Economy, Business And Markets

A Case for Public-Private Partnership

A Case for Public-Private PartnershipA Case for Public-Private Partnership

When one lives in a city the size of modern day Tehran, it becomes quite apparent that many of the procedures you’d expect to be run by the local municipality are in fact conducted by small business people, most notably the trash collectors.

Daily there is in essence around 20 people pillaging through trash dumpsters – that’s in daylight hours – and a good number more after it goes dark. The simple point of this trash collection service(s) is that this is an unofficial public-private partnership (PPP), or one that is just run like a free-for-all trash collection. The point is, that this system, as organic as it has developed, actually does a service whether or not illegal in the long run.

Admittedly, these young men on scooters collecting bottles are quite likely to leave a trail of mess behind them and unfortunately not dispose of the trash in the appropriate manner. But in its most basic form these small business owners are lifting the pressure from the municipality.

PPP, as they have become commonly known in recent years, have begun to make an impact in European countries. Collaboration between public bodies, such as local authorities or central government, and private companies are the main stay of this business. In the late 1990s, Britain’s Tony Blair administration was all-for reducing the cost for local their local government department, and thus PPP was born.

In trying to bring the public and private sector together, the British government hoped that the management skills and financial acumen of the business community will create better value for taxpayers.

Many British public sector unions were incredibly skeptical – rightly so – and were particularly concerned about the extension of the private sector into new areas like schools and hospitals which traditionally were in the government’s domain.

Bringing this practice to Iran would cause shockwaves through a government system, which is firstly incredibly costly in their operations and secondly grossly underfunded. Thirdly, wasteful use of resources is another cause for concern.

Bringing in the private sector to say Iranian municipalities parking services could see the authorities gain huge sums of money. Understandably Tehran Municipality has attempted to automate this system in recent years, but without an authority to check the parking places hourly, daily and weekly, gross violations occur, which in turns means the authority loses out on net revenue.

Another proposal would be a system that would help the private sector enter the emergency services in the country. If an earthquake were to occur, the state’s response would by its nature be slow and lumbering, and the state is not responsible for insurance claims, thus many concerns would be neglected.

The United States in recent years began to research how the emergency services could work with PPP as part of its wider plan.  Idaho’s Homeland Security homepage highlights why they work with the private sector in the case of emergencies. They say that the local, state and federal public-private partnerships are vital to filling the first responder gaps in Emergency Management that neither sector can manage on their own.

 Widely Unknown

The defense page goes on to say that preparation between both private and public sectors allows for quicker response and recovery reducing the impact of disaster to their communities. It goes on to say when medium-large businesses are included in emergency planning for an area, the extra help can save lives, company assets and even the businesses.

The status of PPP in Iran is currently widely unknown outside the medical field. However, there are areas of breakout, where PPP can be seen in full swing.

In a Dec. 2012 review called “Prioritizing public-private partnership models for public hospitals in Iran on performance indicators,” by Tabriz University of Medical Sciences, Tabriz, its author Nikjoo Gholamzadeh among others noted that their study had been provided the most common PPP options in the field of public hospitals and had gathered suitable evidences from experts for choosing appropriate PPP option for public hospitals. They noted that whilst using PPP noted several improvements in the running of the hospital, including a higher hygiene level.

A 2011 conference and workshop on PPP in Iran hosted by Japan International Cooperation Agency noted that areas of investment included infrastructure projects, such as roads, highways, railways among the few highlighted at the conference. The Japanese for their part highlighted the success of using this method in their own country.

The point of this article though, is not to just point to obvious PPP projects such as medicine and engineering but to even consider areas such as education, where a private company takes over a failing school, and is also time bound to increase the students’ grades and prospects in the short case with private funding.

If the Iranian government and its municipalities want to change how they earn an income, increase their revenue and efficiency, and projects periods then PPP must be given a priority in these times of budget austerity.