Analysis of the PPP project in ensuring restrictive function of the state

This dissertation examines the possibility of private sector involvement in financing the Czech prison system. In the Western World, this form of provision has now become common practice. The paper explores the possibilities of both full and partial participation of the private sector in the provision of one of the restrictive services that in the Czech Republic are delivered exclusively by the state. The theoretical section discusses different alternatives regarding the financial provision through public-private partnerships (PPP projects). These are viewed as part of a wider and comprehensive area of public contracting. Due to the absence of this form of provision in the Czech Republic, all information regarding this alternative has been sourced from foreign prison systems where private forms of prison service have a long tradition (e.g. the concept of privatization by Charles Logan). The findings are then applied and compared with the foundations of the Czech prison system (whose primary role is security and specialist provision) with respect to the economic efficiency of the whole system. A case study is presented which outlines different projections regarding operating costs in a sample of three American prisons with the aim to compare the estimated and real costs depending on the form of provision, i.e. by state or through private management. The research section of the dissertation uses data from the Feasibility study of building a private prison in the Czech Republic. Using calculated values, CBA analysis is employed to evaluate three possible alternatives of financing the construction of a private prison. To evaluate the costs, the following methods were used: the Public Sector Comparator, the DBFO model (Design -- Build -- Finance -- Organize) and the BOT model (Build -- Organize -- Transfer) which primarily utilizes the work potential of prisoners in relation to the increase of return on investment in penitentiary provision. The results of the BOT model showed that the mere existence of participation of a private partner in the Czech prison system can be beneficial as it introduces an important element of competition and basic principles of market economy into the system. However, greater efficiency can only be achieved provided that a more efficient system of settlement of outstanding debts of prisoners is employed. This requires a more sophisticated policy for employing prisoners.