5. ANTECEDENTES INVESTIGATIVOS
5.2 A nivel nacional:
Silvana Ilic1, Dalibor Miletic2, Marija Stevanovic3
1 Faculty of Management, Zajecar, Megatrend University, Belgrade 2 Faculty of Management, Zajecar, Megatrend University, Belgrade
3 Thermal Power Plant Morava, Svilajnac
Abstract: Long-term practice of developed countries shows that partnerships between the public and private
sectors are an effective way to achieve the objectives of the public and private sectors. The interest of the public sector is that, as a partner who defines the type and scope of work or services, to transfer the business of services to the private sector, and the interest of the private sector as a partner is earning profits, with a commitment of quality fulfillment of contractual obligations. Various forms of cooperation are used within which the public and private sector pool resources and capabilities in order to facilitate their effective use.
Last year records showed a significant increase in cooperation between the public and private sector countries in transition such as Serbia. The PPP project is aimed at developing infrastructure and infrastructure management, public utilities, health care, environmental protection.
Keywords: public - private partnership, sustainable development, transition countries. 1. INTRODUCTION
The need for public-private partnership was gradually developed since the beginning of the 80s of XX century, when serious criticism appeared on the inefficiency of public service providers and their inability to respond to identified needs. The role and importance of public-private partnerships as an effective way for a more rational use of limited resources and potential for development was growing. Peteri (2010) point out that "a partnership between the public and private sector are used to promote the business of stakeholders from different sectors in all countries" (p. 8).
Public-private partnership is based on the concept of risk sharing. There are a number of factors that influence the success of management of joint public - private projects. Large and technically complex infrastructure projects, with complex funding scheme, depend to a large extent on external factors. Peteri (2010) point out that "this is especially true in situations where the demand for these services is influenced by political decisions on the justification, the price to be paid for the service and the level and form of social subventions (p. 10).
The possibility of failure due to any of these factors is just one of the risks of success with public-private partnerships. There are other, internal risks, which are influenced by internal factors, such as the construction, management and technology. There is no single agreed definition on the concept of public- private partnerships. In practice, there are various definitions relating to the substance of public-private partnerships.
In a broader sense, the public-private partnership is defined as the implementation of all known types of cooperation between public and private partners, which, in many cases, leads to the establishment of joint ventures. Vladkov and Markov (2010) point out that "European Commission guidelines for successful public- private partners, define a public-private partnership as a partnership between the public and private sectors for the purpose of delivering a project or service traditionally provided by the public sector” (p. 22). Through this partnership, the strengths of each of the two sectors (public and private) are complemented in the provision of services or construction of facilities for the benefit of specific communities. Since each of the sectors is doing what it is best in, the services and infrastructure are offered to society in the most effective way, in economic terms. Such partnerships are characterized by the division of investment, risk, responsibility and profit among partners institutionalized public-private partnerships include the establishment of a joint venture by the public and private partners. The joint venture has a task to perform community service or providing public services.
In Member States, entities of public authorities sometimes resort to these structures, especially in the area of public service delivery at the local level. Institutionalized public-private partnership may be established either
by establishing a joint venture by the actors of the public and private sectors or taking control of existing public company by a private sector entity.
2. EXPECTED BENEFITS FROM THE PUBLIC-PRIVATE PARTNERSHIPS
Public-private partnership is one of the possible forms of cooperation, and it’s based on recognition of the benefits that both the public and private sector achieve by pooling financial resources, knowledge and expertise to provide quality services to all citizens. For countries in transition this model is significant because it represents an alternative to full privatization. This partnership model provides a combination of social responsibility on the need to resolve a number of infrastructure problems and providing of quality services to citizens with finance, technology, efficient management and entrepreneurial spirit of the private sector.
Taking into account the advantages and disadvantages in providing public services, it is important to note that the most important role of public-private partnership to act as a new model of financing capital projects. The main argument for the establishment of public-private partnership is the ability to obtain benefits for service users and local authorities, as a result of participation of private partners in investments in infrastructure, public services and public service management. In some countries, such as, for example, Hungary and Serbia, where public institutions, because of the legal and administrative constraints, were less able to respond to the needs of private companies, state government hoped that the stakeholders from the private and NGO sector be able to provide more and better.
Aleksic (2009) point out that "public-private partnerships are necessary during the fiscal restrictions, when the pressure on the public sector to reduce the number of employees and the total cost is extremely powerful. In some forms of public-private partnerships, public sector employees are employed by the private partner or licensee, thereby reducing the number of employees in the public sector. Public-private partnership aims to attract more resources into the public sector" (p.74).
The form of public-private partnership allows the public sector better access to modern equipment and management techniques. It is expected that the public-private partnership are going to improve the economy, because the existence of contractual obligations means that projects are completed on time and that their costs are rarely grow during implementation. The role and importance of public-private partnership is different and depends on the achieved level of social and economic development as well as the experiences, both positive and negative, in their implementation. The research practice shows significant benefits of public-private partnerships, as well as the problems that arise in their implementation.
Bogdanov (2010) point out that "the contribution experiences of public-private partnerships are relatively modest in countries in transition as the cooperation of the public to the private sector is still new and still have enough relevant empirical data to confirm the feasibility of cooperation. It can be concluded, based on the stages of development of public-private partnerships in developed market economies (U.S., UK, Denmark, Germany, etc...) that, in countries in transition, the cooperation between the public and private sectors are at the level of the first phase of development" (p. 221).
However, public-private partnerships must be used with great care. They are, without a doubt, more effective than the traditional means of public investment. Public-private partnerships can be used to exclude from the budget the investment and the need of the country to borrow. Yet on the other side of the state still bears most of the risk and potentially faces significant costs that could be borne by taxpayers. Each partnership is specific considering its form, duration of certain phases, the speed of the transition to the next phase, the intensity of cooperation and level of involvement. Because changes are permanent, it is necessary to continuously review the position of each actor. “Risk matrix” consisting of three different groups of risk: (http://www.easwmc.org/download/postconf/Hans%20Wiesmeth.pdf)
Table 1: Benefits and problems in the implementation of public-private partnerships
Use Problems
Stable economic and social development of certain
The cooperation of a number of different stakeholders contribute to positive changes and improvements in various areas of the economy and
society
Greater focus on the form and inadequate focus on the content of the cooperation within the
framework of public-private partnerships More efficient use of the limited resources of the
community and the company, risk sharing
Incorrect assessment of the potential benefits, the necessary resources and credibility of
partners in public-private partnership Creating new capabilities and competitive
advantages as a result of learning, acquiring and distribution of knowledge
Asymmetrical competence and power of stakeholders
Efficient implementation of strategies of all the
entities involved Abuse of political and economic power in the establishment of public-private partnerships The affirmation of the concept of social
responsibility of public and private sector
Institutional complexity of public-private partnerships and imprecisely defined partner
accountability Greater synergy effects and successful positioning
of all stakeholders Uncertainty in the design of new policies and strategies of public and private sector Stable public-private partnerships bring greater
flexibility of different subjects and groups, improving the image of certain locations (municipalities, cities, regions, countries) and
businesses subjects
Blocking of new ideas as a result of delegating decision-making to others and the increased
bureaucratization of decision-making Enhancing national, regional, local and business
competitiveness Issues in the evaluation and implementation of control strategies Source: Nenezić, Radulović, 2012, p. 67
Risks of construction consist of the following:
Who is responsible for planning investments?
Does the contract primarily specify the volume and quality of the services or the conditions relating to the characteristics of the property that is necessary for the provision of services (size, design and technical quality of the assets that will be used)?
Does the state or contractor of public-private partnerships bear the risks arising during the implementation of the investment (for example, the risk of increased costs, and risk of financing due to poor project/performance)? What sanctions can be applied by the client in the event of failure, delay or inadequate realization of the investment?
Availability risk involves the question of whether the entire risk is borne by the state or a private contractor: (http://www.easwmc.org/download/postconf/Hans%20Wiesmeth.pdf)
Who bears the risks that may occur during the operation (for example, the risk of downtime due to failures or natural disasters)?
What are the sanctions that apply if the contractor is temporarily unable to ensure the availability of resources in the quality which is specified in the contract?
Can it be possible that the state must contribute to finance property maintenance?
Which party is responsible for maintenance and insurance of the property?
What are the sanctions applied by the relevant ministries in the event of inadequate quality of service?
Who bears the risk of an increase in operating costs?
Demand risks include: (http://www.easwmc.org/download/postconf/Hans%20Wiesmeth.pdf)
Is the private partner entitled to compensation in the event that the demand is less than expected or the one specified in the contract?
Who bears the costs in case of a higher demand than expected or those specified in the contract?
Can the contractor use the created goods for providing services as part of their activities to third parties?
Most of the project risks are allocated to the private partner, while mainly risks that they are considered to be a sector with a greater possibility of influence and management are allocated on the public sector. The entire risk of construction and demand risk and availability risk is expected to bourn by the private partner.
Ilic an Pasic (2011) point out that "public-private partnership aims to attract more resources into the public sector. PPP helps public companies to comply with restrictions relating to the public debt. It is of great importance in the EU member states with regard to the fact that one of the criteria is that the public debt should not exceed 60% of GDP. Form of PPP allows the public sector better access to modern equipment and management techniques. It is expected that the PPP will improve the economy, because the existence of contractual obligations means that projects are completed on time and that their costs are rarely grow during implementation" (p. 507).
3. CONCLUSION
For the success of public-private partnership it is essential that the partnership is established and developed on strong and sound foundations. It should be borne in mind that each partnership, as well as public-private, can be successfully implemented only if the objectives of the key players are compatible. In the case of public-private partnership that would include an appropriate level of quality service at a reasonable cost and with reasonable levels of return on assets.
In order for PPP to be successful it needs to have the character of long-term and stable cooperation between the partners. We should also not ignore the very important fact that PPPs increases the efficiency of use of public funds, and with the introduction of competition, reduces the corruption that is in the interest of all citizens and society as a whole.
It can therefore be concluded that the PPP is the future of joint financing, construction and management of infrastructure facilities, especially in countries in transition, in which the quality of infrastructure is a bottleneck in overall economic development and every quality investment in infrastructure is motivating impulse for the dynamic development of economy as a whole.
REFERENCES
Aleksić, V., (2009). Organizacija preduzeća, Kragujevac: Ekonomski fakultet.
Ilić, S., Pašić, V. (2011). Perspektiva javno privatnog partnerstva u Srbiji, rad objavljen u SPIN '11 VIII Skup privrednika i naučnika: Operacioni menadžment u funkciji održivog ekonomskog rasta i razvoja Srbije 2011- 2020, Beograd: Fakultet organizacionih nauka, Centar za operacioni menadzment i Pivredna komora Srbije, str. 505-512.
Nenezić, D., Radulović, B. (2012). Analiza mogućnosti i modaliteta finansiranja i mera finansijske podrške javno-privatnog partnerstva u Srbiji, rad objavljen u Kvartalni monitoring br. 30, Beograd: FREN, str. 62-71.
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Vladkov, S., Markov, A. (2010). Javno-privatno partnerstvo u Bugarskoj: Marketizacija javnih usluga na opštinskom nivou, rad objavljen u Partnerstvo javnog i privatnog sektora: Dobra i loša iskustva u odabranim zemljama u tranziciji, Beograd: Palgo centar, str. 21-45.
Wiesmeth, H., (2008). Investment Opportunities in Waste Management through the Private Finance Initiative, http://www.easwmc.org/download/postconf/Hans%20Wiesmeth.pdf (15.04.2014.)