Knowledge Resource Group

Endearing Myths, Enduring Truths: Enabling Partnerships
< Evolving Partnerships Previous | Next Partnership Benefits >

Direct Partnership Costs and Benefits

The initial motivation for many large companies to enter into trisector partnerships is often negative – reacting to pressures from a range of external stakeholders. But in the course of implementation, the BPD focus projects are providing more evidence that trisector partnerships can and do generate direct business benefits, alongside enhanced development impact. In partnership with local NGOs, community institutions and the district authorities, the project sponsor for the Sarshatali coal mining project in West Bengal, India – ICML/CESC – has implemented a range of income restoration and trust-building measures in the area of mine impact. In addition, four government departments – health, welfare, agriculture, and infrastructure – are now active in the area, each sharing with ICML the cost of wider community development and collaborating voluntarily with local NGOs (ASHA and Suchetana) and village committees to ensure relevance to local need. These trisector partnership arrangements have reversed what a year ago were rising levels of local dissatisfaction with the mining project, have helped ICML gain the confidence to begin construction work, and are helping to secure sustainable benefits for the local population – independent of whether the project eventually proceeds. However, the partnership’s direct net financial benefits to date to CESC Limited have been estimated at U.S. $280,000, made up mainly of cost savings in achieving the following:

Information and knowledge acquisition
Trust-building measures and community development
Road construction

Aguas Argentinas has formed a variety of partnerships with city authorities, the regulator, local NGOs, and community groups to explore how best to deliver water and sanitation services more effectively to poor communities in Buenos Aires, Argentina. Although not quantified, there have been significant net business benefits. These include converting fraudulent users into customers in terms of reduced ‘leakage’, vandalism and other security issues.

Direct development benefits also accrue through partnership and can sit comfortably alongside the business benefit. In the case of Buenos Aires, the latest available figures (July 2000) indicate that water services have been extended to 1.2 million poor people and sewerage services to 0.3 million poor people in part as a result of the partnership approach. About 60 percent of these connections were funded by the operator’s regular expansion programme, while the balance have been funded through tax credit agreements and other innovative institutional arrangements underpinned by a combination of public and private funds, and by community contributions.

Direct Partnership Costs and Benefits

Endearing Myth

Partnership costs are so high as to make them unprofitable for the participating business units.

Enduring Truth

Focused partnerships often yield net benefits to those organisations directly participating, particularly over the medium and longer-term.

< Evolving Partnerships Previous | Next Partnership Benefits >
Page: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16