Private Public Partnership

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  • Topic: Public economics
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  • Published : March 10, 2013
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Private-Public Partnership
government service or private business venture
which is funded and operated through a partnership of government and one or more private sector companies.  PPP, P3 or P3

PPP involves a contract between a public sector authority (sometimes referred to as the state sector or the government sector, is a part of the state that deals with either the production, ownership, sale, provision, delivery and allocation of goods and services by and for the government or its citizens, whether national)  and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project.  In some types of PPP, the cost of using the service is borne exclusively by the users of the service and not by the taxpayer. In other types (notably the private finance initiative), capital investment is made by the private sector on the weakness of a contract with government to provide agreed services and the cost of providing the service is borne wholly or in part by the government. Government contributions to a PPP may also be in kind (notably the transfer of existing assets). In projects that are aimed at creating public goods like in the infrastructure sector, the government may provide a capital subsidy in the form of a one-time grant, so as to make it more attractive to the private investors. In some other cases, the government may support the project by providing revenue subsidies, including tax breaks or by removing guaranteed annual revenues for a fixed time period. Public private partnerships or P3 can be the long-awaited solution for the construction industry, developing new strategic alliances, improving public services and reducing government costs. Public private partnerships can be negotiated using different contracting methods producing the projected results allowing a faster benefit to all citizens. Depending on the job being executed Public Private...
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