Objectives of Introducing Business Models in the Provision of Public Services

Objectives of introducing business models in the provision of public services:

* Provide better and improved services in the areas such as water supply management, water sanitation, solid waste management and electricity supply in the remote areas. * Improving the existing infrastructure * Providing affordable services to the masses * Providing timely services to the public to meet their demand

Public private sector in Pakistan will focus on the following sectors:

* Transport and logistics * Mass Urban Public Transport * Municipal Services * Small Scale Energy Projects

Pros:

* Both the parties become able to pool in large resources for long term investment that would not be possible to carry out individually. * Transfer of the risk to the private sector. * Ensures effective and efficient delivery o services * Able to finance various infrastructure projects like road, railways, hospitals and school while utilizing the financial capacity of the private sector. * PPP helps to provide better quality and services at lower prices * Faster implementation of projects * Shift to the whole life cycle cost management of the project and private sector ensures the quality and maintenance of the asset under use. * Mutual understanding of public sector objectives * Promoting Non-commercial relationship, * pose low risk to municipality * increases Transparency and accountability * more available choices * Low transaction costs: administrative costs around 2% of projects * Possibility of reinvesting 100% of available financial resources into the system * Long-term gain in capacity-building * local control over objectives, methods * Can involve local civil society, workforce * Partners which have benefitted from a PUP can become supporting partners to other cities

Cons

* General public have concerns about safety and asset performance because all the assets are controlled majorly by the private sector. * A poorly structured tender document, which may be a result of: · lack of prior analysis in respect of project feasibility and risk allocation; · lack of stakeholder consultation; · bureaucratic inexperience and lack of quality expert advisers · Bureaucratic corruption (which should only be possible if procurement procedures are deficient or extensive collusion exists); · political interference or corruption (which should only be possible if procurement procedures are deficient or extensive collusion exists); · A poorly developed bid evaluation methodology, which may be a result of: · lack of prior analysis in respect of project feasibility and risk allocation; · lack of stakeholder consultation; · bureaucratic inexperience coupled with a lack of quality expert advice; · Bureaucratic corruption (which should only be possible if procurement procedures are deficient or extensive collusion exists); · Political interference or corruption (which should only be possible if procurement procedures are deficient or extensive collusion exists); Poorly negotiated contractual arrangements, which may be a result of: ? Lack of commercial realism by the bureaucracy; ? Miscalculation of project risks by the private sector; ? Corruption or incompetence; ? Political interference; - Political ineptitude and/or interference, leading to a lack of commitment and eventual abandonment or restructuring to reabsorb into the public sector; - Civil protest, which may be a result of; ? Lack of stakeholder consultation when designing the project structure; ? Lack of appreciation of the political situation by bureaucrats when structuring the environmental/commercial/cost recovery aspects of the project. - Poor contract management/ongoing monitoring, usually caused by: ? Lack of experience within government; ? Lack of resources applied to contract management; ? Lack of formal structure within government to monitor PPP contracts. Water sanitation, sewage system and its proper drainage has been a big problem in Pakistan and in many developing countries since ages. The contaminated water causes various water borne diseases and million of people die each year fro the various curable diseases just because of the poor quality of drinking water. These diseases include viral hepatitis, typhoid, cholera, dysentery and many other. The greater sewage plan was not needed but pushed by bureaucratic involvement of federal and provincial government. The case under discussion is also about water sanitation and sewerage system in Karachi. Although the project is best known for its community base, it has from the outset described itself as ‘working with government' and expanding the model through ‘collaboration with state agencies”. About 370 gallons of untreated solid waste has been dumped into the Karachi sea water, as a result sea life is being polluted near sea shore. All the industrial and domestic sewage is being disposed off there. Although underground sewage line exist but due to lack of its extension with ever increasing urban development people are force to connect their sewage line to the natural water drains. Over 90% houses have connected themselves to the Government Sewage system illegally and over 82% have installed sewage pipes at their own expenses. In order to over come the sewage problem Government has started the Greater Karachi Sewage Plan that has been funded by Asian Development Bank. Under this plan, Karachi Water and Sewerage Board is in debt of about Rs. 42 billion which the Public of Karachi will ultimately have to pay. This plan has been questioned by OPP-RTI continuously since 1997 and has been proposed alternatives that are more cost effective. The Greater Karachi sewage plan was profoundly criticize because it fails to incorporate the sewage system that was previously installed by various NGOs and does not provide an integrated sewage plan that provides solution for over all sanitation of the Karachi.

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