Public Private Partnership

Topics: Public economics, Waste legislation in the United Kingdom, Private sector Pages: 6 (1604 words) Published: September 1, 2013
Public-private Partnerships


During the past few years, the Province of New Brunswick has entered into several public-private partnership projects. It was one of the first provincial governments to embark on such endeavors and has been able to develop “best practices” to be applied to public-private partnership projects. This document contains guidelines for public-private partnerships reflecting these best practices.


Agreement between government and the private sector regarding the provision of public services or infrastructure. Purportedly a means of bringing together social priorities with the managerial skills of the private sector, relieving government of the burden of large capital expenditure, and transferring the risk of cost overruns to the private sector. Rather than completely transferring public assets to the private sector, as with Privatization. Government and business work together to provide services. The British Government has used PPP’s to finance the building of schools, hospitals, for defense contracts, and specific capital projects such as the Channel Tunnel Rail Link, the National Air Traffic Services, and improvements to the London Underground. The system has been criticized for blurring the lines between public and private provision, leading to a lack of accountability with regard to funding, risk exposure, and performance (see also Private Finance Initiative). — Alistair McMiIian

A business relationship between a private-sector company and a government agency for the purpose of completing a project that will serve the public. Public-private partnerships can be used to finance, build and operate projects such as public transportation networks, parks and convention centers. Financing a project through a public-private partnership can allow a project to be completed sooner or make it a possibility in the first place.

The Canadian Council for Public-Private Partnerships has adopted the following definition to help clear, what is meant by this concept. A public-private partnership is defined as “a cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards.” The essence of a public-private partnership arrangement is the sharing of risks. Central to any successful public- private partnership initiative is the identification of risk associated with each component of the project and the allocation of that risk factor to the public sector, the private sector or perhaps a sharing by both. Thus, the desired balance to ensure best value (for money) is based on an allocation of risk factors to the participants who are best able to manage those risks and thus minimize costs while improving performance. Best value is also enhanced by the social benefits (ie. educational, health) accrued through the ability to deliver programs earlier than otherwise might have been possible. The opportunity and ability to share resources with the private sector through a long-term relationship allows the government to pursue initiatives which may not otherwise have been possible for several years had a partnership arrangement not been achieved. Through an array of techniques, the private sector can apply its skills and resources to services that have traditionally been provided by the government.

As per the Scheme for Financial Support to Public Private Partnerships in Infrastructure, of the Government of India, “The Public-Private Partnership (PPP) Project means a project based on contract or concession agreement between a Government or statutory entity on the one side and a private sector company on the other side, for delivering an infrastructure service on payment of user charges.”

PPP broadly refers to long- term, contractual partnerships between public and private sector agencies, specially targeted towards...
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