I.V. Zapatrina, Chairman of the Board of the Ukranian

Public-Private Partnership Development Support Center, Economics PhD

Public-Private Partnership and its role in the

increased efficiency of public governance system

European principles of public law and governance

differentiation of regulatory and governing functions of the state;

creative competition; harmony of rights and responsibilities; social dialogue and partnership; equal attraction of all interested subjects toward the

formation and implementation of personnel policy; implementation of modern concepts and technologies

governing the development of human potential.

The goal of administrative reform

“step-by-step creation of such a public governance system which guarantees the formation of Ukraine as a highly developed, legislative, civilized European government with a high standard of living, social stability, culture, and democracy, will allow Ukraine to become an influential factor in the world and Europe. Ukraine’s goal is also the formation of a government system, which will come closer to the needs and questions of the people, but its highest priority will be the service to the people, and national interests. This government system will be controlled by the people, transparent, built upon scientific principles.”

The Decree of the President of Ukraine dated 22.07.1998 No.810/98 in redaction dated 26.05.2006 «On measures related to introduction of the Concept of administrative reform in Ukraine»

Principles of public management system reform

The government purposefully minimizes its intervention in life security for its citizens and takes on only those services, which at this point in social development it has the capacity to guarantee and which cannot be found in the service market. It constantly wants deregulation, to hand over it’s functions to the self-regulated market and non-government organizations on the principles of: 1. determining the list of services needed by the citizens, as well as the criteria for evaluation of the efficiency of these services; 2. relations between consumers and suppliers of products and services are regulated by the market, aside from those situations, when it cannot adequately satisfy society’s needs; 3. management services have to be paid only when the citizen has a choice, to use this service or not use it; 4. management services have to be offered at the lower levels of executive power, which will ensure these services for the consumers.

The Decree of the President of Ukraine dated 22.07.1998 No.810/98 in redaction dated 26.05.2006 «On measures related to introduction of the Concept of administrative reform in Ukraine»

Expenses of an expanded government in Ukraine and countries of EU, %GDP

6,96,6 6,4

5,13,5

6,7 6,4

4,5

0

1

2

3

4

5

6

7

Statemanagement

Education Healthprotection

Economicactivity

Ukraine

EU

Data from the Institute of economy and forecasting of NAS of Ukraine

Main Functions of Public Authority

development of a strategic course concerning issues of internal and external policy of the state/ territorial development

development of drafts normative-legislative actsefficient management of public and city finance and

public/communal property as well as control of their use.

Provision of public services

Some characteristics of Ukraine’s regulatory system

simplicity of carrying a business – 142nd place from 183 countries in the world

efficiency of the tax system – 181st place from 183 countries in the world

fiscal load on businesses – level of GDP redistribution through the budget for 2009 – 42.4%

According to Program of economic reforms

Management of public/communal property

1.State enterprises- 500 out of 4000 of Ukraine’s enterprises, where 50%

or more belongs to the state, are currently in bankruptcy status

2. Communal enterprises- receivables in sector of housing and communal

services (heat supply, water supply, sanitation, city electric transport) has reached 12 million UAH

- technical condition of the branch (part of the networks of the water/heat supply system, and sanitation, which are in distressing conditions, is more than 30%)

According to program of economic reforms

Public Services

Services provided by the public sector, as well as the private sector, with the public power responsible for it and at the

expense of the public funds.

Public Services – services offered by the state authority, local governments, enterprises, institutions, organizations managed by them.

State services – services offered by the state authority (mainly the executive branch) and by state enterprises, institutions, organizations, as well as, by local authorities in accordance with the powers delegated by the state, at the expense of the state budget.

Municipal services – services offered by local authorities, as well as members of executive power and institutions, enterprises, and organizations, in accordance with the powers delegated by the local government, at the expense of the local budget.

Clarifications of the Ministry of Justice dated 18.12.2009 No.967-0-2-09-22

Medical support for 100,000 people

868

644

302 261

0100200300400500600700800900

Number of beds Number of doctors

Ukraine

EU

According to the Program of economic reforms

Characteristics of the nation’s health

1 1,15

2,5

1

3

1

0

0,5

1

1,5

2

2,5

3

Length of life Infant mortality Untimely death

Ukraine

EU

According to the Program of economic reforms

Share of public sector in GDP (%)

0

5

10

15

20

25

30

35

40

Ukraine Canada,England,

Italy

USA Poland

Info of the Institute of economy and forecasting of NAS of Ukraine

Development of Public-Private Centers in the world

PPP-1997

PPP-2007

Info of the Polish PPP center

Public-Private Partnership in Europe

Country/Sector Administrative

servicesDefense Health Prisons Education Sport

Austria Х   Х * * ХBelgium *   * * *  Check Republic * * * *   *Denmark   * * * Х  Estonia     *   Х  France Х Х Х Х Х ХGreece *   * * * *Spain Х   Х Х * *Netherlands Х * * * Х  Ireland Х   * * Х Х

North Ireland Х Х *   Х  Lithuania     *   * *Latvia *       Х  Germany Х Х Х Х Х ХPoland * * *   * *Portugal     Х *    Slovakia * * Х      Slovenia         * *Scotland Х   Х Х Х  Switzerland Х       Х  Hungary   * * Х Х ХGreat Britain Х Х Х Х Х ХItaly Х   Х Х Х

I.Herbst: speech on the III Astana’s Economic Forum, Kazakhstan, 1-2 July, 2010.

The differences between the public and private sectors

Private Business State/Local Government

The possibility of attracting highly-qualified specialists due to a flexible approach in determining salaries, bonus systems

Noncompetitive salaries, and consequently, not a high enough level of qualification

The maintenance and development of personnel potential, fluctuation of workers, institutional memory

High dependency upon the political situation, as a result, the loss of institutional memory

Flexibility and efficiency in approving decisions Excessive formalization and regulation, difficult and large procedures on decision-making

Optimal procurement in price and quality Corruption in carrying out procurement

Initiative, individual responsibility Fear of taking on responsibility, collective irresponsibility

Stimulating factors in achieving results (profit, capitalization – for owners, bonuses – for management)

Lack of stimulation in attaining results

Interest in long-term results Advantageously tactical and short-term tasks

competition

The potential of public-private partnership to provide public

services in Ukraine

• The state of public services provision in our country is negatively perceived by the population and businesses and requires improvement;

• The inclusion of the private sector in providing public services will not require vital changes in legislative regulation of the sphere of budget support and its increase.

• The transfer of a few public services to a private business will give us the opportunity to lighten the load of state workers from routine labor and will give them the chance to concentrate on solving strategic questions of development, the improvement of legislative regulation, and other similar tasks.The Law of Ukraine “On state-private partnership” does not

make provision for PPP in the performance of public services

Forms of interaction between the public and private sectors in the

sphere of public management

The transfer of functions in provision of public services to the private sector.

Joint implementation of socially important projects

Value for Money:

- Decrease of services cost while conserving the services quality

- Increase of services quality on a fixed cost of the services

Quality standards for servicesMonitoring the service quality (from the public

sphere and civil society)

competition

Elements of public-private partnership in the sphere of public

management in the Program of economic reform

•Transfer to procurement of state services from state health establishments on a contractual base;

•Development support for the private sector in medical services, provision of access to state financing on a competitive basis;

•Approval of the law on administrative services and securing, in it, principles of delegation of authority;

Weak points in the development of PPP: The lack of partner relations on the axis: “government – local self-

government - private business” The population’s distrust of the ‘private partner’ Weakly developed legislative regulation system in the PPP sphere, lack of

methodology and knowledge of preparation and realization of such projects;

Non-sufficient qualification and knowledge of public and business representative in the PPP sphere;

The lack of standards for service production and a developed system of monitoring quality;

TASKS:

CREATION OF INSTITUTIONS – CENTERS OF COMPETITION IN PPP’S SPHERE

DEVELOPMENT OF SCIENTIFIC, INSTITUTIONAL, METHODOLOGICAL SUPPORT OF PPP

IMPLEMENTATION OF PILOT PROJECTS

DEVELOPMENT OF INSTITUTIONAL CAPACITY OF THE PUBLIC AUTHORITY

Thank you for your attention

www.ukrppp.com