Scholarly record

POSSIBILITIES OF PUBLIC AND PRIVATE SECTORSВ’ COOPERATION IN THE CONSTRUCTION AREA IN THE CZECH REPUBLIC

D. Linkeschova, G. Kocourkova, P. Dorusak

Abstract

Contradictions between the private and public sectors appear to be significant. The presented article maps the state and possibilities of cooperation of municipalities with private companies in the construction area. It deals mainly with the involvement of voluntary associations of municipalities operating in the South Moravian Region of the Czech Republic. These associations of municipalities are one of the possibilities of interregional cooperation, which allows provision of public services to the members of the association. Within the research project, working hypotheses were set up, empirical investigation into the current situation was carried out and the results were analysed. Conclusions and recommendations of this research aim at extending the space for the interests of both seemingly contradictory parties. The main concern of public sector is to satisfy the well-being of citizens, so it is not required to make profit. By contrast, private sector's main interest is to generate profit and thus keep the business running. However, if public sector can deliver added value, it will be beneficial for both parties. A private entity gains sufficient confidence from the public sector, and then has the advantage of winning additional procurement contracts. Private and public sectors can even participate in a joint public sector contract with common interests. In order to design such a contract, a limited liability company or joint stock company should be jointly established. Such form of cooperation is in detail defined in the contract and signed before the establishment of the company. In this case, neither stakeholder enters the risk and practically applies the ”win-win” principle. If both sides do not want to establish a company, a concession contract can also be used which can also link these two sectors in mutual cooperation [1]. The case study points to similar forms of cooperation and reveals both its main advantages and the shortcomings caused mainly by the lack of awareness of the representatives of both sectors.

Publication details

Back to publication list