Copyright ⓒ 2011 Samsung SDS Co., Ltd. All rights reserved | Confidential Public Private Partnerships in Korea: A Private Sector Perspective from Samsung

1 e-Government Solutions Table of Contents 1. Objective and Benefits of Private Public Partnership 2. Models of PPP 3. PPP in e-Government and Korean Case 4. Critical Success Factors of PPP

2 e-Government Solutions Benefits for Public Sector Objectives & Benefits of Public Private Partnership ▶ Public Private Partnership is any contract between public and private sector that share risks and returns of the projects ▶ Objectives of Public Private Partnership is to build Win-Win relationship that maximize efficiency of both government and private partner Increase of efficiency in Operation and Management Create new jobs in private sector Timely adaption of new technologies Focus more on government administration Sharing Risk Benefits for Private Sector Maintaining longer term relationship with government Creating new business opportunities that may generate long term profit Enrich capability in implementation, operation and management Sharing Risk

3 e-Government Solutions Models of Public Private Partnership Management Contract Management control and authority are transferred to private sectors Asset ownership and commercial risk remains with the government Government can save time and focus its core services Low risk and low return for private partners

4 e-Government Solutions Models of Public Private Partnership Build Operate Transfer (BOT) A private developer is financing, building, and operating facility for a specified period. Afterwards the facility is returned to the Government. The government will typically pay the BOT partner at a price calculated over the life of the contract to cover its construction and operating costs, and provide a reasonable return.

5 e-Government Solutions Models of Public Private Partnership Variations to BOT Build Transfer Operate It is similar to BOT, but private partner has to transfer ownership first. Construction of Bridges, Highways, Railroads where usage charge can be collected easily. Build Own Operate After contract period 15 to 20 years, private partner may extend the contract or sell the property. BOO contracts are common in the businesses with higher risks. Build & Lease Government operate and only pay the lease payment.

6 e-Government Solutions Public Private Partnership in e-Government Possible Models of PPP in e-Government Management contracts are the most common model since it is hard to make profit out of operating the systems. e- Government services are provided at free of charge in most countries BOT or variation model could be applicable to e-Procurement, e-Customs, e-passport. Private partners could make profit by charging transaction fees to users with minimum revenue guarantee from the Government.

7 e-Government Solutions Public Private Partnership in e-Government Korean Cases Management contract or outsourcing contract are the most common models Share of Intellectual Properties with the Private Partners who developed the systems Private sector has to develop chargeable services that citizens are willing to pay Very active in transportation areas rather than e-Government

8 e-Government Solutions Critical Success Factors of Public Private Partnership Critical Success Factors with Private Sector Perspective Stable Government Comprehensive Planning with Feasibility Study (Revenue and Costs Estimate) Solid Legal Framework Optimal Risk Transfer to Private Sector Proper Communication to Public by the Government