Project Consulting: Turning ideas in to reality

National e-Government initiative presents a never-before opportunity for government bodies and agencies to
embark on changing the way they work. They have been doing several things to align themselves with the
National e-Government initiative. Whether big or small, these initiatives have brought home the point that the
only way to move is to move forward and embrace e-Government whole-heartedly.
It has long been the case that most of these initiatives are hardware-centric and tended to flood the department
with gleaming gizmos, which, after the initial flush of novelty value, tended to degenerate into museum pieces.
But that was in the past.....increasingly we are seeing a churn in the thinking, and there is now a perceptible urge
to move beyond hardware and graduate to applications and software tools.
If strategy is the roadmap, Projects are the means to travel along the roadmap, and build visible and tangible
services on the way.
From conceptualizing a simple portal, to providing citizen services, from consolidating data across the country, to
implementing advanced business intelligence tools....there is a vast orchard of project ideas where ministries and
agencies can go and cherry-pick the ones that are most appropriate for them, in size, in context, in their evolution
and in their value-addition.
NISG is ideally positioned to provide key services in this space. Take a look at the following:
 Conceptualization and Ideation of e-Government initiatives
 Designing of appropriate Architectures in the four components of e-Government projects - Process,
People, Technology and Resources
 Supporting the client-departments/ ministries in selecting suitable partners for implementing e-
Government projects and programs
 Conducting evaluation and assessment of e-Government Projects
NISG offers its project consulting services spanning the full life cycle of a project spanning from ideating to rolling
out of the project. In the process, NISG uses CADS (Conceptualize-Architect-Design-Support) methodology to
complete the project in time with the desired level of quality.
Major activities undertaken during the process of project development are:
 Study of As-is Processes
 Defining To-be Processes
 Best Practices Survey from across the globe
 Stakeholder consultation
 Development of vision, mission and objectives
 Identification and prioritization of service
 Definition of service levels
 Building business models using PPP principles
 Defining Roles and Responsibilities of private partner and the department
 Develop a Proof of concept for the idea
 Evaluation and assessment of products
 Program Management
All these activities taken together in a step by step mode leads to development of a comprehensive document
called "Request for Proposal", which forms the basis of selection of private partner.
Public–private partnership (PPP) describes a government service or private business venture which is funded and
operated through a partnership of government and one or more private sectorcompanies. These schemes are
sometimes referred to as PPP, P3 or P3.
PPP involves a contract between a public-sector authority and a private party, in which the private party provides
a public service or project and assumes substantial financial, technical and operational risk in the project. In some
types of PPP, the cost of using the service is borne exclusively by the users of the service and not by the taxpayer.
In other types (notably the private finance initiative), capital investment is made by the private sector on the
strength of a contract with government to provide agreed services and the cost of providing the service is borne
wholly or in part by the government. Government contributions to a PPP may also be in kind (notably the transfer
of existing assets). In projects that are aimed at creating public goods like in the infrastructure sector, the
government may provide a capital subsidy in the form of a one-time grant, so as to make it more attractive to the
private investors. In some other cases, the government may support the project by providing revenue subsidies,
including tax breaks or by providing guaranteed annual revenues for a fixed period.
Typically, a private-sector consortium forms a special company called a "special purpose vehicle" (SPV) to
develop, build, maintain and operate the asset for the contracted period. In cases where the government has
invested in the project, it is typically (but not always) allotted an equity share in the SPV.[1] The consortium is
usually made up of a building contractor, a maintenance company and bank lender(s). It is the SPV that signs the
contract with the government and with subcontractors to build the facility and then maintain it. In
the infrastructure sector, complex arrangements and contracts that guarantee and secure the cash flows and
make PPP projects prime candidates for project financing. A typical PPP example would be a hospital building
financed and constructed by a private developer and then leased to the hospital authority. The private developer
then acts as landlord, providing housekeeping and other non-medical services while the hospital itself provides
medical services.
Contents
 [hide]
1 Origins
2 The importance of public–private
partnerships
3 Controversy
4 Health Public-Private Partnerships
o 4.1 Market Potential for Health
PPPs
5 Product development partnerships
o 5.1 International examples
6 Specific cases
7 See also
8 References
9 Further reading
10 External links
[edit]Origins
Pressure to change the standard model of public procurement arose initially from concerns about the level
of public debt, which grew rapidly during the macroeconomic dislocation of the 1970s and 1980s. Governments
sought to encourage private investment in infrastructure, initially on the basis of accounting fallacies arising from
the fact that public accounts did not distinguish between recurrent and capital expenditures.
The idea that private provision of infrastructure represented a way of providing infrastructure at no cost to the
public has now been generally abandoned; however, interest in alternatives to the standard model of public
procurement persisted. In particular, it has been argued that models involving an enhanced role for the private
sector, with a single private-sector organization taking responsibility for most aspects of service provisions for a
given project, could yield an improved allocation of risk, while maintaining public accountability for essential
aspects of service provision.
Initially, most public–private partnerships were negotiated individually, as one-off deals. In 1992, however,
the Conservative government of John Major in the United Kingdom introduced the private finance initiative (PFI),
[2]
 the first systematic programme aimed at encouraging public–private partnerships. The 1992 programme
focussed on reducing the Public Sector Borrowing Requirement, although, as already noted, the effect on public
accounts was largely illusory. The Labour government of Tony Blair, elected in 1997, persisted with the PFI but
sought to shift the emphasis to the achievement of "value for money," mainly through an appropriate allocation
of risk.
A number of Australian state governments have adopted systematic programmes based on the PFI. The first, and
the model for most others, is Partnerships Victoria.
Sample List of Corporations and Investors active in the financing, ownership and development of Public-Private
Partnerships around the world:
 Vinci, France
 Balfour Beatty, UK
 Cintra, Spain
 SNC Lavalin, Canada
 Carlyle Group, USA
 Alinda Capital Partners, USA
 OHL, Spain
 National Standard Finance, USA
 Meridiam Infrastructure/AECOM, France
 Siemens, Germany
 Beijing Construction Engineering Group, China
[edit]The importance of public–private partnerships
Over the past two decades more than 1400 PPP deals were signed in the European Union, which represent an
estimated capital value of approximately €260 billion. [3] Since the onset of the financial crisis last year, best
estimates suggest that the number of PPP deals closed has fallen 30 percent. These difficulties have placed
significant strains on governments that have come to rely on PPPs as an important means for the delivery of long-
term infrastructure assets and related services.[4] Moreover, this has occurred precisely at a time when
investments in public-sector infrastructure are seen as an important means of maintaining economic activity
during the crisis, as was highlighted in a European Commission communication on PPPs. [5] As a result of the
importance of PPPs to economic activity, in addition to the complexity of such transactions, the European PPP
Expertise Centre (EPEC) was established to support public-sector capacity to implement PPPs and share timely
solutions to problems common across Europe in PPPs.[6]
[edit]Controversy
A common problem with PPP projects is that private investors obtained a rate of return that was higher than the
government’s bond rate, even though most or all of the income risk associated with the project was borne by the
public sector.
It is certainly the case that government debt is cheaper than the debt provided to finance PFI projects, and
cheaper still than the overall cost of finance for PFI projects, i.e. the weighted average cost of capital (WACC). This
is of course to attempt to compare incompatible and incomplete economic circumstances. It ignores the position
of taxpayers who play the role of equity in this financing structure. Making a simple comparison, however,
between the government’s cost of debt and the private-sector WACC implies that the government can
sustainably fund projects at a cost of finance equal to its risk-free borrowing rate. This would be true only if
existing borrowing levels were below prudent limits. The constraints on public borrowing suggest, nevertheless,
that borrowing levels are not currently too low in most countries. These constraints exist because government
borrowing must ultimately be funded by the taxpayer.
A number of Australian studies of early initiatives to promote private investment in infrastructure concluded that,
in most cases, the schemes being proposed were inferior to the standard model of public procurement based on
competitively tendered construction of publicly owned assets (Economic Planning Advisory Commission (EPAC)
1995a,b; House of Representatives Standing Committee on Communications Transport and Microeconomic
Reform 1997; Harris 1996; Industry Commission 1996; Quiggin 1996).
One response to these negative findings was the development of formal procedures for the assessment of PPPs in
which the focus was on "value for money," rather than reductions in debt. The underlying framework was one in
which value for money was achieved by an appropriate allocation of risk. These assessment procedures were
incorporated in the private finance initiative and its Australian counterparts from the late 1990s onwards. [citation
needed]

In 2009, the New Zealand Treasury, in response to inquiries by the new National Party government, released a
report on PPP schemes that concluded that "there is little reliable empirical evidence about the costs and benefits
of PPPs" and that there "are other ways of obtaining private sector finance", as well as that "the advantages of
PPPs must be weighed against the contractual complexities and rigidities they entail". [7]
Nowadays, a new model is also being discussed, called the Public–Private Community Partnership (PPCP) model,
wherein both the government and private players work together for social welfare, eliminating the prime focus of
private players on profit. This model is being applied more in developing nations such as India. Success is being
achieved through this model too. it mainly helps to ramp up the development process as the focus is shifted
towards target achievement rather than profit achievement.
[edit]Health Public-Private Partnerships
A health services PPP can be described as a long-term contract (typically 15 to 30 years) between a public-sector
authority and one or more private sector companies operating as a legal entity. The government provides the
strength of its purchasing power, outlines goals for an optimal health system, and empowers private enterprise to
innovate, build, maintain and/or manage delivery of agreed-upon services over the term of the contract. The
private sector receives payment for its services and assumes substantial financial, technical and operational risk
while benefitting from the upside potential of shared cost savings.
The private entity is made up of any combination of participants who have a vested interested in working
together to provide core competencies in operations, technology, funding and technical expertise. The
opportunity for multi-sector market participants includes hospital providers and physician groups, technology
companies, pharmaceutical and medical device companies, private health insurers, facilities managers and
construction firms. Funding sources could include banks, private equity firms, philanthropists and pension fund
managers.
For more than two decades public-private partnerships have been used to finance health infrastructure. Now
governments are increasingly looking to the PPP-model to solve larger problems in healthcare delivery. There is
not a country in the world where healthcare is financed entirely by the government. While the provision of health
is widely recognized as the responsibility of government, private capital and expertise are increasingly viewed as
welcome sources to induce efficiency and innovation. As PPPs move from financing infrastructure to managing
care deliery, there is an opportunity to reduce overall cost of healthcare.
[edit]Market Potential for Health PPPs
The larger scope of Health PPPs to manage and finance care delivery and infrastructure means a much larger
potential market for private organizations. Spending on healthcare among the Organisation for Economic
Cooperation and Development (OECD) and BRIC nations of Brazil, Russia, India and China will grow by 51 percent
between 2010 and 2020, amounting to a cumulative total of more than $71 trillion [8]. Of this, $3.6 trillion is
projected to be spent on health infrastructure and $68.1 trillion will be spent on non-infrastructure health
spending cumulatively over the next decade. Annually, spending on health infrastructure among the OECD and
BRIC nations will increase to $397 billion by 2020, up from $263 billion in 2010. The larger market for health PPPs
will be in non-infrastructure spending, estimated to be more than $7.5 trillion annually, up from $5 trillion in
2010[9].
Health spending in the United States accounts for approximately half of all health spending among OECD nations,
but the biggest growth will be outside of the U.S. According to PwC projections, the countries that are expected
to have the highest health spending growth between 2010 and 2020 are China, where health spending is
expected to increase by 166 percent, and India, which will see a 140 percent increase. As health spending
increases it is putting pressure on governments and spurring them to look for private capital and expertise. [10].
[edit]Product development partnerships
Product development partnerships (PDPs) are a class of public–private partnerships that focus on pharmaceutical
product development for diseases of the developing world. These include preventive medicines such as vaccines
and microbicides, as well as treatments for otherwise neglected diseases. PDPs were first created in the 1990s to
unite the public sector's commitment to international public goods for health with industry's intellectual
property, expertise in product development, and marketing.
International PDPs work to accelerate research and development of pharmaceutical products for underserved
populations that are not profitable for private companies. They may also be involved in helping plan for access
and availability of the products they develop to those in need in their target populations. Publicly financed, with
intellectual property rights granted by pharmaceutical industry partners for specific markets, PDPs are able to
focus on their missions rather than concerns about recouping development costs through the profitability of the
products being developed.
These not-for-profit organizations bridge public- and private-sector interests, with a view toward resolving the
specific incentive and financial barriers to increased industry involvement in the development of safe and
effective pharmaceutical products.
[edit]International examples
International product development partnerships and public–private partnerships include:
 The Drugs for Neglected Diseases Initiative (DNDi) was founded in 2003 as a not-for-profit drug
development organization focused on developing novel treatments for patients suffering from neglected
diseases.
 Aeras Global TB Vaccine Foundation is a PDP dedicated to the development of effective tuberculosis (TB)
vaccine regimens that will prevent TB in all age groups and will be affordable, available and adopted
worldwide.
 FIND [1] is a Swiss-based non-profit organization established in 2003 to develop and roll out new and
affordable diagnostic tests and other tools for poverty-related diseases.
 The Global Alliance for Vaccines and Immunization is financed per 75% (750 Mio.US$) by the Bill and
Melinda Gates Foundation, which has a permanent seat on its supervisory board.
 The Global Fund to Fight AIDS, Tuberculosis & Malaria , a Geneva-based UN-connected organisation, was
established in 2002 to dramatically scale up global financing of interventions against the three pandemics.
 The International AIDS Vaccine Initiative (IAVI), a biomedical public–private product development
partnership (PDP), was established in 1996 to accelerate the development of a vaccine to prevent HIV
infection and AIDS. IAVI is financially supported by governments, multilateral organizations, and major
private-sector institutions and individuals.
 The International Partnership for Microbicides is a non-profit product development partnership (PDP),
founded in 2002, dedicated to the development and availability of safe, effective microbicides for use by
women in developing countries to prevent the sexual transmission of HIV. See also Microbicides for sexually
transmitted diseases.
 Medicines for Malaria Venture (MMV)  is a not-for-profit drug discovery, development and delivery
organization, established as a Swiss foundation in 1999, based in Geneva. MMV is supported by a number of
foundations, governments and other donors.
 The TB Alliance is financed by public agencies and private foundations, and partners with research
institutes and private pharmaceutical companies to develop faster-acting, novel treatments for tuberculosis
that are affordable and accessible to the developing world.
 A UN agency, the World Health Organization (WHO), is financed through the UN system by contributions
from member states. In recent years, WHO's work has involved more collaboration with NGOs and the
pharmaceutical industry, as well as with foundations such as the Bill and Melinda Gates Foundation and the
Rockefeller Foundation. Some of these collaborations may be considered global public–private partnerships
(GPPPs); half of the WHO budget is financed by private foundations.
 The United Nations Foundation & Vodafone Foundation Technology Partnership, a five-year, $30 million
commitment, leverages the power of mobile technology to support and strengthen humanitarian work
worldwide. Partners include the World Health Organization (WHO), DataDyne, the mHealth Alliance,
the World Food Program (WFP), Telecoms Sans Frontieres, and the UN Office for the Coordination of
Humanitarian Affairs (OCHA).
Similar public–private partnerships outside the realm of specific public-health goods include:
 Public–private partnerships for disaster management bring together the private sector for PPP models
with a tool box of partnership opportunities towards resilience and sustainability goals.
 The public–private partnership for improving teaching and learning in schools in Abu Dhabi, United Arab
Emirates.
[edit]Specific cases
While some PPP projects have proceeded smoothly, others have been highly controversial. Australian examples
include the Airport Link, the Cross City Tunnel[11], and the Sydney Harbour Tunnel, all in Sydney; the Southern
Cross Station redevelopment in Melbourne; and the Robina hospital in Queensland.
In Canada, public–private partnerships have become significant in both social and infrastructure development.
PPPs exist in a variety of forms in British Columbia, including the Canada Line rapid transitline,
the Abbotsford Hospital and Cancer Centre and run of river hydro-electric projects in Toba River.[12] In Quebec, a
number of notable PPPs include the McGill University Health Centre, the new western extension of Autoroute
30 and Université de Montréal's Hospital Research Center.
In the UK, two-thirds of the London Underground PPP was taken back into public control in July 2007 after only 4
and a half years at an estimated cost of £2 billion and the remaining one-third was taken back into public control
in May 2010 after 7 and a half years for a purchase price of £310m [13]. The Government had paid advisers £180m
for structuring, negotiating and implementing the PPP and had reimbursed £275m of bid costs to the winning
bidders[14]. The 30 year PPP contract for the refurbishment of the MOD Main Building in London was estimated to
give a saving of only £100,000 as compared to the £746.2m cost of public procurement [15]. The refinancing of
the Fazakerley Prison PFI contract following the completion of construction delivered an 81% gain to the private
sector operator[16]. The NATS PPP saw 51% of the UK's air traffic control service transferred to the private sector,
however following the decline in air traffic after the September 11 attacks, the Government and BAA Limited each
invested £65m in the private sector operator in 2003 [17].
In Newfoundland Robert Gillespie Reid contracted to operate the railways for 50 years from 1898, though
originally they were to become his property at the end of the period.
[edit]