Group A Mix of English speaking participants

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Group A Mix of English speaking participants

• PPP
• WHAT is it?
• WHEN do we need it?
• WHY do we need it?

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CACG

• A private company with a public mandate
• Operates on a long term concession to manage
  irrigation professionally
  
• Accounting principles, flexibility to operate
• Accountable to a board
• Government oversight and regulation through the
  terms of the contract
  
• Make decisions in consultation with the board
• Profit? not to make losses

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Murray Irrigation Company

• Farmer owned private company
• Working on professional lines
• Accountable to a board elected by farmers
• Government oversight

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The Main Principles

• BOT BTO (anglo-sacson law vs. latin law).
• Assets remain a public property.
• The one who manages the assets has an accounting
  arrangements.
  
• The concessionaire should show the value of the
  assets on their books.
  
• The day the contract ends, the assets revert back
  to the government.
  
• In a public assets, the value is not depreciated
  as investments are made constantly plouging in
  profits and subsidies.
  
• Essence of business of a private enterprise with
  a social mission
  

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The need to look beyond!

• Need for focusing on the irrigation sector
• Irrigation consumes 80 of the water need for
  improving efficiency to make water available for
  increasing demands
  
• Business as usual will not work!
• Diverse situations among and within countries
  (India, Pakistan, Mexico)
  
• Need to explore new options
• Professionalizing agencies, entering into new
  partnerships, empowering user organizations, new
  contractual arrangements
  
• Building capacities to explore options

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On Public-Private Partnerships

• The term Private highly emotive
• PPP is -- complex issue --- needs insights on how
  to go about it
  
• Site, country specific solutions, and there are
  no blueprints
  
• Need for focusing attention on the irrigation
  sector

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Where do we go

• Public Objective of Equity managed
  professionally.
  
• How to do the change needs to be examined in
  specific situations
  

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What is INPIMs role

• Create awareness and build capacities.
• Disseminate information
• Best practices

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We will put up all the presentations and
materials on the INPIM Website

• http//www.inpim.org

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(No Transcript)
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What is PPP?

• CACG Private company performing public mandate,
  Government is the major shareholder
  
• Separate different functions cost them, account
  for them
  
• Staff not civil servants, hire and fire policy
  in place
  
• Freedom to choose salaries and make decisions
• Culture not profit driven, but avoid losses

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• Who is investing in the company? Government has a
  vested interest and right?
  
• Is this is an equivalent of a parastatal in other
  countries?
  
• The objective of the CACG to have a significant
  role in rural development
  
• Even if the shadow of the state is always
  present, the actual decision maker is the board
  of directors

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• Process of decentralization transfer of assets
  development of the water sector through
  professional agencies, main objective of the
  professionals is to give salaries??
• Water is a public good and a private company
  should provide it in a professional and efficient
  manner
  
• BOT BTO (anglo-sacson law vs. latin law).
  Assets remain a public property. The one who
  manages the assets has an accounting
  arrangements. The concessionaire should show the
  value of the assets on their books. The day the
  contract ends, the assets revert back to the
  government. In a public assets, the value is not
  depreciated as investments are maid constantly
  from subsidies. Essence of business of a private
  enterprise with a social mission

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• Operational surplus income above and over
  salaries, energy cost, etc. is invested back
  into the renewal and maintenance, as opposed to
  traditional private company, where the profit is
  paid to shareholders in the form of dividend

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• When farmers participate is it PPP?
• Does it have to be a company to be called a PPP?
• What is the role of the Government in PPP?
• What is the motivation for the company to provide
  services?
  

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• PIM between state and farmer for better equity of
  water distribution. Privatization has been
  dominating the discussion not the intent of
  INPIM. Need to keep the concept simple. The case
  might not be applicable for most of the countries
  present here.
• Professionals built the system engineer
  oriented. Later infusion of other disciplines not
  worked successfully. Farmers left out paved the
  way for PIM. Farmers are being made central to
  governance issues. Where is the
  professionalization required? No need

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• PIM
• Public (equity)----------PPP (Professionalism
  with 3rd Party)-------- private (efficiency)
  
• Goods and services
• Assets
• Who will operate
• Who will finance
• Shifts take a long time
• Externalities public financing constraints
• Seeking private financing sources

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Conclusion

• Publicly owned, operated according to the
  business law
  
• Many hybrids
• Private companies almost always are brought for
  efficiency gains
  
• To reduce political interference ring-fencing
  through a mixed representation of public and
  private in the board of directors

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• Public objective of equity and development
  objectives
  
• Private objective of cost-effectiveness
• Are the farmers actually interested in the
  management??? In reality they are more interested
  in getting/having the service whenever they need
  it (on time and quantities required), regardless
  who provides is public or private sectors?
• Farmer empowerment
• Outsourcing in

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• Governance direct and indirect
• Operation and maintenance