Opportunities

What are the most important things that the public sector brings to the table when addressing urban issues?

• Ability to reduce the "political risk" of the project.
• Political will based on local needs and recognition that private business parties are motivated by potential for profit
• Conditions and frameworks for private investment
• Financial resources.

What are the most important things that the private sector brings to the table when addressing urban issues?

• Creativity, experience, financing, technology, and other skills that can bring a project together and make it successful.
• Flexibility. Private sector actors can often be much more flexible than governments in developing solutions.
• Private sector approaches to problem solving. The private sector's "return-driven management" can help the public sector recognize that "time is money." In many situations, civil servants become more dynamic and enthusiastic when empowered to behave in a "private sector" manner or become involved in a "private sector" style process.
• Power to influence government. To many governments and politicians, rapid economic growth is still the most important goal, often at the expense of the environment. In many countries, the relatives and friends of politicians benefit the most. In such situations, private companies concerned about sustainable development may be powerful enough to force governments to abandon the more short-term and short-sighted policies.
• Creativity in responding to customer/community demand.
• Ability to mobilise financial resources.
• Access to technology, including know-how.

What are the most important things that either sector can bring to the table when addressing urban issues?

• Vision and Framing. Issues should be presented in a manner amenable to support and "investment" by both the public and the private sectors. A successful "vision" can emanate from either the public side or the private side as long as both sides can claim ownership.
• Committed individuals and champions of the process. Identifying these individuals up front will often determine the difference between success and failure of a project. Such people, either from the private or the public sector, must have the respect of both sides to ensure progress. When looking for appropriate private sector candidates, a certain measure of economic self-interest may be essential.

What does the public sector have a right to expect from the private sector when working together?

• Integrity, competence and a clear agreement on mutual expectations. Without clearly stated expectations early on in the process, it will often lead to failure.
• "Transparency" in operations. Too often the public sector assumes (usually from bitter experience) that the private sector is only interested in "plundering" the national heritage.
• Long-term commitment to a particular market/urban area
• Respect for the social goals to be met and decision making processes to be followed
• Clear explanations of why and how far a business is willing to go beyond immediately profitable activities.

What does the private sector have a right to expect from the public sector when working together?

• Predictability. Business often makes long term strategic decisions based on only partial facts. In most industrialised countries, private sector actors are comforted by relatively predictable legal systems, governments empowered to make binding commitments, and local populations that continue to support projects once they have determined that they are acceptable. In developing countries, where many of these variables are inconsistent and hard to predict, the private sector tends to have a lower tolerance for risk.
• Clear rules for business operations and administrative decision making
• Consistent application of such rules
• Respect for the profitability and timing pressures facing businesses
• Integrity and fairness in dealing with different groups.

What should either sector have a right to expect from one another when working together?

• Respect, for organisations, issues, human or environmental conditions, individuals, values, goals etc.
• Resources. Financial as well as other. Too often we identify problems and conclude that there is insufficient will to remedy them. One of the greatest resources in partnerships is a shared commitment to identify a problem and come to a solution.
• Recognition of sector specific constraints and needs
• Sharing financial responsibility
• Involving the final users of a service/project
• Feedback on project progress and effectiveness
• Respect for individual values when generating and synthesizing group values.

The Roles of the Different Sectors

Governments: Introduce initiatives, undertake reforms and set the stage for partnerships to be developed.

The Private Sector: Has technological, managerial, and financial resources as well as a proven track record (in most cases) of providing lower production costs, delivering services more effectively, maintaining capital equipment at a higher standard, making faster decisions, and offering greater choice.

NGOs and Community Groups: Act as intermediaries and can help crystallise community concerns and sharpen community awareness. Community groups provide an understanding of local needs and both NGOs and community groups lend expertise in program implementation and service delivery.

The Community Itself: Must move away from the terminology of using public-private partnerships as it is too limiting and expand it to include all stakeholders. In this way we can include not only the different sectors, government, business, and not-for-profit but also the community.

Urban and Rural Linkages: In urban areas, environmental concerns tend to be limited to the growing, well-educated middle-class. In rural areas, residents see their natural environment disappearing around them. The urban middle class is the more influential of the two groups: they express their opinions in the media, they influence the policies of private companies that they manage, and they formulate environmental policies for the government and political parties. Rural people are often active in civic organisations or have links with NGOs.

The Impetus for Partnerships: What it Takes to Get Parties at the Same Table

In theory, common goals should provide the starting points for joint efforts to address specific issues. In practice, however, businesses, governments, and communities are most likely to come together when faced with tremendous crises. Parties will often not sit down to find solutions until conditions have almost reached the point of no return. Somehow one must find ways to get started earlier.

The traditional "confrontational" position of the public and private sectors is clearly the obstacle to be overcome. Getting people to sit down at the same table is the first step. This can, in many cases, only be reached for one of two reasons: (i) the situation is so catastrophic that there is no alternative, or (ii) an impartial third party is inserted to provide a pretext for the initiation of the dialogue. This can be the role of the NGO and is one of the approaches used by UNDP in its PPP programmes.

Benefits of PPPs

• Introduce competition. Unlike most public sector activities, PPPs generally introduce an element of market competition. PPPs have been particularly effective in creating "contestable markets" without resorting to full privatisation.
• Increase entrepreneurship. PPPs can often harness the creativity, innovation, and speed of the private sector marketplace while retaining a commitment to the social or public interest.
• Promote local ownership and responsibility. Public projects are often seen as external and foreign by the very communities they are meant to benefit. Upkeep and maintenance will frequently suffer when the community has little or no understanding of how a project is supposed to work. With PPPs, communities are often better prepared to maintain projects because the projects have been initiated by the communities themselves.
• Address external costs. PPPs are well equipped to incorporate non-particular interests (e.g. clean air); intrinsic, non-material interests (e.g. beauty); inputs that cannot be individually priced (e.g. some information); and long-term social returns.

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