ASSESSMENTTASK THREE - MAJOR INDIVIDUAL ASSIGNMEALEX DANIEL SALOMAO DA CRUZ ROCHAID: 1796097LCM 703 PUBLIC / PRIVATE INTERFACE FORSUSTAINABLE INFRASTRUCTUREMBM 703 BUSINESS ISSUES IN PUBLICPROJECTSMR.TERRY LANDELLS24MAY 2013Table of ContentsExecutive Summary................................................................................................................................................ 4Introduction................................................................................................................................................................ 6Public Private Partnerships in the Health Sector............................................................... 8Health System in Brazil............................................................................................................................................. 8PPPs in Brazil................................................................................................................................................................. 8The Suburban Hospital in Salvador: Brazils first healthcare PPP................. 10Rationale....................................................................................................................................................................... 10Transaction.................................................................................................................................................................. 10Issues................................................................................................................................................................................ 11Framework to evaluate The Suburban Hospital PPP....................................................... 12Accountability and Transparency..................................................................................................................... 13Stakeholders Engagement..................................................................................................................................... 14Risk Sharing.................................................................................................................................................................. 15Costs and Quality...................................................................................................................................................... 15Equitable Access to quality health services for the poor people..................................................... 16Evaluating The Suburban Hospital in Salvador................................................................... 17Recommendations...................................................................................................................................................... 18Conclusion.................................................................................................................................................................... 20References................................................................................................................................................................... 21 Executive SummaryCurrently, many countries aroundthe world have formal programs of Public Private Partnership (PPP), which hasbeen used not only as alternative to fiscal restrictions, but also as a meansto improve the quality and efficiency of public services. Savas (2000) suggeststhat the rationale for embracing PPP arrangements includes both ideological andpragmatic perspectives. Ideological refers to the superior capacity of theprivate sector in providing better services, while pragmatic argues that these arrangementsare ways of borrowing expertise, funding, and innovation from the privatesector to address complex public policy problems.In fact, the success of various PPP projects in many countries,has been leading other nations to encourage PPP procurements for infrastructureprojects, instead of using traditional methods to achieve such benefits, beingtheir experience extremely favourable for new projects. However, due to the complexity of these new milieus, wherechallenges are constantly changing and becoming more complicated, continuousimprovements seem mandatory as a means to achieve the optimum balance betweendiverse interests of multi stakeholders and therefore guarantee viability andlong-term sustainability of PPP projects.In countries such as UK andAustralia for instance, where the programs are more consistent, there seemsincreasingly adoption of concepts into innovative initiatives, in which the newchallenges refer to the reduction of costs and deadlines in the biddingprocess, the standardization of contracts, the dissemination of good practices,and also the establishment of competencies in project management in the publicsector.In Brazil, theuse of PPPs is relatively a new phenomenon. Only in 2002, through the union of every segments of the Braziliansociety in collaborative governance alliances, the country took its first steptoward Public Private Partnership infrastructure projects in essential sectors of the economy. Since then,Brazil has developed various PPP infrastructure projects as an inevitablerequisite for its economic and social development.The purpose ofthis report is to analyse a PPP project in healthcare in Brazil, with specificreference to theHospital do Suburbio inSalvador, the state of Bahia, providing a framework to enable an effectiveevaluation of the project, identifying and analysing its strengths, weaknessesand areas of improvement. The frameworkto evaluate TheHospital do Suburbio PPPincludes: Accountabilityand Transparency EquitableAccess StakeholdersEngagement Costand Quality RiskSharingThe strengths ofthe PPP are:- Effectivemonitoring of services- HighqualityThe weaknessesof the PPP are:- Lowstaff commitment- Insufficientcommunity involvement- Inefficientassessment of political and social risksAreas ofimprovement are:- Incentives- GovernmentsupportIntroductionIt is more and moreevident that the success of implementing PPPprojects in many countries has been leading others nations to encourage PPPprocurements for infrastructure projects, instead of using traditional methods,as a means to promote economic and social development in diverse sectors of theeconomy; some sectors showing higher priorities (Sen1999).In health, the increasingly costs of delivering services hasbeen a