End-user oriented Public-Private Partnerships in real estate industry/I galutini vartotoja orientuotos viesosios ir privasiosios partnerystes nekilnojamojo turto sektoriuje.

Features related to Customer selection were demonstrated in the Kaivomestari and Pyynikki projects. Extra cash flow from third-party services and innovations in third-party services were important requirements and desirable characteristics related to them, and given in tendering material. In Kaivomestari, the benefits of using a PPP, instead of a traditional model, were identified as third-party use of facilities outside school times, and extra cash flow created by special business ideas based on that use. In Pyynikki, the development of the whole block, located in the city centre, was an essential issue, and several examples of how to develop it were given in the information to tenders. The existing swimming hall could be developed into a city-spa, existing hostel cganged to a hotel, and other existing industrial and commercial buildings in the block could be developed as residential housing. Other Customer selection features in Kaivomestari, like increases of utilization rate, and possibilities to make free choices related to public services, were mainly used to specify desirable characteristics of the project. To sum up, Kaivomestari had many possibilities to develop third-party services based on Customer selection by expanding the diversity of core public services and use of the facilities, and Pyynikki, with the whole block under development, had great possibilities to create new services directly for the end-users.

The essential finding from the case studies was that the criteria used for decision-making considered only a small number of the possible features available in purchasing processes. All the requirements and desirable characteristics, related to Diversity and Customer selection, given in the pre-qualification stage and in two tendering stages were not applied to decision-making stage. The projects had requirements, desirable characteristics and criteria considering the end-users' perspective, but those were not used to evaluate the proposals. While customer-oriented development of public services and the needs of end-users are noted to be crucial points in innovative development of today's public services and welfare society (Yliherva, 2006; Brunila et al., 2003), the analysis pointed out a fundamental lack of end-users' perspectives in the evaluation processes, especially in the evaluation criteria used for decision-making. Evaluation processes used in these cases were mainly based on Life Cycle approach criteria, were not customer-oriented and would not be advisable from the point of public services' end-users.

7. BUILDING THE 4TH P INTO PPPS

Traditionally PPPs have been based on the purchaser-provider model, where the purchaser, a unit of the public body, and the provider, a private body, assumes homogeneity of the end-users of services. In Scandinavia, public service provision in the past has been closely connected to decommodification; in other words, equal service provision for all members of the community (Aronen, 2003; Esping-Andersen, 1990). When the focus of PPPs have been in the interface of public and private, the benefits of customer orientation have been partly wasted (Majamaa, 2004). If the end-users (people) are involved in the partnership, the focus can be turned to the interface with customers. The end-users are the customers of public authorities, via its duty to offer public services, and become the customers of the private service provider via combined public-private service production and private, direct service production. In customer-orientated thinking, today's post-modern world promotes individualism and the diverging needs of the members of the community (Bauman, 2001). The changing needs and lifestyles of individual consumers affect the formation of one's self-identity, which is strengthened through consuming (Bauman, 2002 and 2007). In accordance with this thinking, the community of end-users is actually a far more heterogeneous group of consumers with different needs (see Figure 1).

The purpose of the public sector is not to directly monitor psychological changes in consumers or to predict future needs, but to meet existing demand for services. It is, however, in the interests of the consumer community, that the public sector can take advantage of service provision models that allow service provision to be adjusted with optimal flexibility for changing demand (Majamaa 2004). The development of PPPs to an innovative and customer oriented Public-Private-People Partnership model is showed below, in Figure 2.

In the PPP model, the private service provider is operating through a public purchaser with a PPP contract. The public service provision is formally supplied to the end-users (people) by a public body. Even when a private service provider is responsible for the actual service contact with the end-users, feedback formally comes via the public body. The crucial finding is that the focus was on the PPP contract between public purchaser and private provider. Service provision was based on the PPP contract and had no customer-imput from the end-users. This kind of service production can be cost-effective, but it is not customer-oriented. The customer-oriented 4P model is a more optimal model for flexible service provision and changes in demand. In the 4P model, the focus is on the interface between the end-users (people) and the service providers, both public and private. The formal service provision is based on a PPP contract and core public services, but a private service provider is also able to develop other services by expanding the service provision to correspond to the demand of end-users. In the 4P model, the private provider is also able to create third-party services based on Customer selection directly with the end-users. Customers' needs are recognised by two separate channels: formally via political decision-making and municipalities' local democracy; and informally in daily contact with the end-users and by Customer selection in third-party services. For example, in the Kaivomestari case, where the core service was education, private service providers are producing the educational, environmental, and support-services related to it. The public body as contracting party and party responsible for the purchasing process is not considered as the only customer in the process as the teachers and the pupils of the school are even more important customers to the service provider. The sport activities in Kaivomestari included services based on the PPP contract, like a swimming pool and gymnasium. In Kaivomestari, the extra cash flow to the private service provider from the third party, the end-users directly, has been quite low. Because the decision-making was based mainly on Life Cycle approach and favoured a proposed design to satisfy the public purchaser's needs and not the use of facilities after the school times, the lay-out of the building limits the creation of services directly for the other end-users.

[FIGURE 1 OMITTED]

[FIGURE 2 OMITTED]

8. NEW SUGGESTED FRAMEWORK FOR 4P PROJECTS EVALUATION

Findings from the case studies point out that customer-orientated service provision should be considered in the early stages of project development. Then the perspective of the end-user could entirely be incorporated into the purchasing process. The project development stage is crucial because the main decisions related to investment and service provision occur during this stage, and over the concession period, changes are extremely limited (Dixon and Pottinger, 2006; Kaya, 2004). The property, which is usually the most expensive single element in the contract, gives physical limits to the service production to be conducted in it (Nisar, 2007). During the concession time, major changes are normally unacceptable because the investors like to secure steady cash flow, based on a tight contract (Dixon and Pottinger, 2006).

In some of the cases, like in Vantaan Point, Frami and Dynamicum, the scheme did not give much space to customer-oriented thinking and innovative service developments. One solution to get innovative proposals could be to keep the project, and the service provision flexible. However, in the studied cases, the construction processes and the buildings themselves were the main focus of the purchasing processes. As noted before, the evaluation criteria used for decision-making in all cases included only Life Cycle approach features, and in some cases, like in Vantaan Point, Frami and Dynamicum, almost only technical ones. This is conceivable, but led the focus from service production to property and maintenance issues. From the perspective of the end-users, the property issue is not linked only to the Life Cycle approach criteria. The Diversity of service provision and Customer selection also includes many features related to the property. Diversity and Customer selection both need the development of flexible spaces, in the beginning and during the concession period which has demands on the property.