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Delivering e-government services through PPPs: Lessons and examples

Elena PrekopovaBusiness Development Manager

0. OVERVIEW OF PPP

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1. What is PPP?

2. PPPs and E-Government services

3. Examples of E-government PPPs• Health• Trade

4. Summary

1. What is PPPs?

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1.1 WHAT IS A PPP?

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World Bank / IFC Definition of PPPs

• No one widely accepted definition of PPPs • PPP refers to arrangements between the public and private sectors whereby part of

the services or works that fall under the responsibilities of the public sector are provided by the private sector, with clear agreement on shared objectives for delivery of public infrastructure and/ or public services

• Typically excludes service or turnkey construction contracts, which are categorised as public procurement projects, or the privatisation of utilities where there is a limited on-going role of the public sector

1.2 WHAT IS AN ICT PPP?

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PPP as it relates to ICT contracts

1.3 KEY DIFFERENCE: INFRASTRUCTURE VS. ICT PPP

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Type of Service

Need For Single

Purpose Company

Third Party

Finance

Period of Service under

Contract

Payments Ownership

Infrastructure PPP

Typically Typically 20 - 35 years

Payment for services delivered

Ownership transfers to public sector at end of service delivery contract

ICT PPP Rarely Rarely 5 - 10 years

May agree upfront payments for hardware

Ownership of equipment may be with public sector from day one

2. PPPs and e-Government

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2.1 TYPES OF E-GOV SERVICES SUITABLE TO PPP

International examples include:Whole person recordsAdministrative systems (e.g. health, education)E-procurementTaxation (individuals & companies)Import / export and customsE-borders / immigrationPolice systems and records

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E-government is the use of ICT technology to improve and provide government services to the public. It includes the use of technology for both internal government systems and external public services.

These type of services can be delivered through PPPs.

2.2 VISION FOR E-GOVERNMENTS

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Aiming for ‘Whole Person Records’A government record for each person from ‘cradle to grave’, used across government.

Benefits:•Improve government planning•Easier collection of data and statistics•Help ensure the right services are provided to the right people, at the right time•Reduces opportunities for fraud, tax evasion etc

Important lessons for PPP design and implementation:•Must have common standards across government (local, state, federal)•Systems must be compatible•Implement using a phased approach with manageable chunks

Online servicesOnline

services

2.3 GOVERNMENT NEEDS TO DELIVER E-SERVICES

There are a wide range of ICT services needed by government to deliver e-services – all suitable for PPPs. Examples include:

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Government Needs to Deliver e-Services

Internal ICT service needs Citizenship External ICT service needs

Hardware Software

Communication infrastructure

General processing software

Natural person records / whole person records

Online client services e.g.•Online licencing•Online tax filing•Online health advice

Data storage Software for specific functions (e.g. health, education)Desktop services

Helpdesk

Different buying options exists, each with benefits and drawbacks. Choose between end-to-end vs. best of breed vs. buying ad hoc

2.4 PLANNING FOR ICT PPPS

Before PPPs can be undertaken to provide e-Gov services, governments need to ensure the following are in place:– Appropriate legislation allowing PPPs– Staff with the necessary PPP knowledge and technical, financial and legal skills

able to design, negotiate and manage PPPs– Clear understanding of funding requirements and payment models

When selecting PPP partners, government should consider carefully who they will partner with, and undertake the necessary due diligence

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Aspects to consider as part of due diligence on partners

Aspect Achievement1 Ethical approach By documentation, record and

agreement

2 Track record / sector knowledge of a similar service contract

Size by number of users, investment, duration

3 Business (financial / commercial aspects, ways of working)

References, site visits

4 Acceptable business continuity capability Documentation, site visits

2.5 KEY ISSUES TO CONSIDER

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1. Technical Issues • Ownership• Quality standards integration• Constraints on use

2. Commercial • Obligations IPR• Profits• Use of surpluses• Due diligence

3. Practical • Local capacity building v international exploitation• Exit strategies/retendering• Unsolicited tenders• Use of consultants / suppliers• Governance

4. Ethical / National Sensitivities

• Due diligence• Constraints on service providers e.g. use of local staff

5. Access • Communication infrastructure• Physical access• Ability e.g. data entry

Other issues to consider before embarking on ICT PPPs could include those set out in the table below:

2.6 FUNDING AND PAYMENT MODELS

PPPs are often attractive to government as it allows access to private sector or 3rd party financing. However, financing needs to be recouped by investors – which can be done in three ways.

When designing a PPP, its of the utmost importance to evaluate the impact of the particular financing model.

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Unitary Transaction charging Hybrid

Who pays? Paid by government Paid by service users Paid partly by government and partly by service user

Fixed fee or per pay use?

Regardless of number of users

For each transaction Fixed fee which varies based on the number of units

Example Lump sum paid by government for online service e.g. health online service / website

Trader paying a transaction fee for using online trade service e.g Single Window portal

Partly a set fee for the service paid by government, and partly a service charge paid by users for example of every car licence issued using an online service

Issues to consider

Can users afford it? Is it a barrier? E.g. payment for using e-procurement service can be a barrier to competitions

2.6 LESSONS FROM PPP FOR E-GOV SERVICES

E-services can successfully be delivered by government using PPPs. However, extensive and careful planning, design and negotiation is needed.

Some lessons from UK ICT PPPs are:– Ensure appropriate procurement rules are in place– Government must be an ‘intelligent customer’. A small, highly

knowledgeable group of in-house experts is needed to ensure government:• Is aware of the latest technologies available• Can draft appropriate standards, specifications, contracts etc• Can manage and monitor PPPs, incl ensuring vfm and high quality service

delivery

– Acknowledge services are being procured, not systems– Anticipate issues, and develop contingency plans and legal solutions in

advance e.g. what if the service provider goes bankrupt?

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2.6. SUCCESSFUL DELIVERY OF PPP: CRITICAL SUCCESS FACTORS

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A wide range of factors impacts on the success of ICT PPPs – some are listed below.

•Developing a workable solution which meets local needs– Requirement is practical and reflects local needs– Legal framework must be consistent with procurement and project needs– Commercial deal is affordable and fundable– Practical attitude to delivery requirement and risk sharing

•Stakeholder engagement is of the utmost importance– Commitment from politicians, civil servants and the private sector is needed– Public sector recognition of private sector drivers and exposure of risk– Private sector understanding of the needs of the public sector– Use of professionals with practical experience who understand the delivery

domain

•Procurement– Transparent approach– Realistic timeframe– Coordinated with all interested stakeholders – Use of experienced complex procurement consultants

3. Examples of PPPs in e-Gov

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3.1 EXAMPLE OF PPPS FOR E-SERVICES: HEALTH

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To meet Health e-Service requirements of Government X , a range of ICT services are required – all of which can be undertaken as PPPs

3.2 EXAMPLE OF PPPS FOR E-SERVICES: TRADE

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TechnologyTo deliver e-services aimed at supporting trade facilitation, technologies are needed such as:•Single Window software incl online licencing and payment•Online tax services•Online port community services •Scanners at borders

InfrastructureInfrastructure is also needed, such as:•One Stop Border Posts•Toll Roads/Bridges•Railways•Ports•Airports

Both technology and infrastructure can be delivered using PPPs. But benefits and drawbacks should be recognised and considered.

Benefits of using PPP Drawbacks of using PPP

Access to private / 3rd sector funding User charges can be a barrier to trade

Reduced travel times for freight Reduced government control

Reduced clearance times for traders

4. Summary

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CLOSING THOUGHTS

PPPs are becoming more and more important to deliver government services – incl back office technology solutions and e-services.

However, government needs to ensure:– Contextually relevant PPP solutions are developed– An appropriate operating environment is in place incl legal

framework, processes etc– In-house expertise are available to identify suitable

technologies, create appropriate specifications, and manage PPPs effectively

– Benefits and drawbacks are considered– All stakeholders are involved

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