Course Name: Introduction to Business

Course No # EM-501

SUBMITTED TO:
Dr. Md. Salim Bhuiyan
Professor
Department of Management Studies
University of Dhaka

Date: 21st August 2010.

SUBMITTED BY:
Santanu Palit Roll no/ID: 3-10-18-004
Mohammad Helal Uddin Roll no/ID: 3-10-18-053
18th Batch

EVENING MBA PROGRAM

Department of Management Studies
University of Dhaka

TABLE OF CONTENTS
PART TITLE PAGE No.

1
 No. Executive Summary:
1.0 Introduction 4

1.1 Concept of Public-private partnership: 4

1.2 Regarding Public-Private Partnership (PPP) 4

PART: 1
1.3 Reasons for Public-Private Partnership 5

1.4 Key Benefits of Public-Private Partnership 5

1.5 Sectors of PPP in Bangladesh: 6

2.0 Health Sector 6

2.1 Motivation of the private sector 6

2.2 Public sector tools available to work with the private health sector 6

2.3 Concluding thoughts 7

2.4 The Case for Engaging NGOs in the HIV/AIDS Sector 7

2.5 Cultural competency and innovation 7

2.6 Linkages and knowledge networking 7

2.7 Responsiveness and flexibility 8

2.8 Community mobilization 8

2.9 Accountability and commitment 8

PART-2
2.10 Cost effectiveness 8

2.11 Challenges to NGO Engagement 8

2.12 Technical capacity 9

2.13 Enabling environment 9

2.14 Competing priorities 9

2.15 Representation 9

2.16 Stigma 10

2.17 Lessons in Effective Partnerships 10

2.18 Overcoming Challenges to NGO Engagement 11

2.19 Key Features Non-Government Involvement in Bangladesh 11

TABLE OF CONTENTS

PART TITLE
PAGE No.
No. Executive Summary:
3.0 Energy Sector 12
PART: 3
3.1 Energy Resources in Bangladesh 12

2
 3.2 Power situation 12

3.3 Commercial Energy Crisis 12

3.4 Renewable Energy Resources 12

3.5 IDCOL Solar Energy Programmed 14

3.6 Benefits 14

3.7 Findings 14

3.8 Recommendations 14

4.0 The Spectrum of Relationship in PPP 15

4.1 Who are the Partners? 15

4.2 Judging Effective Partnership 16

4.3 Criteria for Judging Effective PPP 16

4.5 Public-Private Partnership and SAI Bangladesh 16

4.6 Clear distinction between the roles and responsibilities of the public and
17
PART: 4 private sectors
4.7 Obstacles 17

4.8 Lack of communication between the public and private sector 18

4.9 Potential Misconceptions 18

4.10 Possible Messages 18

4.11 Recommendations 19

4.12 Conclusion 19

PART -1
1.0 Introduction:

Over the past two decades, political and public service leadership around the world has included the
forging of innovative arrangements described as public-private partnerships (P3s). Although the term P3s
is often applied only to collaborative arrangements between public organizations and business firms, it is
also interpreted more broadly to cover public sector partnerships with a wide range of organizations
outside of the public sector, including such entities as community, voluntary and non-governmental
organizations (NGOs). Since the term is sometimes used loosely to refer to virtually all types of
interaction between the public and private sectors, a brief definition is required. Nowadays PPP is a very

3
common and important term in our country, Bangladesh. It is opening a new horizon of success in many
sectors of Bangladesh.

1.1 Concept of Public-private partnership:

Joint initiatives developed, executed, and managed

Public sector Agency Private sector entity

1.2 Regarding Public- Common Goals and Private Partnership

(PPP): Individual Objectives
 Definition of PPP:

A partnership can be defined as the pooling

of resources like labor and money by
organizations that share decision-making
power, risks, and benefits in the pursuit
of compatible objectives. It is this
sharing that distinguishes a PPP
from other relationships between
the public and private sectors, including the traditional contractual arrangement whereby a public
organization pays for the delivery of products or services. However, many PPPs are formalized
by a contract. Scholars have classified PPPs in various ways, but partnerships involving power-
sharing are often termed “real,” or “collaborative,” partnerships, whereas those involving a
sharing of only work or resources are described as “operational” partnerships. PPPs vary greatly
in their purposes and participants.

 PPP is a contractual agreement formed between a public agency and private sector entity

 PPP allows greater private sector participation in the delivery of services

 PPP allows the public agencies to tap private sector technical, management and financial
resources to achieve certain public agency objectives such as

4
 • Greater cost and schedule certainty,
• Supplementing in-house staff,
• Innovative technology applications,
• Specialized expertise or access to private capital.

1.3 Reasons for Public-Private Partnership:

 Accelerating the implementation of high priority projects by packaging and procuring services in
new ways.

 Turning to the private sector to provide specialized management capacity for large and complex
programs;

 Enabling the delivery of new technology developed by private entities;

 Drawing on private sector expertise in accessing and organizing the widest range of private sector
financial resources;

 Encouraging private entrepreneurial development, ownership, and operation of related assets;

 Allowing for the reduction in the size of the public agency and the substitution of private sector
resources and personnel.

1.4 Key Benefits of Public-Private Partnership:

PPP provides benefits by allocating the responsibilities to the party – either public or private – that is best
positioned to control the activity that will produce the desired result

 The primary benefits of using PPP to deliver services include:

• Expedited completion compared to conventional delivery methods

• Cost savings
• Improved quality and system performance from the use of innovative materials and
management techniques
• Substitution of private resources and personnel for constrained public resources and
• Access to new sources of private capital.

How are risks and rewards allocated in public-private partnership?

 Risks are allocated to the party that is the best equipped to manage them

 PPP contracts often include incentives that reward private partners for mitigating risk factors

Promoting Public-Private Partnership in Bangladesh:

 Fast changing policy situation with globalization and deregulation recognizes increasingly
important role of private sector in Bangladesh

 Bangladesh has a very rich experience on PPP, especially in respect of the scope and diversity of
Non-Government Organization (NGO) activities in social service.
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1.5 Sectors of PPP in Bangladesh:

 Health Sector

 Education Sector

 Infrastructure Development

 Tourism Sector

 ICT Sector

 Industries

PART -2
2.0 Health Sector:

2.1 Motivation of the private sector:

 Private health sector providers need to earn a profit to stay in business

 Are motivated by other factors common to public sector
o Pride in skills and competency
o Sense of professionalism
o Desire to improve health of patients and community
o Social mission
o Strategic relations with local government
 Public sector has more in common with private sector than you think

2.2 Public sector tools available to work with the private health sector:

1. Financing

•Health insurance
•Community based finance schemes
•Vouchers
•Tax exemptions

2. Regulation of private (& public sectors)

•Licensing
•Accreditation
•Certificate of need

3. Contracting

•Leasing
•Concessions
•Divestitures

2.3 Concluding thoughts:

6
The private sector is already playing an important role in health care provision and this role will continue
to expand significantly. Private sector is an untapped resource but there are many challenges. To harness
the private sector will require changing roles, MOH leadership & help. It is time to bring the private
sector into the fold as partners to provide Quality health services

2.4 The Case for Engaging NGOs in the HIV/AIDS Sector:

Local NGOs around the world have demonstrated their capacity to mobilize communities and to act as
intermediaries for a wide variety of population groups. NGO responses are increasingly recognized as
critical in tackling the HIV/AIDS pandemic. NGOs are often far more efficient and effective at providing
services than state agencies.

In responding to the HIV/AIDS pandemic, local NGOs bring a collection of experiences, technical
capabilities, and connections that make them indispensable. NGOs often have a comparative advantage in
responding to the complex and evolving landscape of HIV/AIDS. The strengths of local NGOs contribute
significantly to their successes and the sustainability of their activities can be derived in one way or
another from the close connection that the organizations have with the populations they serve.

2.5 Cultural competency and innovation:

Most NGOs have a thorough understanding of local communities; they know the details of local
constraints and issues and can effectively prioritize problems within their context. Local NGOs know how
HIV/AIDS is understood and viewed in a particular community or sub-set of a community, and they can
talk about it and initiate actions in ways that are understood by the community and deemed appropriate
and acceptable.

Local NGOs often have a comparative advantage over governments, INGOs, and donors in their ability to
inspire behavioral change, shape public discourse, and draw local attention to HIV/AIDS and the actions
needed to combat it. By utilizing their comprehensive understanding of social, political, religious, and
economic circumstances, local NGOs are often best prepared to identify new approaches and design new
activities to locally resolve specific problems.

2.6 Linkages and knowledge networking:

Local NGOs are uniquely positioned to initiate and establish close working relationships with other
locally based groups in the public, private, and voluntary sectors. Partnerships and collaborations among
different institutions allow local NGOs to focus on more specialized programmatic areas and enhance
their ability to increase referrals to other NGO and governmental services. These partnerships also
encourage networking, sharing best practices, and mentoring, thus encouraging more local ownership.

2.7 Responsiveness and flexibility:

Based on their size, operating structure, and connection to the communities they serve, most local NGOs
are in a better position than government bureaucracies to respond quickly to identified needs and
opportunities at the community level. These characteristics also allow NGOs to respond flexibly to the
complex and rapidly evolving pandemic, make mid-course adjustments as necessary, and tailor existing
programs to local realities. For these reasons, local NGOs are able to rapidly scale up community
programming and quickly and efficiently engage their communities to address HIV/AIDS-related
advocacy issues.

7
2.8 Community mobilization:

Many NGOs use their strong connections with beneficiary populations to garner community investments
for interventions being undertaken. NGOs are among the strongest supporters and practitioners of
methodologies that encourage local participation. Local NGOs have demonstrated their effectiveness in
using participatory tools such as community mapping, focus groups, and participatory evaluation.

2.9 Accountability and commitment:

Many of the NGOs involved in HIV/AIDS programs employ individuals who have been personally
affected by the pandemic. Their commitment to making a difference is apparent in their passion and
degree of involvement. Leaders of local NGOs have often worked in the health sector in their
communities. These dynamic leaders can easily gain the respect and trust of both beneficiaries and local
health care and other support service providers. These leaders may also assist in the reduction of the
stigma surrounding HIV/AIDS by:

 Involving people living with HIV/AIDS in stigma research and program design and evaluation;
 Empowering communities to address stigma through awareness of accurate and updated
information about HIV/AIDS and accompanying stigma;
 Integrating and/or mainstreaming HIV prevention, care, treatment, and support activities into
existing programs and facilities whenever possible;
 Promoting legal and policy environments that keep stigma and discrimination in check;
 Developing more practical tools for understanding and addressing the stigma;
 Creating an environment that promotes stigma reduction within healthcare facilities, i.e., one that
includes training, sensitization, and performance standards

2.10 Cost effectiveness:

Local NGOs are often embedded within local communities and economies in such a way that they can
provide services and assistance at a fraction of the cost that would be needed if the private sector or
government entities were to implement the same programs. Activities targeted at individuals and families
are often efficiently implemented by linking complementary services at different levels with each
organization carrying out actions from their own sites.

2.11 Challenges to NGO Engagement:

Most of the identified weaknesses and criticisms revolve around aspects of institutional capacity and
limited scale impact. However, these criticisms often fail to recognize the broader infrastructure problems
inherent in many developing countries that inhibit the growth and capability of the NGO sector. While
many of the critiques of local NGOs are valid, it is not always sufficiently recognized that the most
effective way to increase capacity is through practice. In planning for assistance, it is helpful to recognize
the limitations and weaknesses that NGOs often struggle with. The key to becoming a more effective
organization is to be able to identify their own weaknesses.

2.12 Technical capacity:

The burden of providing effective HIV/AIDS services, particularly to marginalized groups, often falls on
NGOs that may or may not have sufficient resources, experience, and tools to address the vast needs in
their communities in a way that would be considered adequate from a public health perspective.

8
The myriad of skills expected from local NGOs is daunting and an area of increasing concern particularly
in the complex situation of responding to the HIV/AIDS pandemic in resource-constrained settings.
NGOs are expected to provide professional, community-based services in conjunction with professional
monitoring, evaluation, and reporting. All of this is expected with scarce resources, inadequate access to
technical assistance or standards, and little to no government guidance or support.

Replication or scale-up becomes a significant problem because it is difficult for NGOs to obtain sufficient
infrastructure and staff to expand. Many local NGOs suffer from “brain drain” as trained professionals are
hired away from their home communities by NGOs paying higher salaries. As a result, attracting and
sustaining fully qualified and trained staff is yet another challenge.

2.13 Enabling environment:

Many developing country governments have looked suspiciously upon civil society and NGOs as
dissident political forces rather than complementary partners in development planning and
implementation. While this is changing in many parts of the world, unfavorable legal, regulatory, and tax
constraints continue to exist in many countries. Implementation of the necessary reforms may be
extremely difficult in situations where government institutions and NGOs are competing for scarce
assistance resources; there are genuine philosophical or programmatic differences, or a difference of
opinion about the need for urgency.

2.14 Competing priorities:

International NGOs inherently have greater access to resources than most national and local organizations
and this access can give them the luxury of becoming strategically focused and donor-specific. Local and
national NGOs on the other hand must often hop from project to project, frequently with different
objectives and approaches, to keep the revenue flowing. This can limit their ability to focus and
concentrate on becoming institutions of excellence in a particular service delivery area. The structures and
values of NGOs can come to mirror those of the donor, and NGOs can face pressure from a donor to
conduct a project in a manner that would compromise an NGO’s principles.

2.15 Representation:

One result of the substantial increase in the amount of interest, attention, and resources being devoted to
NGOs in the HIV/AIDS arena is that NGOs are being created without all of the traits and characteristics
that give these institutions their comparative advantage.

Many NGOs become more akin to consulting firms than civil society organizations. These organizations
may be composed of very smart and capable

Individuals, but they are often pursuing their own income-generation and diversification strategies rather
than more altruistic objectives like community empowerment and development.

2.16 Stigma:

Receiving increased donor funding may give the NGO and community more visibility and, in some cases,
increased stigmatization particularly for those NGOs that serve marginalized populations, such as sex
workers, men who have sex with men, and injecting drug users. Increased stigma may lead people living
with HIV/AIDS to become severely demoralized and depressed.

9
2.17 Lessons in Effective Partnerships:

Elicit input from stakeholders:

Solicitation documents or program planning strategies those come out of an analysis of the operating
environment and the input of stakeholders result in effective programs. Stakeholders provide valuable
input into the criteria for partner selection in a particular context. Clear expectations and priorities
articulated by donors in solicitations and planning meetings help organizations determine if this is the
right opportunity for them and sets up the ground rules for a mutually beneficial relationship.

Make sure that partnerships are flexible:

The most fundamental constraint to effective partnership is the intrinsically hierarchical nature of the
donor-NGO relationship and the one-way flow of money from donor to local NGO to community.

Donors have requirements that include standard proposal procedures, report formats, duration,
expectation of time-bound results, and a number of others. On top of these, the NGO has its own
established structures, procedures, and requirements. It is imperative that donors recognize the strains that
local NGOs face and the difficulties they have in becoming learning organizations while, at the same
time, trying to make ends meet. Room must be made to accommodate a previously established local NGO
structure and procedures within donor reporting requirements.

Create relationships of trust:

Competing priorities must be accommodated in a relationship in which both donors and NGOs expect
mutual trust, respect, flexibility, transparency, and responsiveness to poor communities. Donors must
display trust in local partner organizations to effectively plan interventions and target beneficiaries in
their own communities. The ability and willingness of a donor to partner with a local NGO as a colleague
and peer providing advice and assistance in managing funding is much more effective than simply
“funding” the local NGO.

Enhance self-awareness:

In learning more about the characteristics of a particular NGO, a donor can help the NGO to learn about
itself and how it can grow as an organization. Through a participatory approach, donors can help NGOs
assess their needs and provide resources, technical assistance, and support to increase the ability of NGOs
to provide effective and efficient services.

Donors should seek information from local NGOs regarding their missions, prior experiences, program
maturity, technical expertise, absorptive capacity, financial capacity, internal organizational environment,
and how they fit within the larger HIV/AIDS landscape of NGOs and the government.

2.18 Overcoming Challenges to NGO Engagement:

Encourage multi-year and diversification of funding:

Donors should recognize that NGOs vary. Diversifying funding among different types of NGOs and
funding levels may increase their effectiveness at reaching their goals. Donors should allow and
encourage local NGOs to diversify their sources of support to encourage the project’s future

10
sustainability. Donors should also consider multi-year grants that are based on need rather than on
funding cycles. Additionally, donors need to be aware that their funding may increase unrealistic
expectations of local NGO staff, beneficiaries, and the community.

Short-term financing, in particular, places an undue burden on local NGOs to achieve unrealistic goals
within a limited time frame and prevents local NGOs from investing in long-term planning.

Encourage NGOs to fully assess primary and secondary effects of increased funding:

Successful engagement by local NGOs happens when local NGOs willingly align their goals and
missions with donor funding. NGOs need to recognize the positive and potentially negative consequences
that increased funding will bring. They need to make a conscious decision to move to the next level. Once
engaged with an INGO, local NGOs need to capitalize on the opportunity and use the increased funding
and visibility to leverage additional funding and advocate for themselves and those they serve.

2.19 Key Features Non-Government Involvement in Bangladesh:

In the Health Sector of Bangladesh the following key features of the partnership identified:

 In the total national effort to provide for health services, the government is a minor actor in terms
of the total health expenditures and peoples’ utilization of services, contrary to general
impressions

 It is evident that non-governmental organizations active in health and family planning have been
engaged in:
• a major collaborative relationship with the public sector services; or
• Have run their own complementary programs.
In case of public sector health care and family planning services:
• their quality does not generally meet a minimum acceptable standard;
• they have widespread reputation of mismanagement, corruption, inefficiency, and of
being devoid of a friendly service-provider attitude
• The public facilities are utilized considerably below their expected capacity.

 Preventive and basic curative care provided by NGOs are generally regarded as:
• more effective
• more client-friendly and
• utilized more frequently than public facilities

 The private sector service providers in health account for three-quarters of all health sector
expenditures

PART -3
3.0 Energy Sector:

The role of public private partnership in renewable energy sector:

3.1 Energy Resources in Bangladesh:

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 Resource Net Recoverable Reserve Production/Supply

Coal 281 million tones 310,000 tons/year

Crude Oil 5.5 million barrels 16.4 tones/day (June, 93)

(June, 93)

Natural Gas 15.4 TCF (June’2001) 1250 MMCFD (April’2004)

Natural Gas Liquid 45.4 million barrels (June’ 532 tones/day

2003)

(Source: MPEMR, 2004 p.64)

3.2 Power situation:

 Total Installed capacity: 5230 MW

 Actual production :3500-3800 MW in peak time
 Actual demand in peak time: around 6000 MW (grid connected area)
 Power shortage: 1500 MW to 2500 MW
 Access to electricity : 40%

3.3 Commercial Energy Crisis:

 About 85% of electricity produced from Gas

 Huge number of industries are using gas as fuel and raw materials
 Current proven gas reserve is only 8 TCF
 In business as usual scenario, it is expected that within 2011-15 proven gas reserve will be
finished
 Already government is going slow for new gas connection

3.4 Renewable Energy Resources:

Biomass:

 Fuel wood :8 million m3/y

 Agricultural Residues :12,021,201 metric ton
 Animal Dung: 27,202,000 tons
 Baggage, rice husk

Biogas:

 22 million cows and buffaloes produce 2.97XIO9 cubic meter of gas equivalent 3.04 million tons
of coal
 4 million biogas plants can be installed
 Poultry farms can produce aggregate 100 MW using biogas based electric generator.

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Source: http://www.lged-rein.org/biomass/resource_biomass.htm

Hydropower:

 Existing :230 MW (extension of Karnafuli hydro 100 MW proposed)

 210 MW can produce from Sangu and Matamuhuri rivers
 Assessment of selected rivers in the Northeast Region :161 MW

Solar Energy:

 More optimistic research –up to 4 million households

 More than 150000 Solar Home System (SHS) is installed up to 2007

Source: http://www.lged-rein.org/micro_hydro/resource_mihy.h

Public-Private Partnership in Renewable Energy Contents three basic characteristics:

1) Shared goals;
2) Shared or complementary resources such as financial capital, political influence, knowledge and
expertise, human capital, or time; and
3) Shared risks and benefits.

A successful public private partnership should fulfill three conditions at a minimum :

a) Benefits for private sector: generate a profitable revenue stream or expand market access.

b) Benefits for the consumer: deliveries of services that people want and would not have access to at the
same price, in a business as usual situation.

c) Benefits for the government: fulfillment of a political need, social obligation, development imperative.
Some points about PPP:

 In renewable energy sector in Bangladesh, government, private organizations/ companies and

some NGO are working with the help of donors.

 So far to achieve individual goals for both public and private have their own projects.

 Now its time for work together to get better result .so PPP is essential.

3.5 IDCOL Solar Energy Programmed:

The Model of renewable energy PPP in Bangladesh

 To promote solar home systems (SHSs) is being jointly financed by the IDA, GEF, KFW, and
GTZ mainly on off-grid area.

 15 partner private organizations (POs) are implementing the project

13
  For remote places government can’t supply electricity for high cost grid. So government assures
all kind of incentives for the project within the legal framework and support from local
government administration.

3.6 Benefits:

Pos and other private companies: with the ability to import tax-free, POs are expecting very short
period of pay back. Other companies sell their other electricity consuming appliances.

Government: enable services to reach a previously subserviced population. The investment burden is
shifted to the private sector. The cost and time is reduced.

Public: have electricity services. For longer installment and low interest rate, their monthly costs for
light, radio etc are the same but the new service is more stable and modern.

3.7 Findings:

 The main source of Commercial Energy is natural gas and natural gas reserve may be finished
within very short time.

 There is potential using renewable energy to reduce the demand and supply gap of energy in
future.

 Only government or private sector can’t solve the incoming energy crisis of the country

 Concept of PPP is widely used in many countries. It is proven that PPP concept could help to get
access energy to the poorer section of the people using renewable energy.

 Government has to take initiatives in policy level to address PPP.

3.8 Recommendations:

 Special financing banking schemes that would offer long-term, low-interest loans for the users of
the systems have to be developed.

 Emphasis should be given to private decentralized/ renewable energy projects to supply isolated
areas and/or to access the power.

 Facilitation of public-private partnerships in the RE sectors should be taken by government.

 Awareness about PPP concepts and an understanding of the role that different government
departments need to be developed.

 Training programs on the role of PPP would increase in the awareness and understanding.

PART -4
4.0 The Spectrum of Relationship in PPP:

14
  Parallel activities: Public and private activities are carried out without any contact with each
other or acknowledgement of the existence of each other

 Competitive activities: The activities in the public and private sectors are carried out with same
or similar objectives, targeting common clientele and competing with each other, which may
mean either wasteful duplication of activities or enlargement

 Complementary activities: Activities or services from the public and the private sectors
complement each other in terms of nature and content of services or geographical and population
coverage, either by design or incidentally

 Contractual services: The government contracts private sector for providing specified services
for agreed fees, with the contractor being accountable to the government authority.

 Cooperation and collaboration: Public and private actors work together on the basis of
shared objectives, strategies and agreed criteria regarding assessing process and outcome;
the partners also cooperate in developing common objectives and strategies and criteria for
assessment of activities.

4.1 Who are the Partners?

Public Sector Partners:

 National government
 District administration
 Municipal authorities
 Local government bodies
 Para-statal corporations
 State universities and research organization.

Private Sector Partners:

 Commercial for-profit enterprises

 Development-focused voluntary non-governmental organizations (NGOs)
 Cooperative societies
 Community-based organizations
 Religious organizations
 Professional organizations
 Trade unions
 Research and academic institutions
 Households

4.2 Judging Effective Partnership:

 The principles of “non-rivalry” and “non-exclusion” of public goods logically point to the criteria
of universality and equity in judging the value of partnership
 Given the competing demands on scarce resources in developing countries, efficiency in terms of
optimal benefits from a given cost must be an important criterion
15
  Accountability to various stakeholders regarding objectives, process and outcome in basic social
services also is a key consideration
 In other words,
• universality
• equity
• efficiency and
• accountability of basic services are the four sets of criteria for judging the design and the
results of partnership

4.3 Criteria for Judging Effective PPP:

 Universality

• refers to access for all who are eligible to a type of service; for example, universal
primary education for all children in the primary-school age group

 Equity

• is an elaboration of the universality criterion in terms of ensuring acceptable quality of

service for all; sharing of costs equitably when a cost is necessary to be imposed; and
special attention to groups disadvantaged due to historical, economic or cultural reasons

 Efficiency

• Have two aspects. Internal efficiency in terms of operations and management of an

activity to achieve maximum output for the least cost; and external efficiency in terms of
achieving best results in terms of objectives of the activity for the least cost

 Accountability

• Refers to holding the providers of services answerable to the beneficiaries and other
stakeholders regarding both process and outcome of a program. Openness and
transparency in management and a participatory approach in planning, making key
decisions, and evaluation are necessary conditions for accountability

4.5 Public-Private Partnership and SAI Bangladesh:

 The audit mandate of the SAI Bangladesh with regard to audit of PPP is clear. All PPP, where
the government has a majority interest are within the purview of audit of SAI Bangladesh

 The formidable task in this audit is the minimization of risks, which is achieved through
comprehensive audit plan

 The SAI is very careful in assessing the capacities of the private sectors in delivering the “public
goods” through partnership

 A public-private partnership within the SAI itself in terms of cooperation with the professional
accounting bodies and hiring of private sector experts is also being contemplated in this type of
audit.
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4.6 Clear distinction between the roles and responsibilities of the public and private sectors:

Particularly in the area of health, it’s noted that “there is a huge ambivalence about dealing with the
private sector” as it relates to roles and responsibilities. The main responsibility of the public sector
should be in providing a favorable policy environment which promotes public-private partnerships.

• The private sector has an important role to play for profit and not for profit but not the same as the
public sector.

• Through a clear distribution of the roles between the public sector (Ministry of Health ) and the private
sector (especially at the community level).

• The private sector takes advantage of the public sector unless there are strong systems in place to guard
against misuse.

4.7 Obstacles:

There are institutional, operational, political and cultural obstacles which need to be overcome. For
example, at the operational level there is an absence of a mechanism for the implementation of PPPs and
at the cultural level there is a perception that health services are a medical concern and therefore
communities are not involved in the implementation of such services. And at the political level, some
politicians in the field perceive certain associations or NGOs (private sector) as rivals.

There is an absence of real political commitment, policy and framework for PPPs at the national
level. The public sector needs to develop sound frameworks in which partnerships with the private sector
(for-profit or non-profit) and NGOs can be enhanced. At this point, there seems to be a lack of clear
operational frameworks in place which allow for PPP work. There also seems to be a lack of capacity,
especially in the public sector to implement the necessary health policies. The private sector in some
countries is also not strong enough to meet the increase in demand for health service delivery. A
communication strategy should highlight the importance for developing such policies and frameworks.

Mechanisms must be developed where the two sectors jointly participate in the planning process of
programs.

• Private sector should be fully involved including in the identification/ selection of the priorities and the
evaluation of the final outcome

• Through a direct and concrete integration of the private sector within the health

Programs (design of the program, implementation, etc)

• The private sector itself also needs to be educated on ways of working with the government without
undue influence from them. They should be part and parcel of the policy formulation team.”

• “Collaboration instruments to find ways to work with the private sector so it isn’t just a vendor or
contractual relationship but really a joint planning and joint funding of activities.

4.8 Lack of communication between the public and private sector:

17
They need to listen to each other and to cope with one another’s different approaches. There are instances
where the public and private sector will be working side by side with no communication as to what each
one is doing and it seems that the individual is the one who loses out. For example, “the largest referral
hospital has patients lying on the floor for lack of space, while the nearby largest private hospital   …will
have empty beds.” The two sectors can really learn from each other.

“From the private sector- the management strategy which they use is more efficient and effective and is
something ignored in the public sector. The issues of management, leadership and transparency are
something to admire.” The public sector can set the priorities to achieve health goals. This is an area
where a communication strategy can promote dialogue between the sectors.

4.9 Potential Misconceptions:

There seem to be some misconceptions about PPP which need to be addressed in a communication
strategy. And many times these misconceptions can lead to road blocks in PPP expansion as people are
reluctant to engage in a fruitful dialogue. Some of the important misconceptions identified are on
perceptions of the private sector. “There is a misconception in understanding the private sector. They feel
it is a way of getting more money, getting better salaries. They do not see the real issue is not the salary
but the effectiveness and using the best we have possible.”

Specifically, there is great fear of working with the for profit private sector. The concern seems to be that
if partnerships were created between this and the public sector- it would lead to more corruption. The
profit motive would lead to increased bribery and kickbacks. “Suspicion of the profit-making motive in
health.”

4.10 Possible Messages:

The health system needs to be considered in its entirety. Working with the public sector alone will not
achieve much progress. By engaging the private sector, there will be optimizing use of limited resources.
Specifically looking at how health problems in developing countries, there are needs to look at a multi-
sectoral approach, and involving the private sector on some of these issues to focus on sustainability.”

The potential of the private sector can be harnessed to increase coverage and quality of health
services- especially to the poor. Data from many countries show that many of the poorest go to the
private sector for health services. “The benefit is higher coverage reaching the maximum number of
people with a high quality of services.”

The public and private sector – each has its own comparative advantage. If both sectors were to work
together – with the public sector providing a policy framework for the population and the private sector
providing management and capacity, countries can come close to reaching the MDGs.

Implementing or expanding PPPs does not translate into increased health care costs. National
economies and specifically health costs will improve with private sector partnerships.

The role of the public sector does not diminish in working with the private

Sector. There is a misconception that the private sector will take over the responsibility of the public
sector if PPPs were institutionalized.

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“Investing in the private sector is not necessarily at the expense of the poor or disenfranchised. By
engaging the private sector, you have the potential to increase access to critically needed services and
goods that otherwise would not be available. The private sector, through either its manufacturing or
delivery capability are better positioned to deliver than the public sector, so its not at the expense of
anyone and it’s a win-win situation.”

“What you get (health service) is more important than who delivers it.” The quality of health care
service is more important than the source of its delivery. By partnering with the private sector you are
increasing access to good quality care.

4.11 Recommendations:

 Redefine the relationship between public & private involvement in infrastructure projects;
 Encourage closer cooperation between public and private sector.
 Promotional actions to be launched by government for PPP to attract private sector.
 Creation of One-Stop-Service for PPP
 Strengthen Board of Investment (BOI) to attract, involve and facilitate the PPP.

4.12 Conclusion:

The Government is trying to attract private sector in infrastructure projects like Highways, Expressways,
including mass-transit, flyovers, bus terminal, Airport terminal, aviation sector, ports, Railway rural
infrastructure & services etc. Bangladesh is a prospective market for foreign investors, since the
opportunities are abundant; and the legal, administrative and fiscal conditions are supportive. The
concerned Ministries, agencies, as well as the Chambers of Commerce & Industry will extend all kinds of
support and cooperation to assist foreign/private investors to participate in various
construction/infrastructure development projects in Bangladesh. The Government is going to approve the
Multi Modal Transport Policy where there is a clear cut directives to encourage and facilitate private
sector to invest in the infrastructure sectors in a bigger way.

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