Public-Private collaborations & partnerships: Levers of transition for our territories?
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Can territories work together with the private sector to ensure their sustainable and smart transition? With its 6th Smart Cities Practical Guide, the Smart City Institute proposes to address the issue of public-private collaborations and partnerships and to lift the veil on this complex issue.
While the Smart City concept implies developing a solid dynamic between all the stakeholders of a territory, it can be difficult to involve all these actors in the sustainable and smart transition of this territory.
While our second volume of Practical Handbooks focused on the involvement of citizens in the Smart City approach, this new opus aims to address the issue of collaboration and partnerships between the public and private sectors.
In the Smart City ecosystem, the role of the private sector is indeed crucial. It is within this sector that most of the expertise in advanced technologies, financing and business models is developed. Private operators therefore provide essential solutions to urban transition challenges and can help public authorities to realise their vision of sustainability. Moreover, collaborations and partnerships with this sector can sometimes help to address certain constraints (budgetary, expertise, etc.) encountered throughout the process of sustainable and smart transition.
Collaborations and partnerships: 2 words, 2 concepts
While one might think that the two words are used interchangeably, they are in fact two different concepts.
Collaboration exists when several parties pool their interests, assets and skills to promote broader interests for the benefit of the community.
Partnership, on the other hand, refers to an association between several parties on the basis of negotiation, with a common objective (or objectives), each on an equal footing, each with its own characteristics, who establish a contract that defines the terms of their commitment.
In this Handbook, partnership therefore refers to a more formalised form of collaboration. In other words, partnerships are positioned here as tangible relationships from a contractual point of view, whereas collaborations are a process aimed at finding the most appropriate solution to an issue or problem.
The objectives of this 6th Practical Handbook
This book aims to achieve a number of objectives:
- To demystify the concepts of collaboration and partnership between the public and private sectors;
- To provide a benchmark of knowledge about the different forms of collaboration and partnership possible, beyond a simple "buyer-seller" relationship;
- To introduce the Walloon, Belgian and European legislative context that regulates collaborations and partnerships between the public and private sectors;
- To inspire the actors of our territories thanks to international best practices.
However, this Handbook is not intended to advocate a single approach or to replace the advice of experts specialised in setting up public-private projects.
Public-Private Partnerships (PPPs): a wealth of options
While there are an almost infinite number of forms for public-private collaboration, partnerships - while always unique - can be simplistically classified into two broad categories: contractual PPPs and institutional PPPs.
While the latter involve the creation of a company to which the tasks of the PPP will be entrusted, the former are, more conventionally, based on a contract.
Contractual PPPs can be further subdivided as follows:
- Management and maintenance contracts: The private sector is paid by the public sector to operate and maintain an existing public asset or service on the basis of specific obligations. These contracts are usually of short duration (2-5 years).
- Operating concessions: The objective is very similar to management contracts except that some of the operational and cost risks are transferred to the private operator. These contracts are generally of medium duration (8-15 years).
- Works and operation concessions: the public sector grants the private sector specific rights for the construction or renovation and operation of public goods and services. More of the risk is transferred to the private sector. These contracts are usually long term (25-30 years).
Figure from the Smart City Practical Handbook #6
The importance of the legal basis and the context
Finally, as the public sector is subject to numerous legal frameworks, it is normal to observe that public-private partnerships and collaborations are no exception.
Moreover, in recent years, many publications have questioned the relevance of public procurement legislation in the context of Smart Cities. PPPs related to Smart City projects are generally based on classical PPP contractual models (public procurement and concession contracts), adding a technological element. However, this difference proves to be crucial as the pace of technological innovation contrasts with the nature of PPPs, which are generally based on medium and long-term contracts.
It was therefore impossible not to dedicate a chapter to this subject in this Practical Handbook. It aims nevertheless to clarify the context and the different legal frameworks to be taken into account, but does not remove the need for expert advice on the subject.
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(Re)discover the entire collection
Volume 1 (2017) - Your Smart City strategy in 15 key steps
Volume 2 (2018) - Citizens participation
Volume 3 (2019) - Data governance
Volume 4 (2020) - Tomorrow's mobility
Volume 5 (2021) - Monitoring and evaluation
Volume 6 (2022) - Public-Private collaborations and partnerships