A Guidebook on Public-Private Partnership in Infrastructure
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CHAPTER 1
PUBLIC-PRIVATE PARTNERSHIPS IN INFRASTRUCTURE:
REVISITING THE BASICS
This chapter revisits the basics of public-private partnerships (PPP) in
infrastructure with a focus on:
• The characteristics that make PPPs different
from conventional public
sector projects;
• Models in public-private partnerships; and
• The basic structure of a PPP model.
The public officials, involved in PPP project
planning and development,
implementation and contract management, need to have clear understanding of
these basics.
A. THE CHARACTERISTICS THAT MAKE PPPs DIFFERENT
1. What is public-private partnership in infrastructure projects?
Governments in most developing countries face
the challenge to meet the
growing demand for new and better infrastructure services. As available funding from
the traditional sources and capacity in the public sector to implement many projects
at one time remain limited, governments have found that partnership
with the private
sector is an attractive alternative to increase and improve the supply of infrastructure
services.
The partners in a PPP, usually through a legally binding contract or some
other
mechanism, agree to share responsibilities related to implementation and/or
operation and management of an infrastructure project. This collaboration or
partnership is built on the expertise of each partner that meets clearly defined public
needs through the appropriate allocation of
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:
• Resources
• Risks
• Responsibilities,
and
• Rewards
It is important to emphasize here that a PPP is
not a solution option to an
infrastructure service problem but it is a viable project implementation mechanism for
a preferred solution option.
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Adapted from the definition of PPP provided by the Canadian Council for PPPs (see the Council’s PPP
definition at http://www.pppcouncil.ca/aboutPPP_definition.asp). Some other terms such as private sector
participation (PSP) and private participation in infrastructure (PPI) are also used. These terms may not
always have
the same meaning, however.
