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Dear Readers!
Family-run companies generate almost 50% of the German economy’s total turnover and provide over 50% of all jobs in our country. Our ‘Mittelstand’ (i.e. our SMEs) – which, we are constantly being told, is held in envy around the world – is the anchor that gives Europe’s largest national economy the stability it needs, driving growth across the whole of the continent. 83% of all apprenticeship jobs in Germany are created by SMEs. 1,307 of the globally identified 2,700 ‘Hidden Champions’ are German Mittelstand firms. So what have these facts got to do with public private partnerships?
They are an opportunity for local authorities and their companies to become a part of this exceptional success story. Family-owned businesses focus on values, traditions and reliability across generations. More often than not, they are deeply rooted in their regions and actively involved in their communities. And it is this that enables them to enjoy long-term success. We believe it to be a good decision when a municipal partner chooses to have its essential public services provided by a joint venture with a private-sector partner. Learning from mistakes made and drawing the right conclusions for the future are two further strengths of family-run companies that have been able to enjoy decades of success on their markets thanks to their high levels of expertise and their special ethos.
The need for greater efficiency by, on the one hand, dividing up tasks and specialising in specific areas and, on the other, keeping costs under control means that once again public private partnerships are being viewed as a future-proof business model.
For decades now, REMONDIS has been showing every day that better results can be achieved by working together. With 64 PPP companies and a whole range of third-party service provision agreements, we have perfected the public private partnership concept for all essential public services – from waste management, to water management, all the way through to public transport – to the benefit of both parties. Working together with its municipal partners, REMONDIS delivers services to over twelve million people living in Germany. Local authorities and their residents always receive the highest quality of service possible and have the peace of mind that their fees and charges will remain stable over a long period of time.
As a rule, public private partnerships are a real blessing for a council’s budget as they are a reliable source of tax revenue. The most can be made of the opportunities to optimise operations. Successful collaboration work with the private sector preserves public property and creates jobs. Fees and charges are stabilised and the pressure on the public purse is relieved.
This latest special issue is dedicated to the subject of public private partnerships and takes an in-depth look at the various PPP models, the advantages for local authorities and their residents and the positive impact they have on jobs, the environment and the local economy. Councils wishing to achieve long-term budget stability, high quality public services and maximum levels of sustainability by operating an environmentally responsible circular economy will find some valuable suggestions and accounts in this issue to help them with their decision-making processes.
We look forward to working with you!
Yours Ludger Rethmann
What’s what?
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PPPs, P3s, PFIs – there are a whole number of terms being used to describe cooperation agreements between the public and private sectors. And it’s no different in Germany where the most common abbreviations found are ÖPP, PPP and ÖPD. But what do these different abbreviations mean? How are they connected to one another? And what have they got to do with the provision of essential public services? All three combinations of letters in Germany – ÖPP, PPP and ÖPD – involve collaboration work between the public and private sectors. ‘Öffentlich-Private Partnerschaft’ (ÖPP) is the German equivalent of the English term ‘public private partnership’ (PPP). Both, therefore, are an umbrella term covering all forms of association or cooperation between public authorities and private businesses – i.e. from an operator model all the way through to a joint venture.
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The term ‘public private partnership’ (PPP) covers practically all types of collaboration between the public and private sectors.
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ÖPD – a special kind of PPP
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Germany also has the additional term ÖPD (Öffentlich-Private Daseinsvorsorge). This describes a specific type of PPP, namely cooperation models that cover tasks dealing with essential public assets and services. This primarily involves PPP projects set up as a service provision model, an operator model or as a public-private joint venture. If public private partnerships are formed to secure and guarantee the provision of essential public services, then they have three primary objectives:
Maximum levels of reliability & security of supply
The main criteria here are providing stability and minimising risks as well as scrupulously adhering to all public quality and performance parameters, such as pre-defined water qualities or prescribed internet transmission speeds.
Maximum levels of efficiency
A typical example here is ensuring that the prices charged are socially acceptable while also taking business requirements into account.
Maximum levels of technology and innovation
The most important factor here is making sure that essential public services are not only able to be provided now but in the future as well. This, therefore, covers issues such as sustainability, minimum resource consumption and aspiring to achieve the most environmentally sound business possible.
Provision of essential public services: Secure structures for the common good
The German word ‘Daseinsvorsorge’ not only involves ensuring that vital services and goods are provided but also that citizens have universal and non-discriminatory access to them. It covers the fundamental requirements of the population and all corresponding qualitative and quantitative standards. These essential public services are very wide ranging indeed – from tasks in the areas of culture, education and emergency services all the way through to transport, public safety and water supply.
The state is the body that is responsible for organising essential public services and ensuring they are provided but not for actually delivering them.
It is the government that is responsible for ensuring that these public services are provided and that the infrastructure needed to do this is set up and maintained. The government’s competence here though should only be seen as a responsibility. It does not mean that the state itself must provide the services. In Germany, the responsibility of making sure essential public services are delivered to citizens is often passed on to local authorities.
Essential public services are needed in:
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- Wastewater treatment / water supply
- Education
- Fire and emergency services
- Energy supply
- Waste management / recycling
- Graveyards / crematoria
- Supply of money / loans
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- Health care
- Culture
- Public safety
- Postal services
- Street cleaning
- Telecommunications / internet
- Traffic & transport
- Housing