A public–private partnership (PPP) is a government service or private business venture that is funded and operated through a partnership of government and one or more private sector companies. A […]
A public–private partnership (PPP) is a government service or private business venture that is funded and operated through a partnership of government and one or more private sector companies. A public agency enters into a contract with a private company or consortium to provide finance and arrange design, construction and on-going operation of a facility .‘On-going operation’ might involve provision of full services or it might only involve providing maintenance of the facility, with services to the public being provided by a government agency).At the end of the contract, control of the facility is usually returned to the government or a local authority.
Typically, a government agency will specify the services required. The job of producing detailed designs, finding the finance, organizing the construction and on-going management of the facility is let to a private consortium by way of a competitive tender. The private consortium is typically organized by a lead contractor who brings together financiers, engineering firms, construction companies and facilities management companies.
For a project to be a PPP, all of these elements need to be carried out by the private sector. If coordination and financing are carried out by a public sector agency but, all other elements are carried out by the private sector, then the arrangement can be called “conventional private sector procurement”.
PPPs are claimed to enable the public sector to harness the expertise and efficiencies that the private sector can bring to the delivery of certain facilities and services traditionally procured and delivered by the public sector.
A PPP is structured so that the public sector body seeking to make a capital investment does not incur any borrowing. Rather, the PPP borrowing is incurred by the private sector vehicle implementing the project.