private sector in service delivery and the replacement of public monopolies by private .... Government provides regulations and medicine supply from patient's ...
Research Journal of Social Sciences, 4: 57-60, 2009 © 2009, INSInet Publication
Making Effective Private Public Partnership in Local Government Wilfred Uronu Lameck P.o.box 2 Mzumbe University, Tanzania Abstract: From the mid of 1980 the role of government has been changing from public sector led economies to private sector led economies particularly in developing countries. The motive behind this has been in efficiency and ineffectiveness of the public sector in service delivery. There has been a push from donor agencies and through Structural Adjustment Program me to developing countries to involve private sector in service delivery and the replacement of public monopolies by private competition for the purposes of increasing efficiency in production and service delivery. It has therefore been indispensable to introduce strong, efficient, and effective private sector in service delivery. This paper therefore aims at addressing the following four fundamental questions that local government should take into consideration before embarking on partnership. • • • •
W hy local governments need partnership in service delivery? W hat are the criteria which can be used to determine potentialities for partnership in the Local government? W hat are the problems that local government is likely to face when engaging in partnership and how these problems can best be talked? W ho are the stakeholders and what are the benefits of involving them?
The four current books on private public partnership in Municipalities are used for discussion and literature from journals and author’s own experience is used to support the discussion and eventually conclusion and recommendations. Key words: procedures of getting into PPP involves identification of services to be undertaken by PPP, conducting cost benefit analysis, discussing with council management team and council committee and eventually making final decision. [3 ]. Following the above procedures PPP has brought about negative and positive impacts in service delivery and most of the very important procedure which need to be taken in consideration in undertaking PPP such as unbundling of service to separate provision from production function has been ignored. Therefore this paper aims at analysing the argument for Private Public P artnership and its application to M orogoro Municipality, Principles and criteria that can be used to determine service which are potential for partnerships, services provided by Municipality which have greatest potentiality for partnership ,key partners, the benefits of involving them, their roles and skills and eventually the obstacles that the council may face in partnership and the way forward.
INTRODUCTION Private Public Partnership in Tanzania and M orogoro M unicipality: Local government authorities in Tanzania have been underperforming in services delivery to the citizens because of lack of efficiency and effectiveness and unskilled manpower and financial capacity as well as technical capacity. The response to that has been working in the network of partnership which covers the variety of relationship aims at creating synergy and delivering strategy and development, in policy perspectives public private partnership means cooperation between actors in the public and private sector for mutual benefits and mobilization of coalition of interest drawn from different sectors for the purpose of organizing the agreed strategy for development. Private Public P artnership in M orogoro municipality particularly is a new phenomenon and it is in infancy stage. Reasons for application of PPP based on the need to improve service delivery through the improvement of quality and quantity, increasing revenue collection, increasing cost effectiveness.[3 ] The
Argument for Private Sector Participation in M orogoro M unicipality: Theories suggest that private
Corresponding Author: Wilfred Uronu Lameck, P.o.box 2 Mzumbe University, Tanzania 57
Res. J. Soc. Sci., 4: 57-60, 2009 sector is justified by its ability of resources such as finance that can help the public sector to reduce fiscal problem, its technical knowledge in planning, designing, monitoring and construction management that the public sector may not have. It may also help government to allow only tendering and maintaining oversight and accountability. [5 ] Basing on this the partnership is relevant in the M unicipality because of limited budget and staff with enough technical skills, Monitoring, designing and construction as well as management techniques that the private sector can bring in through partnership. Private sector involvement on the other hand can bring big improvement quality and bring costeffectiveness, economic efficiency through operating performance and capital investment, access to capital market, directing subsidies to less served group and managerial expertise.(W orld Bank).In the Municipality there is a problem of technology especially in water supply and sanitation and there is problem of efficiency due to lack of managerial expertise and many people who are poor are underserved due to limited capacity. Therefore involving private sector will bring in improvement particularly in new and effective style of management and techniques in service delivery. Besides that the introduction of private sector can bring decision making culture which based on business principles and minimizing bureaucracy, developing alternative sources in service delivery and the introduction of performance management system. [5 ] In the municipality there is a problem of long procedures and process which delays decision making for example for maintain the water pipe can take long time hence causing lack of water to clients. Basing on this introduction of private sector will bring in quick decision making and activities based on performance appraisal which may result to efficiency. In connection to that Private sector is believed to be competent in managing risk than public sector because of high technology in undertaking project within a short time and ability of using economies of scale and innovation to improve the quality of product is another justification for private sector in the municipality because we do not have expertise knowledge in economies of scale. Above all private sector can generate revenue through the third part by for example disposing surplus assets which normally can help in running project when there is no cash flow from the government and accompanying incentives which is paid to private sector when the required service standard has been met through the accomplishment of the project can influence the perfomance. [3 ] Private sector in the municipality is relevant because it will help to facilitate the project when there is financial crisis in the council.
Arguments for Potentialities of Partnership on the Basis of M arketability Criteria: First there are goods which are public in nature and the private sector cannot adequately provide them. O ne cannot be excluded from consumption of these services and there is no competition in consumption for example street roads cleaning and security services.[1 ]. In this kind of service private sector need to cooperate with public in the provision. The public sector in the municipality may bring in regulation and finance in the provision of cleaning services. Sometimes this kind of services like security may provided by public sector itself because of its public nature. Second argument based on merit goods that everyone should have access to them in the society regardless the ability and willingness to pay for them for example health service. Therefore this kind of service should be provided jointly by public and private sector.[1 ] Therefore in the municipality healthy service can be provided jointly by private and public sector to ensure accessibility to everyone. Another criterion that can be used is environmental externalities. The Some services have high positive and negative environmental externalities and some of them are excludable and not rival for example sewerage system. Its collection has positive environmental externalities and if it is not collected it will have negative externalities. It is important to provide it jointly because it is not rivalry. The government can take party in making strong regulation and providing finance for private sector to operate. [1 ] In connection to that some projects may need high capital investment which has low potentials of cost recovery like installation of water infrastructure in the city. Therefore this requires public investment and the private sector can work with public in contract basis in municipality the problem of inefficient and ineffective sewerage collection which can also be solved through joint service provision in partnership. Major functions of the municipality are in the table below. Legend; this shows potentialities of partnership and stakeholders roles, skills and benefits. In the table (2) above scores 1-has lowest potentials for partnership, score 2 has medium potentials and score 3 has highest potentials. Therefore in fru stu ral d esig n, c o n stru c tio n , m a in te n an c e, purchasing of vehicles and management of terminals and parks have high potentials for partnership. Private firms can bring new skills and advanced technology in the infrastructure design, construction, maintenance and business management techniques in the management of parks and bus terminals. Fund for these activities may come from local government taxation and private sector through investment .NGOs can provides information concerning citizen’s demands and can act as watch dogs and Community can participate in ensuring security 58
Res. J. Soc. Sci., 4: 57-60, 2009 Table 1: Exam ple of som e core function of M unicipality and m ajor com ponents. Service Com ponents D escription Clean W ater Regulation,infrastructure,D istribution Private sector ensures in house water supply through fund from consum ers and governm ent provides regulation --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------H ealth service Regulation,construction,m edicine supply and staff G overnm ent provides regulations and m edicine supply from patient’s user fees and governm ent fund and private sector construct building through tendering. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Solid waste M anagem ent Regulations,collection,transportation and disposal site Local govern m en t p rovides disposal site and regulation by using taxation from governm ent and collection, transportation and disposal is done by private sector and in house by CBO s.Fund from m onthly paym ent of consum ers. Table 2: O ne of the functions is chosen here for analysis basing on M arketability criteria. M AJO R Potentials for Characteristics of Potentials for Public service Environm ental Potentialities CO M PO N EN T com petition good or service cost recovery obligation externalities for partnership Regulation Low(1) Public(1) Low(1) M any(1) H igh(1) 1 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Infrastructure design H igh(3) Public(1) H igh(3) M any(1) H igh(1) 1.8 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Construction of roads H igh(3) Private(3) H igh(3) M edium (2) Low(3) 2.8 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------M aintenance of roads H igh(3) Private(3) H igh (3) Few (3) Low(3) 2.8 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Purchase of vehicles H igh(3) Private(3) H igh(3) Few(3) Low(3) 3 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------M aintenance of vehicles H igh(3) Private(3) H igh(3) Few(3) Low(3) 3 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------M anagem ent of parks &term inals H igh(3) Private(3) H igh(3) Few(3) Low(3) 3
Conclusion: Private Public Partnership is therefore solution to networking governance as it involves different actors like private firms, NGOs, CBOs and government to create a synergy in increasing efficiency and effectiveness in service delivery. However if it is not implemented with care the conflict of interest may cause some actors particularly government to lose much out of it. For example some actors like private sector is profit oriented and the government is thinking of serving all people equally particularly disadvantaged groups. T herefore the government need to have a very strong regulation before entering into partenership,it also have to make sure that objectives are well sat, risks are shared, by all actors and services are unbundled to get components which can best be provided by private sector. Doing all this may help in minimizing the negative impacts of partnership.
Problems That the Council M ay Overcome in Partnership and the W ay of M inimizing Them: First of all lack of specific goals of partnership can be a problems, thus to avoid unclear goals from actors the broad goal should be broken into more specific to eliminate a room of some actors creating other goals for personal interest or for realizing hidden agenda. Second problem actors may automatically vary as some may be thinking about creating more wealth for example private firms and others may be thinking about distributing wealth to poor and marginalized group for example government and NGOs. Therefore the government should think of where market can not work and intervene or provide subsidies to provider to the level of effective demand. Another problem may arise in sharing resources cost and benefits and balance of powers. For the issue of resources cost it may sometimes take long time to reach agreement and and hence costing time and for partners whose objectives have been archived may not feel full responsible and accountable. Thus it important that social costs and benefits are shared by all partners. For the issue of balancing powers it is important that there is a clear regulation on sharing of resources because in practice those with resources for example finance may withhold power. Partnership may have impacts on other services and hence causing confusion in the realization of objectives by other actors and partnership may also influence some people especially professionals to make use of it to realize their hidden objectives.[4 ] Therefore it is important to have effective control and regulations.
Recommendations: The local government at the Municipality should ensure that there is framework of rules and regulations to govern private public partnership. There should be clear unbundling of service to separate provisional function from production before engaging in partnership. The government should deregulate to ensure competition for the purpose making market instrument effective partnership. The government should bear in mind that the private sector is normally for profit making or wealth creation and its role is wealth distribution. Thus the strike of balance between the two is indispensable for making service delivery effective. 59
Res. J. Soc. Sci., 4: 57-60, 2009 Stakeholders of the partnership should articulate their interest clearly and objectives should be clear before engaging into partnership.
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Bartley, R., 1996. Public-Private Relationships, and Performance in Service Provision, urban studies vol. 33. Fevrier, B., 2003. Guideline for successful Private Pu blic P artnership s, E u ro p ean commission Directorate, General Regional policy. Ngowi, H., 2006. Public Private Partnership in s e r v i c e delivery,application,reasons,procedures,results and challenges in T anzania Local government a uth o rities, eco no m ic s d ep a rtm e nt,M z um b e University. http://Un.pan1.un.org/intradoc./groups/public/publi c/documents/AAPAM /UN PAND 26076.PDF.10 December 2008.12.24.
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