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A public-private partnership is a contractual agreement formed between public and private sector partners, which allows more private sector participation than is traditional. Publicprivate partnership (PPP) describes a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. These schemes are sometimes referred to as PPP, P3 or P3.
A public-private partnership exists when public sector agencies (federal, state, or local) join with private sector entities (companies, foundations, academic institutions or citizens) and enter into a business relationship to attain a commonly shared goal that also achieves objectives of the individual partners.
Some of the commonly adopted forms of PPPs include management contracts, build-operatetransfer (BOT) and its variants, build-leasetransfer (BLT), design-build-operate-transfer (DBFOT), operate-maintain-transfer (OMT), etc.
Traditional funding sources are not keeping pace with infrastructure investment needs and the growing public demand for services.
In short, P3 is a tool that can help governments meet demands for the development of modern and efficient facilities, infrastructure and services while providing value for taxpayers.
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6. Operations
Infrastructure Health Education Water & Sanitation Inclusive Marketing Urban Services Utilities Welfare Services
PPP projects are an important vehicle for economic development, providing much needed market orientation, operational efficiency and resource additionality. PPPs play an increasing role in infrastructure development. 50% of financial resources are expected to come through private investments in PPPs during the XII Plan. This is an increased from the 36% in the XI Plan. PPPs also play an important role in social infrastructure
It concludes that the more complete transfer of risk that is possible under a PPP, results in better project evaluation and stronger incentives to innovate and minimize whole of life costs. But these advantages must be balanced against the large contract negotiation costs, the inflexibilities of a long-term contract and the reduced competitive pressures on performance after the contract has been entered into (compared with a situation where the contract is re-tendered periodically over the life of the infrastructure).