Carvalho, João and Cruz, Nuno and Cunha Marques, Rui (2010): Local governments opting for PPPs in the schools sector.
Download (246Kb) | Preview
The Portuguese government recently launched a new program to refurbish the secondary schools all over the country. Along with this process more responsibilities are being transferred to local governments concerning pre and elementary schools. This is seen as the main motivation for the settlement of new local public private partnerships (PPP) within this sector. This paper discusses the public private partnerships (PPP) contracts in the Portuguese schools sector. Four national cases and a foreign experience are analysed. In this study, some of the sound practices presented in the literature are highlighted; we argue that some of these practices are not being applied in this sector in Portugal. A risk analysis for the schools sector was developed, hoping to contribute towards an increasing number of partnerships reaching the best possible value for money (VfM). Furthermore, we suggest several contract management guidelines and draw up some improvement proposals. We conclude that there is a need to enhance the transparency of the procurement phase, to normalise the contractual documents, and to assure a better risk allocation as well as an improved monitoring of the contract.
|Item Type:||MPRA Paper|
|Original Title:||Local governments opting for PPPs in the schools sector|
|Keywords:||contract management; public-private partnerships (PPP); public tender; risk allocation; schools|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation
H - Public Economics > H5 - National Government Expenditures and Related Policies > H52 - Government Expenditures and Education
|Depositing User:||Rui Cunha Marques|
|Date Deposited:||09. May 2010 14:29|
|Last Modified:||19. Feb 2013 00:19|
Audit Commission (2003). PFI in Schools: the quality and cost of buildings and services provided by early Private Finance Initiative schemes. London: the Audit Commission.
Bajari, P.; McMillan, R.; Tadelis, S. (2003). Auctions Versus Negotiations in Procurement: An Empirical Analysis. Journal of Law, Economics, and Organization, v. 25, n. 2, pp. 372-399.
Bajari, P.; Houghton, S.; Tadelis, S. (2006). Bidding for Incomplete Contracts: an Empirical Analysis, Working Paper, no, 12051, NBER.
Ball, R., Heafey, M.; King, D. (2003). Some lessons from using PFI for school building projects. Local Government Studies. v. 29, n. 2, pp. 89-106.
Binza, S. (2008). Public–private partnerships in metropolitan government: perspectives on governance, value for money and the roles of selected stakeholders. Development Southern Africa, v. 25, n. 3, pp. 297-315.
Boussabaine, H.; Kirkham, R. (2004). Whole Life-cycle Costing: Risk and Risk Responses. Oxford: Blackwell Publishing.
Carayannis, E.; Popescu, D. (2005). Profiling a methodology for economic growth and convergence: learning from the EU e-procurement experience for central and eastern European countries. Technovation, v. 25, n. 1, pp. 1-14.
Chadwick, E. (1859). Results of different principles of legislation and administration in Europe: of competition for the field, as compared with the competition within the field of service. Journal of the Royal Statistical Society. v. 22A, pp. 381-420.
Chapman, C.; Ward, S. (2002). Managing Project Risk and Uncertainty: a Constructively Simple Approach to Decision Making. Chichester: John Wiley & Sons.
Chong, E. (2006). Competitive Solutions for Managing Local Public Services: an Economic Analysis of Water Supply in France. PhD dissertation, Jean Monnet Faculty, Université De Paris XI – Paris Sud.
Cruz, N.; Marques, R. (2009). Viability of Municipal Companies in the Provision of Urban Infrastructure Services. Forthcomming in Local Government Studies.
Daube, D.; Vollrath, S.; Alfen, H. (2008). A comparison of Project Finance and the Forfeiting Model as financing forms for PPP projects in Germany. International Journal of Project Management, v. 26, n. 4, pp. 376-387.
Deloitte (2006). Closing the Infrastructure Gap - The Role of Public Private Partnerships. Deloitte Development LCC.
Demsetz, H. (1968). Why regulate utilities? Journal of Law and Economics. v. 11, n. 1, pp. 55-65.
Essig, M.; Batran, A. (2005). Public–private partnership: Development of long-term relationships in public procurement in Germany. Journal of Purchasing & Supply Management, v. 11, n. 5-6 , pp. 221–231.
Grimsey, D.; Lewis, M. (2005). Are public private partnerships value for money? Evaluating alternative approaches and comparing academic and practitioner views. Accounting Forum, v. 29, n. 4, pp. 345-378.
Guasch, J. (2004). Granting and Renegotiating Infrastructure Concession: Doing It Right. Washington DC, USA: The World Bank.
Ke, Y.; Wang, S.; Chan, A. (2010). Risk allocation in Public-Private Partnership infrastructure projects: a comparative study. Forthcoming in Journal of Infrastructure Systems.
Khadaroo, I. (2008). The actual evaluation of school PFI bids for value for money in the UK public sector. Critical Perspectives on Accounting, v. 19, n.8, pp. 1321–1345.
Li, B.; Akintoye, A.; Edwards, P.; Hardcastle, C. (2005a). Critical success factors for PPP/PFI projects in the UK construction industry. Construction Management and Economics, v. 23, n. 5, p. 459–471.
Li, B.; Akintoye, A.; Edwards, P.; Hardcastle, C. (2005b). The allocation of risk in PPP/PFI construction projects in the UK. International Journal of Project Management, v. 23, n. 1, p. 25–35.
Marques, R.; Berg, D. (2009a). Revisiting the strengths and limitations of regulatory contracts in infrastructure industries. Forthcoming in Journal of Infrastructure Systems.
Marques, R.; Berg, D. (2009b). Risks, Contracts and Private Sector Participation in Water Utilities. PURC Working paper n. 25, University of Florida.
Murphy, T. (2008). The case for public-private partnerships in infrastructure. Canadian Public Administration. v. 51, n. 1, pp. 99-126.
Ng, A.; Loosemore, M. (2007). Risk allocation in the private provision of public infrastructure. International Journal of Project Management, v. 25, n.1, pp. 66–76.
OECD (2009). Review of the Secondary School Modernisation Programme in Portugal. Paris: OECD Publishing.
Reeves, E. (2008). The practice of contracting in public private partnerships: transaction costs and relational contracting in the Irish schools sector. Public Administration, vl. 86, n. 3, pp. 969-986.
Reeves, E.; Ryan, J. (2007). Piloting public private partnerships: expensive lessons from Ireland's schools sector. Public Money and Management, v. 27, n. 5, pp. 331-337.
Soliño, A.; Santos, P. (2010). Transaction Costs in Transport Public–Private Partnerships: Comparing Procurement Procedures. Transport Reviews, v. 30, n. 3, pp 389-406.
Stern, J. (2000). Electricity and telecommunications regulatory institutions in small and developing countries. Utilities Policy, v. 9, n.3, pp. 131-157.
Stigler, G (1968). The Organization of Industry. Chicago: University of Chicago Press.
Tavares, L. (2008). A gestão das aquisições públicas: Guia de Aplicação do Código dos Contratos Públicos – Decreto-Lei 18/2008 – Empreitadas, Bens e Serviços. Lisbon: OPET – Observatório de Prospectiva da Engenharia e da Tecnologia.
Vining, A.; Boardman, A, (2008a). Public-private partnerships: Eight rules for Governments. Public Works Management & Policy, v. 13, n. 2, pp. 149-161.
Vining, A.; Boardman, A, (2008b). Public-private partnerships in Canada: Theory and evidence. Canadian Public Administration, v. 51, n. 1, pp. 9-44.
Williamson, O. (1985). The Economic Institutions of Capitalism: Firms, Markets and Relational Contracting. New York: The Free Press.
Yescombe, E. (2007). Public-Private Partnerships: Principles of Policy and Finance. London: Elsevier.
Yuan, J.; Skibniewski, M.; Li, Q.; Zheng, L. (2010). Performance Objectives Selection Model in Public-Private Partnership Projects Based on the Perspective of Stakeholders. Journal of Management in Engineering, v. 26, n. 2, pp. 89-104.