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Funding PPPs
Methods of funding PPPs include “shared revenue” and “shared cost savings.” Shared revenue, as the name implies, assumes that a service will generate revenue that can be shared between the government sponsor of the project and the private sector partner. In the traditional PPP context of physical infrastructure projects, the shared revenue is often in the form of utility fees, such as water or electrical rates. In the e-Government context, the shared revenue may be filing fees, licensing fees, or application fees traditionally collected by governments, or, in the case of online tax collection, the tax payments. In shared costs savings PPPs, costs savings often come in the form of reduced government workforce: assuming the private partner can perform a certain task more efficiently, with fewer employees, the savings are split between the government and the private partner.
TexasOnline is one successful example of a public-private partnership that uses a performance-based model to share the costs and benefits of providing enhanced public services. Launched in 1999 as the state’s official e-Government site for state and local government, TexasOnline is a public-private partnership with BearingPoint (formerly KPMG). As of 2004, BearingPoint had invested $23 million in establishing the portal infrastructure. BearingPoint recovers its costs and earns a profit through a combination of user, subscription and premium service fees. The state receives a portion of the transaction fees generated by applications and filings processed online and BearingPoint keeps a share. According to the Austin Business Journal, by 2004, TexasOnline had generated $1 billion in revenue for the state and was processing one million transactions per month. Meanwhile, individuals and businesses enjoy the convenience and cost savings of being able to transact business with the state online. See Texas Comptroller of Public Accounts, Window on State Government, "Increase Usage of Online Government Services;" Austin Business Journal, "TexasOnline Passes $1B Mark."
TexasOnline is one successful example of a public-private partnership that uses a performance-based model to share the costs and benefits of providing enhanced public services. Launched in 1999 as the state’s official e-Government site for state and local government, TexasOnline is a public-private partnership with BearingPoint (formerly KPMG). As of 2004, BearingPoint had invested $23 million in establishing the portal infrastructure. BearingPoint recovers its costs and earns a profit through a combination of user, subscription and premium service fees. The state receives a portion of the transaction fees generated by applications and filings processed online and BearingPoint keeps a share. According to the Austin Business Journal, by 2004, TexasOnline had generated $1 billion in revenue for the state and was processing one million transactions per month. Meanwhile, individuals and businesses enjoy the convenience and cost savings of being able to transact business with the state online. See Texas Comptroller of Public Accounts, Window on State Government, "Increase Usage of Online Government Services;" Austin Business Journal, "TexasOnline Passes $1B Mark."
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