Building and managing facilities for public services

Abstract

We model alternative institutional arrangements for building and managing facilities for provision of\ud public services, including the use of the Private Finance Initiative (PFI), by exploring the effects on\ud innovative investment activity by providers. The desirability of bundling the building and management\ud operations is analyzed, and it is considered whether it is optimal to allocate ownership to the public or the\ud private sector. We also examine how the case for PFI is affected by the (voluntary or automatic) transfer of\ud ownership from the private to the public sector when the contract expires. Asset specificity and servicedemand\ud risk play critical roles

Public-Private Partnerships as Collaborative Projects: Testing the Theory on Cases from EU and Russia

“…The same logic works in the cases below. Council) is on lease to the private partner for a peppercorn rent for the whole duration of the project, and will revert to the Council on expiry of the contract or earlier termination [3].…”

“…One of the issues, rather well studied in the literature, is whether some or all tasks within one, typically infrastructure, project should be delegated to a private partner (Bennett and Iossa, 2006;Martimort and Pouyet, 2008; Maskin and Tirole, 2008; Chen and Chiu, 2010). Such an "unbundling" view neglects contributions by the partners that cannot be defined as a part of the project, for example, improvements in efficiency due to knowledge spillovers through collaboration.…”

“…The Council and the Community Liaison Group established by the Private Partner, jointly hold meetings with local community to update on progress and address issues arising. Although identification of the construction site is usually on the private partner [5], in this case the site was suggested by the Council from the beginning (and accepted by all four bidders at the procurement stage) [3]. The latter reduces risk of proposal being rejected on the basis of suboptimal choice of site (translates in the reduced reservation utility in the model).…”

Public-Private Partnerships as Collaborative Projects: Testing the Theory on Cases from EU and Russia

“…One of the issues, rather well studied in the literature, is whether some or all tasks within one, typically infrastructure, project should be delegated to a private partner (Bennett and Iossa, 2006;Martimort and Pouyet, 2008; Maskin and Tirole, 2008; Chen and Chiu, 2010). Such an "unbundling" view neglects contributions by the partners that cannot be defined as a part of the project, for example, improvements in efficiency due to knowledge spillovers through collaboration.…”

Assigning Tasks in Public Infrastructure Projects: Specialized Private Agents or Public Private Partnerships?

“…It is shown that bundling is preferable if the quality of the service can be well specified (and therefore contracted upon) while the quality in the building stage is less easily observable. Bennett and Iossa (2006) also analyze the choice between traditional service provision (unbundling) and PPP (bundling). However, they differ from Hart (2003) by considering different ownership structures and by assuming that there is only one kind of investment in the building stage.…”