How far can we go? … in public scrutiny of a PPP projects

Taxpayers, citizens or call them just simply public, they are the reason why PPPs are being done, they are the users, ultimate financiers, whether by paying taxes or tolls, and they want to have bigger role in decisions about what infrastructure shall be build and how. It is no surprise that public opinion is the ultimate judge of the success of PPP project.

And this ultimate judge is not always just; it does not always have proper information and certainty in public sector transparency and reporting. It is up to public sector officials to ensure proper information and reporting is available to public and proper stakeholder consultations take place prior key decision regarding the project. Interestingly a lot of government officials believe that the huge public interest in PPP projects is dangerous and they rather use traditional procurement under the legal procedures, which they know so well and build upon old customs, providing therefore safe haven for themselves. It is perhaps safe heaven, but development is about trying new things, it is about experimenting with innovations, new ways to achieve efficiencies and also about taking risks.

One of these risks is a cost of procurement of PPP projects. In my experience some of the costs that would be capital costs under the traditional public provision are transferred in to the procurement and advisory costs in developing PPP project. This is quite a risk for public officials, but it is risk well justified, by the quality of preparation and unprecedented learning process for both public and private sides to the PPP agreement. Partnerships of British Columbia in their recent Value for Money (VfM) report regarding Surrey Outpatient Hospital published that the costs of public sector procurement in PPP was 9.7$ compared to PSC 4.7$ (Public Sector Comparator is a measurement of public sector costs if the project would not be done as a PPP); therefore PPP procurement costs is about a double hit to public budget. And it is not just public officials who take this risk; private sector side is also making significant investment in developing proposals which can go as far as several percent of the project capital costs.

The above mentioned Surrey Hospital seems to deliver Value for Money (8.8% on overall costs) and not only number of reports have been published including Fairness Advisor Report, but also cameras have been installed directly on the construction site and webcam enables direct online supervision of the public of how the construction of their hospital is going on. Excellent idea, is it not?

See here the snapshot of the webcam