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Objectives and Benefits

Benefits of  implementing  PPP

 

• Taking more of the risks of a project, including cost and time to have their price, while providing better service make PPP projects cheaper than traditional public procurements for Varna Municipality and the taxpayers. PPP projects must demonstrate better value for the invested public money than traditional public procurements.

• Under normal circumstances most of the project risks are transferred to the private sector, which can better manage them. Since all the risks have their price, the public sector is able to transfer significant costs to the private sector. This conclusion is particularly valid for the transport sector.

• The private sector will provide better service to the users of public services,which performance is guaranteed by strict enforcement of the agreed penalty arrangements.

• The world practices and evaluation of projects implemented through PPP show significant improvement in the quality and condition of the public infrastructure.

 

Objectives underlying the implementation of PPP schemes

 

The main objective in implementing the scheme for PPP investment project is to achieve better efficiency in the public sector when this alternative is compared with traditional public procurement. This concept is known as "value for money" and means that investment should be realized at a lower price for the full project life.

Purpose of the PPP is not only to be an alternative for funding under a budgetary constraints, but also to combine the need for public sector infrastructure and expertise of the private sector to implement the innovation, business spirit and efficiency to ensure "value for money."

International experience shows that PPP schemes provide efficiency for taxpayers, while providing income for the private sector. The need to generate profit is putting pressure on private companies to comply with contractual commitments without exceeding the costs or being behind the schedule which is typical of many projects implemented through traditional public procurement.

"Value for money" can be achieved by the private sector when it is provided:

 

• More efficient projects with creative and innovative approach while resolving technical issues;

• The  investment expenses must not be exceeded;

• Adherence to the timetable;

• Optimization of the project cycle (integration of design, construction, financing and maintenance of a particular project).

 

PUBLICITY

 

Varna municipality should expand the existing public system of policy for PPP. The aim is media and the public to support the policy of implementation for investment projects through PPP schemes. This policy should be clearly presented together with the reasons for its application and benefits that will bring to taxpayers. The transparency and the understanding by the public will lead to successful implementation of PPP schemes in the municipality of Varna and other Bulgarian municipalities.