Public Private Partnership (PPP)

The Public Private Partnership (PPP) model allocates tasks, obligations and risks among public and private partners in the most optimal way.

Who the partners are

• Public partners: government entities — ministries, government departments, municipalities or state-owned enterprises.
• Private partners: local or foreign (international) businesses or investors with technical or financial expertise relevant to the project.
• PPP also includes NGOs and/or community-based organisations — the stakeholders directly affected by the project.

Definition and roles

• PPP is a relationship between public and private entities in the context of infrastructure and other services.
• The public sector's role: ensures that social obligations are met and that sector reforms and public investment succeed. The government contributes capital for investment and the transfer of assets, along with social responsibility, environmental awareness and local knowledge.
• The private sector's role: uses its expertise in operations, task management and innovation to run the business efficiently.

Where PPP has been used worldwide

• Power generation and distribution, water and sanitation, refuse disposal, pipelines, hospitals, school buildings and teaching facilities, stadiums, air traffic control, prisons, railways, roads, billing and other information technology systems, and housing.

The PPP model at a glance

• Features:
  • A contract with the private party to design and build a public facility.
  • The facility is financed and owned by the public sector.
  • The key driver is the transfer of design and construction risk.
• Application:
  • Suited to capital projects with small operating requirements.
  • Suited to capital projects where the public sector wishes to retain operating responsibility.
• Strengths:
  • Transfer of design and construction risk. …