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Financing, Operating Models, and Regulatory Frameworks
Table 5.1 Advantages and Risks of Public-Private Partnership Projects Advantages
Risks
For public authorities Financial relief or gain in efficiency More rapid realization of projects Optimized task fulfillment or relief Image enhancement For the private partner Opening of new markets Attractiveness of the public business partner Improvement in the chances of success Anticipation of yields
Selection of partner Long-term commitment Complexity Conflict of interest or political risks Long-term commitment and stability Long path to decision Pseudocompetition Diverging interests
Source: Lienhard 2006.
legal issues also exist (such as those related to laws governing competition, awarding of contracts, taxation, employment, and contracts). Hence, carefully structured contracts between the government and private enterprise are necessary (Lienhard 2006). Moreover, the responsible actors require a new culture— one of trust, mutual understanding, and learning from each other—that is aimed at a common public welfare-oriented goal, not simply an economic one. Special challenges exist in including private enterprises in fulfilling sovereign tasks. For NMHSs, weather warnings would be a sovereign task, unlikely to be viewed as appropriate for a PPP. But a PPP could be involved in how warnings are delivered. Thus, a PPP must be based on a win-win situation with the advantages and risks to all of the parties carefully weighed. PPPs are designed in various ways, which are influenced by political and cultural contexts. In Scandinavia and the United Kingdom, PPPs somewhat contradict the tradition of public good provision by the social democratic welfare state. But such is not the case in the United States, which historically has seen the private sector more closely involved in providing public goods (GAO 1999; Skelcher 2005). In Switzerland, the MeteoSwiss PPP example shows how NMHSs can work with private insurance companies (see box 5.10 technical insight). How do PPPs mesh with the possible operating models for NMHSs? Generally, all entities within models I to IV can cooperate under a PPP with a private actor (model V). Nevertheless, there may be external effects, such as the legislative or political framework,7 that may force or hinder establishing PPPs (Gawel 2011). A clearly defined legal environment is critical because it serves as a legal basis for the government entities to enter into a long-term partnership with private entities. That said, it may affect government entities of models I to IV to a larger extent than private entities. Government entities fundamentally depend on the legal authorization to be active in the PPP field, whereas private actors are free with respect to potential collaborations (ADB 2008; Gawel 2011). Entities in models I and III and their decisions regarding PPPs are more likely to be affected by the political framework, given that these entities are under direct political control or work at arm’s length from the government. In contrast, Weather and Climate Resilience • http://dx.doi.org/10.1596/978-1-4648-0026-9