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Lecture Lecture 21 public public- -private private partnerships different different levels levels development development in in general in in particular particular 21: : Challenges Challenges in in managing partnerships (PPPs) in in general and managing (PPPs) at agricultural agricultural and extension extension at Centurion University of Technology and Management, Odisha, India
An agri-PPP or a PPP for agribusiness development is defined as a formalized partnership between public institutions and private partners designed to address sustainable agricultural development objectives, where the public benefits anticipated from the partnership are clearly defined, investment contributions and risks are shared, and active roles exist for all partners at various stages throughout the PPP project life cycle. Essential related concepts include the following: Public partners include national and decentralized government agencies, publically funded research and education institutions, State banks and State-owned enterprises (SOEs). International donors are also considered to be public partners. Centurion University of Technology and Management, Odisha, India
Private partners include agribusinesses, farmer associations, individual farmers and non- governmental organizations (NGOs). Public benefits are the expected (positive) outcomes from public-sector support to the partnership as defined by the goals and objectives outlined under national agricultural policy and strategy documents. Examples of public benefits include rural employment and income generation; food safety and food security; and environmental protection. Agribusiness enterprises are any firms or business entities that produce or provide inputs, produce raw materials and fresh products, process or manufacture food or other agricultural products, transport, store or trade agricultural production, or retail such products. In this study, family farms and micro- and small enterprises that operate in the informal sector are not included in the target set of agribusiness enterprises. Centurion University of Technology and Management, Odisha, India
Formal agreement is agreement for which consent alone is not enough, i.e. the agreement has to be embodied in a written document. Such agreement can range from project-level documents such as a memorandum of understanding (MOU), to formal contracts, equity arrangements and the establishment of new companies specifically for the purpose of the PPP. Typology of The PPP Cases partnerships that aim to develop agricultural value chains (VCD); partnerships for joint agricultural research, innovation and technology transfer (ITT); partnerships for building and upgrading market infrastructure (MI); and partnerships for the delivery of business development services to farmers and small enterprises (BDS) Centurion University of Technology and Management, Odisha, India
Infrastructure Contract Nomenclature Design-Build- Finance- Operate- Maintain (DBFOM); Design-Build- Finance- Operate (DBFO); Under this nomenclature, the range of PPP contract types is described by the functions transferred to the private sector. The maintain function may be left out of the description (so instead of DBFOM, a contract transferring all those functions may simply be described as DBFO, with responsibility for maintenance implied as part of operations). An alternative description along similar lines is Design-Construct- Manage-Finance (DCMF), which is equivalent to a DBFOM contract. New infrastructure As captured by contract name Can be either government or user pays Design- Construct- Manage- Finance (DCMF) Centurion University of Technology and Management, Odisha, India
Build-Operate- Transfer (BOT), Build- Own- Operate- Transfer (BOOT), Build- Transfer- Operate (BTO) This approach to describing PPPs for new assets captures legal ownership and control of the project assets. Under a BOT project, the private company owns the project assets until they are transferred at the end of the contract. BOOT is often used interchangeably with BOT, as Yescombe (Yescombe 2007) describes. In contrast, a Build- Transfer- Operate (BTO) contract, asset ownership is transferred once construction is complete. As Delmon (Delmon 2015, 20 21) describes, ownership rights mainly affect how handover of assets is managed at the end of the contract. New infrastructu re Typically, design, Can be either government or user pays build, finance, maintain, and some or all operations Under some definitions, BOT BTO may not include private finance, whereas BOOT always includes private finance or Centurion University of Technology and Management, Odisha, India
As above In either of the naming conventions described above, Rehabilitate may take the place of Build where the private party is responsible for rehabilitating, upgrading, or extending existing assets. Existing infrastructure As above, but rehabilit ate instead of build Rehabilitate- Operate- Transfer (ROT ) Concession Concession is used for a range of types of contract, as described in Delmon (Delmon 2010, Box 1 on page 9). In some jurisdictions, concession may imply a specific type of contract; while in others it is used more widely. In the PPP context, a concession is mostly used to describe a user-pays PPP. For example, in Brazil, the Concession Law applies only to user- pays contracts; a distinct PPP Law regulates contracts that require some payment from government. On the other hand, concession is sometimes used as a catch-all term to describe a wide range of PPP types for example, all recent PPPs in Chile have been implemented under the Concession Law, including fully government-pays contracts. New existing infrastructu re or Design, rehabilitate, extend or build, finance, maintain, and operate typically providing services to users Usually user pays in some countries, depending on the financial viability of the concession, the private party might pay a fee to government or might receive a subsidy Centurion University of Technology and Management, Odisha, India
Private Finance Initiative (PFI) The United Kingdom was one of the first countries to introduce the PPP concept under the term Private Finance Initiative, or PFI. It is typically used to describe a PPP as a way to finance, build and manage new infrastructure. New infrastructu re Design, build, finance, maintain may include some operations, but often not providing services directly users Government pays to Centurion University of Technology and Management, Odisha, India
Operations and Maintenance (O&M) O&M contracts for existing assets may come under the definition of PPP where these are performance-based, long-term, and involve significant private investment (sometimes also called maintenance contracts). Existing infrastructu re Operations and maintenance Government pays performance-based Affermage Existing An affermage contract is similar to a concession, but with the government typically remaining responsible for capital expenditures. Affermage in particular may have a specific meaning in some jurisdictions. The World Bank s explanatory notes on water regulation (Groom et al. 2006, 36 42) describe lease contracts, as well as concessions. Such contracts may or may not come under the definition of PPP, depending on the duration of the contract. Maintain and operate, providing services to users User pays private party typically remits part of user fees to government to cover capital expenditures Centurion University of Technology and Management, Odisha, India
Existing Management Contract The state retains asset ownership, and capital expenditure is the responsibility of the public sector, whereas operation and maintenance is the handled by the private sector. These types of contracts are 3-5 years in duration. Operations and maintenance Management fees extended to contractor the *Franchise User government pay or Franchise is sometimes used to describe an arrangement similar to either a concession or a lease or affermage contract, as Yescombe (Yescombe 2007). Existing or new May include design, build, finance, or may limited to maintaining and operating an asset described in and be Centurion University of Technology and Management, Odisha, India
