PPPs please

Author: | Published: 1 Aug 2007

Public-private partnerships (PPPs) involve various forms of cooperation between public authorities and the world of business that aim to ensure the funding, construction, renovation, management or maintenance of infrastructure or to provide a public service. The variety of possible arrangements ranges from public procurement, where a contractor does not assume project risks, to privatization, where public assets or shares in a publicly owned company are sold to an investor together with all associated risks. Various PPP forms (from simple service and management contracts to concessions and build-operate-transfers (BOTs)) depend mostly on risk sharing between the partners, particularly which partner is responsible for investment and who bears the risk inherent in the exploitation.

In the last decade, PPPs have developed in various new sectors, beyond the traditional sectors of roads, power and water. PPPs enable private funding of public infrastructure and services, especially in the context of budget constraints both in...