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Weekly UpdatesThe category of "Economic features" is based to the VFM criteria. In its first stage, the Life Cycle approach, VFM is related to core public services and property investment. In the next stages, Diversity and Customer selection, the key issue is the added value for both public core services and private third-party services. The measurement can be done, for example, by calculating the savings from effective and innovative private service production in core services and extra cash flow from third party services. In the studied cases, quality and technical features of property investment were related closely to the Life Cycle approach. In the customer-orientated evaluation process more weight is added to the flexibility and usability of the spaces, which is essential to service development and innovations in public core services and in third-party services (Shen et al., 2006).
The next category "Public and private service features", is related to the service delivery, and design and maintenance of property. A very important feature in this category is the innovative capacity to develop both public and private services during the concession period. If the private body does not have an opportunity, and if the public body does not insist on the development in services, the conditions for innovative development do not exist. In these cases, like in all the studied projects, the concession period is looked to be stable, and does not encourage any progressive development in services. The public sector concentrates on core public services, as stated in the PPP contract, and the private sector is only looking for ways to provide required services with minimum cost. From the end-users' point of view, the optimal situation would be when the private sector could actively develop third-party services and core public services would also get the benefits of this development. In the case studies, the Kaivomestari and Pyynikki projects were looking for this kind of development, but still the decisions at the final evaluation stage were made only in relation to stable core service production.
In the third category "Risk sharing and management features", customer-oriented evaluation processes includes risks and their management from not only related to the investment and core service production, but also from the Diversity and Customer selection approach. Networked service production and third party-services add new type of risks to the service delivery and should therefore be considered separately from Life Cycle related risk in Diversity and Customer selection stages.
In the customer-orientated evaluation process, features are linked to each other and all of these corroborate with the main principles of PPPs to increase public services' diversity and quality, and at the same time use the taxpayer's money more effectively. The Diversity and Customer selection features have a positive impact on several essential elements of evaluation and decision making, like: utilization rate; cash flow; residual value; quality of service; innovativeness; and risk management. Third-party services, based on Customer selection, have a positive impact on the utilization rate and the cash flow. When the operator is using same the facilities to direct services to the third-party, in an open market situation, the updating processes of facilities and service development related to it, is not only motivated from the contract term to avoid sanctions, but also becomes crucial to the operator to be able to tempt third-party customers. This kind of development needs innovations and can be seen as a guarantee for quality services and improvements also in core public services during the concession period. Diverse service provision needs flexible and maintained property and therefore increases the residual value of the property. All these features are affecting the risk sharing and risk management elements of the project. Dynamic and positive relationships between the public and private sector, working together to deliver good quality core services and creating new service provisions to the only real customers, the people, is the optimal solution to avoid risks and get benefits from the partnership.
9. CONCLUSION
The member states of the European Union (EU) are reforming their public services and discussing alternatives for producing future public services for their citizens. Public-Private Partnerships (PPPs) are considered as one solution for providing quality and cost effective public services.
Using the suggested framework, based on the theory of rational consumer and public material related to bidding processes, selected PPP cases were studied from the perspective of the end-user. The research aimed to study the requirements and desirable characteristics, given by public purchasers during the purchasing process, and whether those given features have been recognised in final evaluation stages and evaluation criteria used for decision making. The suggested framework found to be usable to analyse PPP projects.
The findings of this study were used to develop a new Public-Private-People Partnership (4P) model, where the end-users' role is clearly visible. While customer-oriented development of public services and the needs of end-users have been noted to be crucial points in innovative development of today's public services and welfare society, 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 the studied cases, were mainly based on Life Cycle approach criteria and not customer-oriented and would not be advisable from the point of public services' end-users.
There was a lack of application of the evaluation criteria, and the missed potential of service development from the end-users' perspective, particularly in the final decision-making stage. As a practical application of this research, a more customer-orientated framework to evaluate PPP projects was developed. The new developed framework includes three criteria categories as evaluation stages: Life Cycle approach, Diversity, and Customer selection.
The results of this study can be useful to public sector purchasers and to private sector providers to understand the limitations of current PPP practices and to further develop their practices towards more customer-oriented service production. To the end-users' of public services, results of this study are valuable in understanding the possibilities and benefits of PPPs and 4Ps models in public service production.
Received 17 August 2007; accepted 23 November 2007
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