Public precurement and (ppt) + (ppp) Essay Example | Topics and Well Written Essays - 1750 words

Public precurement and (ppt) + (ppp) - Essay Example The public department just makes monthly repayments for capital utilized and bears the on-going service costs. The major objective of PFI is to increase efficient delivery of public services and transfer risk to the private enterprises. But currently, it has come under lot of controversy for excessive payments, bribery, corruption and poor value for money. The paper would analyse PFI for managerial effectiveness, operational efficiency and cost effectiveness for public service delivery and asses its viability for best value for money. Analysis Public sector is showing significant shift in its operational areas towards privatization regarding public procurements of works, goods and services with emphasis on cost saving and increasing efficiency. The concept had originated in the developed nations which were getting concerned with large amounts of spending from the public funds for public utility services. It had led to frequent cases of irregularities related to public funding includi ng lack of commitment, transparency and efficiency issues (OECD, 2007). The reforms therefore had become necessary. An effective public procurement through PFI was a good option especially when relationship is forged through fair and competitive auction –bidding (Audit commission, 2001). ... PFI is improved form of public procurement system because of its unique framework as public private partnership. Moreover, private finance is sought within the realms of a public environment, processed by a series of state defined legal, administrative, political, and management networks. Like private sector, it ensures that the procurement of goods, services and works is optimally efficient and effective, and results in best value for money (Deloitte, 2009). But it differs from the private sector in the sense that it is not profit oriented. Indeed, these emerge as vital issues that require constant monitoring, regulation, and audit to keep the process corruption free. In the traditional procurement system, the spending department or body finalizes the project and budget and thereafter sends proposal to the treasury for loan (Whitfield, 2001). After approval the department gets the long term loan at very low interest rates as they are perceived to be low risk borrowers with governmen t not expecting to fail or default in its repayments (Grout, 1997). The loan sanction for the project is a long drawn process that each public department has to follow for any proposed work in the public area. Apart from the highly fractious procedures of finance, the operation, management and risks are hugely critical elements that become difficult to manage in the long run with the same efficiency and quality (Hood et al., 2006). Indeed, the changing socio-economic and political environment makes the various projects quite risky. Most importantly, getting the state treasuries to fund the various public projects would a massive burden on it and which could