 2000 the government decides to introduce DBFM contracts to the Netherlands. A conscious choice was made for a process of controlled enlargement. Pilot projects were selected: the high-speed link infrastructure provider ( ICE ), the waste water management project around The Hague, and the A59 and N31 motorways. June 20,

4 PPP in the Netherlands 2005 I Establishment of a PPP infrastructure taskforce ( government, banks, construction companies and the Confederation of Netherlands Industry and Employers) which has drawn up a complete list of projects: Second Coentunnel Amsterdam; A2 Bypass near Maastricht; Maasvlakte 2, acces port of Rotterdam; Government Buildings Agency: four or five projects; Spatial Development: Amsterdam and Groningen. June 20,

5 PPP in the Netherlands 2005 II PPP has become a standard part of the decisionmaking process: In major projects in the field infrastructure. Each project that exceeds million is now evaluated against the added value of PPP. The same applies for the Government Buildings Agency for projects exceeding 25 million. Additionally, the defence and agriculture ministries will be evaluating their major investments. June 20,

6 PPP in the Netherlands 2005 III Efforts to standardise have been made, based on experiences with the pilot projects. This will reduce transaction times and costs. The DBFM handbook and sample contracts for road construction recently introduced and standard contracts for schools will soon follow. June 20,

7 PPP Types and dilemma s Two types of PPP PPP as a joint (area) development PPP as an integrated contract Some dilemmas concerning PPP The budgetary process of the national government versus the time frame of integrated contracts; High transaction costs and the need for deal flow; The role of architecture in integrated contracts; Innovation versus proven technology; Contract versus trust; Lowest price versus high economic value. June 20,

8 PPP General prerequisites How do you exploit the opportunities for added value offered by a PPP? By: taking an output-oriented approach (cultural change); optimising the scope of the project; establishing the right form of partnership; procuring the project through competition under applicable EU rules. June 20,

9 PPP Criteria In a PPP project: government agencies and the private sector work together on the basis of clear contractual agreements; the division of responsibilities, costs and risks is agreed by contract; both public-interest and commercial goals are served; both sides expect, through collaboration and the input of each side's specific expertise, to achieve a better result for the same cost (or the same result for less cost); each side retains its own identity and responsibility. June 20,

10 When is a PPP appropriate? 1 For each project PPP assesment in advance by the authority concerned whether public-private collaboration can deliver added value and whether a PPP is a realistic option. If public-private partnership is to be a realistic option, there are a number of basic conditions that must be fulfilled. A clear purpose of collaborating with the private sector. On the basis of a prior evaluation there must be an indication that collaboration with the private sector can deliver added value relative to alternative manners of implementation. NB: in the case of integrated PPP contracts this evaluation can be carried out with the aid of an instrument developed specially for the purpose by the PPP Knowledge Centre: the Public Private Comparator (PPC). June 20,

11 When is a PPP appropriate? 2 There must be clear objectives shared by both sides, government and the private sector. The political will must exist, and there must be administrative commitment both to the project and to the involvement of the private sector in its implementation. The collaboration must offer benefits in respect of controlling the risks attendant on the project (through transferring risks to private sector companies that are better equipped to control them), and/or the risks must be capable of being shared. The contours of the project must be sufficiently clear before any partnership with the private sector can be entered into. On the other hand, the project must not already have been fully mapped out since that would leave no room for effective input from the private sector partner or partners. There must be sufficient manifest interest in the project and the proposed PPP in the private sector. June 20,

12 PPP Analysing instruments I CBA (cost/benefit analysis): is about the optimal solution to the problem PPC (public private comparator): is about choosing the optimal course of a solution to a problem. Is a PPP the way to move forward? PSC (public sector comparator): is about comparing the private biddings June 20,

13 PPP Analysing Instruments II CBA PPC PSC Focus Phase Utility & necessity Problem analysis & examination Efficiency Examination, planning Result Best solution Added value PPP Takes into account Social costs & benefits Financial costs & benefits Efficiency Planning, preparation Most efficient variant to realize solution Financial costs & benefits June 20,

14 Education in the Netherlands (indication) educational level m2 gross area x mln number of students number of institutions universities 4, colleges 2, professional & adult 6, secondary primary totaal 26,5 sources: 2003/2004, CBS, Ministry of Education, various institutions June 20,

15 PPP in (Higher) Education I Only a few concrete examples of primary and secondary schools managed by local government Due to to little common causes and political sensitivity regarding making a profit with public services Focus is on societal and content not financial added value Montaigne secondary school of The Hague: first DBFMcontract incl. maintenance/ 30 years term/ 2, 75 fte for 2,5 years ppp preparation: added value? June 20,

16 PPP in (Higher) Education II Lessons of the Montaigne project: Standardisation of documents and procedures to realize future projects faster Advantages PPP: more value for money/ more time for core business/ possibilities to cooperate with new partners Conditions: enough time for preparation/ strong leadership/ creativity and open mind to new ideas/ commitment of all parties June 20,

17 PPP in (Higher) Education III Research results Faculty of Architecture/ DeaprtmentSection Real Estate & Housing (prof. H. de Jonge/ diplom ing A. den Heijer, PhD-student) PPP: chances of creating societal and content added value are bigger than creating financial added value June 20,

18 13 universities in the Netherlands: 180,000 students 4.5 million m2 gross floor area 16 km2 land property 1200 buildings

19 PPP in (Higher) Education IV Dutch Universities: Are reluctant because of different strategic goals of universities and commercial private parties Cooperation is therefore to be sought with partners with common goals and interests of a business economics of societal nature Partnerexamples: housing association ( student housing)/ Research institutes (TNO=fraunhofer)(science parks/ incubators)/ Fachhochschule (sharing campus facilities) June 20,

20 Erasmus University Rotterdam: - facility sharing with various private parties - cooperating in city marketing projects - PPS with housing cooperations for (international) student and faculty housing June 20,

21 Delft University of Technology: - facility sharing and sharing a campus with technology institutes and colleges - PPS with housing cooperations for (international) student housing - developing Technopolis / science park June 20,

22 Developing Delft Technopolis in cooperation with: -the city of Delft - private developers to attract more technology based institutions

23 Statements for discussion 1. PPS is not useful if generating financial means is the goal --> the university will always pay for the uncertainties and risks in their dynamic context 2. In the Netherlands universities are the private parties in Public Private Partnerships 3. For universities there is more to gain in cooperating with public parties than with private parties, because they share more goals 4. PPS should focus on primary processes instead of secondary processes June 20,