Public-private partnership
Overview
Public–private 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
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

 companies. These schemes are sometimes referred to as PPP, P3 or P3.

PPP involves a contract between a public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

 authority 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.
Encyclopedia
Public–private 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
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

 companies. These schemes are sometimes referred to as PPP, P3 or P3.

PPP involves a contract between a public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

 authority 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
Private Finance Initiative
The private finance initiative is a way of creating "public–private partnerships" by funding public infrastructure projects with private capital...

), capital investment is made by the private sector on the strength 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 good
Public good
In economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...

s like in the infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

 sector, the government may provide a capital subsidy in the form of a one-time grant
Grant (money)
Grants are funds disbursed by one party , often a Government Department, Corporation, Foundation or Trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. In order to receive a grant, some form of "Grant Writing" often referred to as either a proposal...

, 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 break
Tax break
Tax break is a slang term referring to any item which reduces tax, including any tax exemption, tax deduction, or tax credit. Tax break is also a pejorative term used in the United States to refer to purportedly favorable tax treatment of any class of persons, as in "individuals get a tax break...

s or by providing guaranteed annual revenues
Annuity (finance theory)
The term annuity is used in finance theory to refer to any terminating stream of fixed payments over a specified period of time. This usage is most commonly seen in discussions of finance, usually in connection with the valuation of the stream of payments, taking into account time value of money...

 for a fixed period.

Typically, a private sector consortium forms a special company called a "special purpose vehicle" (SPV) to develop, build, maintain and operate the asset for the contracted period. In cases where the government has invested in the project, it is typically (but not always) allotted an equity
Ownership equity
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...

 share in the SPV. The consortium is usually made up of a building contractor, a maintenance company and bank lender(s). It is the SPV that signs the contract with the government and with subcontractors to build the facility and then maintain it. In the infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

 sector, complex arrangements and contracts that guarantee and secure the cash flow
Cash flow
Cash flow is the movement of money into or out of a business, project, or financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be used for calculating other parameters that give information on a company's value and situation.Cash flow...

s and make PPP projects prime candidates for project financing
Project finance
Project finance is the long term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors...

. A typical PPP example would be a hospital building financed and constructed by a private developer and then leased to the hospital authority. The private developer then acts as landlord, providing housekeeping and other non-medical services while the hospital itself provides medical services.

Origins

Pressure to change the standard model of public procurement arose initially from concerns about the level of public debt, which grew rapidly during the macroeconomic dislocation of the 1970s and 1980s. Governments sought to encourage private investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 in infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

, initially on the basis of accounting fallacies arising
from the fact that public accounts did not distinguish between recurrent and capital expenditures.

The idea that private provision of infrastructure represented a way of providing infrastructure at no cost to the public has now been generally abandoned; however, interest in alternatives to the standard model of public procurement persisted. In particular, it has been argued that models involving an enhanced role for the private sector, with a single private-sector organization taking responsibility for most aspects of service provisions for a given project, could yield an improved allocation of risk
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...

, while maintaining public accountability
Accountability
Accountability is a concept in ethics and governance with several meanings. It is often used synonymously with such concepts as responsibility, answerability, blameworthiness, liability, and other terms associated with the expectation of account-giving...

 for essential aspects of service provision.

Initially, most public–private partnerships were negotiated individually, as one-off deals, and much of this activity began in the 1990's.
Britain:
In 1992, the Conservative
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...

 government of John Major
John Major
Sir John Major, is a British Conservative politician, who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 1990–1997...

 in the UK introduced the private finance initiative
Private Finance Initiative
The private finance initiative is a way of creating "public–private partnerships" by funding public infrastructure projects with private capital...

 (PFI), the first systematic programme aimed at encouraging public–private partnerships. The 1992 programme focussed on reducing the Public Sector Borrowing Requirement
Public sector borrowing requirement
Public sector borrowing requirement is the old name for the budget deficit in the United Kingdom. The budget deficit has been renamed to the public sector net cash requirement to avoid confusion with net borrowing....

, although, as already noted, the effect on public accounts was largely illusory. The Labour
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...

 government of Tony Blair
Tony Blair
Anthony Charles Lynton Blair is a former British Labour Party politician who served as the Prime Minister of the United Kingdom from 2 May 1997 to 27 June 2007. He was the Member of Parliament for Sedgefield from 1983 to 2007 and Leader of the Labour Party from 1994 to 2007...

, elected in 1997, persisted with the PFI but sought to shift the emphasis to the achievement of "value for money," mainly through an appropriate allocation of risk.

Australia:
A number of Australian state governments have adopted systematic programmes based on the PFI. The first, and the model for most others, is Partnerships Victoria.

Canada:
The federal conservative government under Stephen Harper in Canada solidified its commitment to P3s with the creation of a crown corporation, P3 Canada Inc, this in 2009. The Canadian vanguards for P3s have been provincial organizations, supported by the Canadian Council for Public-Private Partnerships established in 1993 (a member-sponsored organization with representatives from both the public and the private sectors). As proponents of the concept of public-private partnerships (PPP's), The Council conducts research, publishes findings, facilitates forums for discussion and sponsors an Annual Conference on topics related to PPP's, both domestic and international. Each year the Council celebrates successful public-private partnerships through the National Awards Program held concurrently with the annual conference in November.

The importance of public–private partnerships

Over the past two decades more than 1400 PPP deals were signed in the European Union, which represent an estimated capital value of approximately €260 billion. Since the onset of the financial crisis in 2008, estimates suggest that the number of PPP deals closed has fallen more than 40 percent. These difficulties have placed significant strains on governments that have come to rely on PPPs as an important means for the delivery of long-term infrastructure assets and related services. Moreover, this has occurred precisely at a time when investments in public-sector infrastructure are seen as an important means of maintaining economic activity during the crisis, as was highlighted in a European Commission communication on PPPs. As a result of the importance of PPPs to economic activity, in addition to the complexity of such transactions, the European PPP Expertise Centre (EPEC) was established to support public-sector capacity to implement PPPs and share timely solutions to problems common across Europe in PPPs.

Controversy

A common problem with PPP projects is that private investors obtained a rate of return that was higher than the government’s bond rate
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...

, even though most or all of the income risk associated with the project was borne by the public sector.

It is certainly the case that government debt is cheaper than the debt provided to finance PFI projects, and cheaper still than the overall cost of finance for PFI projects, i.e. the weighted average cost of capital (WACC). This is of course to attempt to compare incompatible and incomplete economic circumstances. It ignores the position of taxpayers who play the role of equity in this financing structure. Making a simple comparison, however, between the government’s cost of debt and the private-sector WACC implies that the government can sustainably fund projects at a cost of finance equal to its risk-free borrowing rate. This would be true only if existing borrowing levels were below prudent limits. The constraints on public borrowing suggest, nevertheless, that borrowing levels are not currently too low in most countries. These constraints exist because government borrowing must ultimately be funded by the taxpayer.

A number of Australian studies of early initiatives to promote private investment in infrastructure concluded that, in most cases, the schemes being proposed were inferior to the standard model of public procurement based on competitively tendered construction of publicly owned assets (Economic Planning Advisory Commission (EPAC) 1995a,b; House of Representatives Standing Committee on Communications Transport and Microeconomic Reform 1997; Harris 1996; Industry Commission 1996; Quiggin 1996).

One response to these negative findings was the development of formal procedures for the assessment of PPPs in which the focus was on "value for money," rather than reductions in debt. The underlying framework was one in which value for money was achieved by an appropriate allocation of risk. These assessment procedures were incorporated in the private finance initiative and its Australian counterparts from the late 1990s onwards.

In 2009, the New Zealand Treasury
New Zealand Treasury
The New Zealand Treasury is a public sector organisation and the Government’s lead advisor on economic and financial policy. Its role is to help the Government improve economic performance and manage scarce resources...

, in response to inquiries by the new National Party
New Zealand National Party
The New Zealand National Party is the largest party in the New Zealand House of Representatives and in November 2008 formed a minority government with support from three minor parties.-Policies:...

 government, released a report on PPP schemes that concluded that "there is little reliable empirical evidence about the costs and benefits of PPPs" and that there "are other ways of obtaining private sector finance", as well as that "the advantages of PPPs must be weighed against the contractual complexities and rigidities they entail".

Nowadays, a new model is also being discussed, called the Public–Private Community Partnership (PPCP) model, wherein both the government and private players work together for social welfare, eliminating the prime focus of private players on profit. This model is being applied more in developing nations such as India. Success is being achieved through this model too. it mainly helps to ramp up the development process as the focus is shifted towards target achievement rather than profit achievement.

Privatisation of water

After a wave of privatisation of many water services in the nineties of the previous century, mostly in developing countries, experiences show that global water corporation have not brought the promised improvements in public water utilities. Instead of lower prices, large volumes of investment and improvements in the connection of the poor to water and sanitation, water tariffs have increased out of reach of poor households. Water multinationals are withdrawing from developing countries and the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

 is reluctant to provide support.

The privatisation of the water services of the city of Paris was proven to be unwanted and at the end of 2009 the city did not renew its contract with two of the French water corporations. After one year of being controlled by the public the water tariff has been cut by 5 to 10%

Health public–private partnerships

A health services PPP can be described as a long-term contract (typically 15–30 years) between a public-sector authority and one or more private sector companies operating as a legal entity. The government provides the strength of its purchasing power, outlines goals for an optimal health system, and empowers private enterprise to innovate, build, maintain and/or manage delivery of agreed-upon services over the term of the contract. The private sector receives payment for its services and assumes substantial financial, technical and operational risk while benefitting from the upside potential of shared cost savings.

The private entity is made up of any combination of participants who have a vested interested in working together to provide core competencies in operations, technology, funding and technical expertise. The opportunity for multi-sector market participants includes hospital providers and physician groups, technology companies, pharmaceutical and medical device companies, private health insurers, facilities managers and construction firms. Funding sources could include banks, private equity firms, philanthropists and pension fund managers.

For more than two decades public–private partnerships have been used to finance health infrastructure. Now governments are increasingly looking to the PPP-model to solve larger problems in healthcare delivery. There is not a country in the world where healthcare is financed entirely by the government. While the provision of health is widely recognized as the responsibility of government, private capital and expertise are increasingly viewed as welcome sources to induce efficiency and innovation. As PPPs move from financing infrastructure to managing care deliery, there is an opportunity to reduce overall cost of healthcare.

Market potential for health PPPs

The larger scope of Health PPPs to manage and finance care delivery and infrastructure means a much larger potential market for private organizations. Spending on healthcare among the Organisation for Economic Cooperation and Development (OECD) and BRIC nations of Brazil, Russia, India and China will grow by 51 percent between 2010 and 2020, amounting to a cumulative total of more than $71 trillion. Of this, $3.6 trillion is projected to be spent on health infrastructure and $68.1 trillion will be spent on non-infrastructure health spending cumulatively over the next decade. Annually, spending on health infrastructure among the OECD and BRIC nations will increase to $397 billion by 2020, up from $263 billion in 2010. The larger market for health PPPs will be in non-infrastructure spending, estimated to be more than $7.5 trillion annually, up from $5 trillion in 2010.

Health spending in the United States accounts for approximately half of all health spending among OECD nations, but the biggest growth will be outside of the U.S. According to PwC projections, the countries that are expected to have the highest health spending growth between 2010 and 2020 are China, where health spending is expected to increase by 166 percent, and India, which will see a 140 percent increase. As health spending increases it is putting pressure on governments and spurring them to look for private capital and expertise.

Product development partnerships

Product development partnerships (PDPs) are a class of public–private partnerships that focus on pharmaceutical product development for diseases of the developing world. These include preventive medicines such as vaccines and microbicides, as well as treatments for otherwise neglected diseases. PDPs were first created in the 1990s to unite the public sector's commitment to international public goods for health with industry's intellectual property, expertise in product development, and marketing.

International PDPs work to accelerate research and development of pharmaceutical products for underserved populations that are not profitable for private companies. They may also be involved in helping plan for access and availability of the products they develop to those in need in their target populations. Publicly financed, with intellectual property rights granted by pharmaceutical industry partners for specific markets, PDPs are able to focus on their missions rather than concerns about recouping development costs through the profitability of the products being developed.

These not-for-profit organizations bridge public- and private-sector interests, with a view toward resolving the specific incentive and financial barriers to increased industry involvement in the development of safe and effective pharmaceutical products.

International examples

International product development partnerships and public–private partnerships include:
  • The PATH Malaria Vaccine Initiative (MVI) is a global program of the international nonprofit organization PATH. MVI was established in 1999 to accelerate the development of malaria vaccines and ensure their availability and accessibility in the developing world.
  • The Drugs for Neglected Diseases Initiative
    Drugs for Neglected Diseases Initiative
    The Drugs for Neglected Diseases Initiative 501 is a non-profit drug research and development organization that is developing new treatments for neglected diseases....

     (DNDi) was founded in 2003 as a not-for-profit drug development organization focused on developing novel treatments for patients suffering from neglected diseases.
  • Aeras Global TB Vaccine Foundation
    Aeras Global TB Vaccine Foundation
    Aeras is a non-profit Product Development Partnership dedicated to the development of effective tuberculosis vaccine regimens that will prevent TB infection in all age groups and will be affordable, available and adopted worldwide. Founded in 2003, Aeras is located in Rockville, Maryland,...

     is a PDP dedicated to the development of effective tuberculosis
    Tuberculosis
    Tuberculosis, MTB, or TB is a common, and in many cases lethal, infectious disease caused by various strains of mycobacteria, usually Mycobacterium tuberculosis. Tuberculosis usually attacks the lungs but can also affect other parts of the body...

     (TB) vaccine regimens that will prevent TB in all age groups and will be affordable, available and adopted worldwide.
  • FIND http://www.finddiagnostics.org/ is a Swiss-based non-profit organization established in 2003 to develop and roll out new and affordable diagnostic tests and other tools for poverty-related diseases.
  • The Global Alliance for Vaccines and Immunization
    Global Alliance for Vaccines and Immunization
    The GAVI Alliance is a public-private global health partnership committed to saving children’s lives and protecting people’s health by increasing access to immunisation in poor countries...

     is financed per 75% (750 Mio.US$) by the Bill and Melinda Gates Foundation, which has a permanent seat on its supervisory board.
  • The Global Fund to Fight AIDS, Tuberculosis & Malaria
    The Global Fund to Fight AIDS, Tuberculosis & Malaria
    The Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organization that aims to "[a]ttract and disburse additional resources to prevent and treat HIV and AIDS, tuberculosis and malaria." A public–private partnership, the organization has its secretariat in Geneva,...

    , a Geneva
    Geneva
    Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...

    -based UN-connected organisation, was established in 2002 to dramatically scale up global financing of interventions against the three pandemics.
  • The International AIDS Vaccine Initiative
    International AIDS Vaccine Initiative
    The International AIDS Vaccine Initiative is a global not-for-profit, public-private partnership working to accelerate the development of vaccines to prevent HIV infection and AIDS. IAVI researches and develops vaccine candidates, conducts policy analyses, serves as an advocate for the field and...

     (IAVI), a biomedical public–private product development partnership (PDP), was established in 1996 to accelerate the development of a vaccine to prevent HIV infection and AIDS. IAVI is financially supported by governments, multilateral organizations, and major private-sector institutions and individuals.
  • The International Partnership for Microbicides
    International Partnership for Microbicides
    The International Partnership for Microbicides or IPM is a non-profit product development partnership founded by Dr. Zeda Rosenberg in 2002 to prevent HIV transmission by accelerating the development and availability of a safe and effective microbicide for use by women in developing...

     is a non-profit product development partnership (PDP), founded in 2002, dedicated to the development and availability of safe, effective microbicides for use by women in developing countries to prevent the sexual transmission of HIV. See also Microbicides for sexually transmitted diseases
    Microbicides for sexually transmitted diseases
    Microbicides for sexually transmitted diseases, are pharmacologic agents and chemical substances that are capable of killing or destroying certain microorganisms that commonly cause human infection, for example the human immunodeficiency virus....

    .
  • Medicines for Malaria Venture (MMV)
    Medicines for Malaria Venture (MMV)
    Medicines for Malaria Venture , a not-for-profit public-private partnership, was established as a foundation in Switzerland in 1999. Its mission is to reduce the burden of malaria in disease-endemic countries by discovering, developing and facilitating delivery of new, effective and affordable...

     is a not-for-profit drug discovery, development and delivery organization, established as a Swiss foundation in 1999, based in Geneva
    Geneva
    Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...

    . MMV is supported by a number of foundations, governments and other donors.
  • The TB Alliance
    TB Alliance
    The Global Alliance for TB Drug Development is a non-profit organization dedicated to the discovery and development of new, faster-acting and affordable tuberculosis medicines....

     is financed by public agencies and private foundations, and partners with research institutes and private pharmaceutical companies to develop faster-acting, novel treatments for tuberculosis that are affordable and accessible to the developing world.
  • A UN agency, the World Health Organization
    World Health Organization
    The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...

     (WHO), is financed through the UN system by contributions from member states. In recent years, WHO's work has involved more collaboration with NGOs and the pharmaceutical industry, as well as with foundations such as the Bill and Melinda Gates Foundation and the Rockefeller Foundation. Some of these collaborations may be considered global public–private partnerships (GPPPs); half of the WHO budget is financed by private foundations.
  • The United Nations Foundation
    United Nations Foundation
    The United Nations Foundation started up in 1998 with a $1 billion grant from Ted Turner in order to support the United Nations in executing its programs worldwide. The creation of the Foundation was intended to encourage other donors to also support the UN in its activities...

     & Vodafone Foundation Technology Partnership, a five-year, $30 million commitment, leverages the power of mobile technology to support and strengthen humanitarian work worldwide. Partners include the World Health Organization
    World Health Organization
    The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...

     (WHO), DataDyne, the mHealth Alliance, the World Food Program (WFP), Telecoms Sans Frontieres, and the UN Office for the Coordination of Humanitarian Affairs (OCHA).


Similar public–private partnerships outside the realm of specific public-health goods include:
  • Public–private partnerships for disaster management bring together the private sector for PPP models with a tool box of partnership opportunities towards resilience and sustainability goals.
  • The public–private partnership for improving teaching and learning in schools in Abu Dhabi, United Arab Emirates.

Specific cases

While some PPP projects have proceeded smoothly, others have been highly controversial. Australian examples include the Airport Link, the Cross City Tunnel
Cross City Tunnel
The Cross City Tunnel is a 2.1 km-long tunnel located in Sydney, Australia. It links Darling Harbour on the Western fringe of the central business district to Rushcutters Bay in the Eastern Suburbs...

, and the Sydney Harbour Tunnel
Sydney Harbour Tunnel
The Sydney Harbour Tunnel is a twin-tube road tunnel in Sydney, Australia. The tunnel was completed and opened to traffic in August 1992 to provide a second vehicular crossing of Sydney Harbour to alleviate congestion on the Sydney Harbour Bridge....

, all in Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...

; the Southern Cross Station
Southern Cross Station
Southern Cross is a major railway station and transport hub in Melbourne Docklands, Victoria, Australia. It is located on Spencer Street between Collins and La Trobe Streets at the western edge of the central business district...

 redevelopment in Melbourne
Melbourne
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...

; and the Robina
Robina, Queensland
Robina is a suburb on the Gold Coast in Queensland, Australia. At the 2006 Census, Robina had a population of 19,182.The Robina Town Centre shopping centre and Bond University are located in Robina.- History :...

 hospital in Queensland
Queensland
Queensland is a state of Australia, occupying the north-eastern section of the mainland continent. It is bordered by the Northern Territory, South Australia and New South Wales to the west, south-west and south respectively. To the east, Queensland is bordered by the Coral Sea and Pacific Ocean...

.

In India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, public-private partnerships have been extremely successful in developing infrastructure, particularly road assets under the National Highways Authority of India
National Highways Authority of India
The National Highways Authority of India is an autonomous agency of the Government of India, responsible for management of a network of over 60,000 km of National Highways in India...



In Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

, public–private partnerships have become significant in both social and infrastructure development. PPP Canada Inc. was created as a Crown corporation with an independent Board of Directors reporting through the Minister of Finance to Parliament. Its mandate is to improve the delivery of public infrastructure by achieving better value, timeliness and accountability to taxpayers, through P3s. The Corporation became operational in February 2009 with the appointments of a chair of the board of directors and a chief executive officer.

PPPs exist in a variety of forms in British Columbia
British Columbia
British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...

 through the focused efforts of Partnerships BC, a company registered under the Business Corporations Act, that is wholly owned by the Province of British Columbia and reports to its shareholder the Minister of Finance. Projects include the Canada Line
Canada Line
Canada Line is a rapid transit line in the Metro Vancouver region of British Columbia, Canada. Opened in August 2009, it is the third line in TransLink's SkyTrain metro network, servicing Vancouver, Richmond, and the Vancouver International Airport...

 rapid transit
Rapid transit
A rapid transit, underground, subway, elevated railway, metro or metropolitan railway system is an electric passenger railway in an urban area with a high capacity and frequency, and grade separation from other traffic. Rapid transit systems are typically located either in underground tunnels or on...

 line, the Abbotsford
Abbotsford, British Columbia
Abbotsford is a Canadian city located in the Lower Mainland of British Columbia, adjacent to Greater Vancouver. It is the fifth largest municipality in British Columbia, home to 123,864 people . Its Census Metropolitan Area, which includes the District of Mission, is the 23rd largest in Canada,...

 Hospital and Cancer Centre and run of river hydro-electric projects in Toba River. In Quebec
Quebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....

, a number of notable PPPs include the McGill University Health Centre
McGill University Health Centre
The McGill University Health Centre is a network of teaching and community hospitals in Montreal, Quebec, Canada affiliated with McGill University....

, the new western extension of Autoroute 30
Quebec Autoroute 30
Autoroute 30 is a superhighway in Quebec, Canada.There are three segments currently open for travel:...

 and Université de Montréal
Université de Montréal
The Université de Montréal is a public francophone research university in Montreal, Quebec, Canada. It comprises thirteen faculties, more than sixty departments and two affiliated schools: the École Polytechnique and HEC Montréal...

's Hospital Research Center.

In the UK, two-thirds of the London Underground PPP was taken back into public control in July 2007 after only 4 and a half years at an estimated cost of £2 billion and the remaining one-third was taken back into public control in May 2010 after 7 and a half years for a purchase price of £310m. The Government had paid advisers £180m for structuring, negotiating and implementing the PPP and had reimbursed £275m of bid costs to the winning bidders. The 30 year PPP contract for the refurbishment of the MOD Main Building in London was estimated to give a saving of only £100,000 as compared to the £746.2m cost of public procurement. The refinancing of the Fazakerley Prison
Altcourse (HM Prison)
HM Prison Altcourse is a Category B men's private prison and Young Offenders Institution, located in the Fazakerley area of Liverpool in Merseyside, England. The Prison is operated by G4S.-History:...

 PFI contract following the completion of construction delivered an 81% gain to the private sector operator. The NATS PPP saw 51% of the UK's air traffic control service transferred to the private sector, however following the decline in air traffic after the September 11 attacks, the Government and BAA Limited each invested £65m in the private sector operator in 2003.

In Newfoundland Robert Gillespie Reid
Robert Gillespie Reid
Sir Robert Gillespie Reid was a Scottish railway contractor most famous for building large railway bridges in Canada and the United States...

 contracted to operate the railways for 50 years from 1898, though originally they were to become his property at the end of the period.

See also

  • European PPP Expertise Centre
  • Global Development Alliance
  • Global Partnership Initiative
    Global Partnership Initiative
    Global Partnership Initiative may refer to:* Global Partnership Initiative on Urban Youth Development in Africa* U.S. Department of State Global Partnership Initiative...

  • Global public–private partnership
  • Public/social/private partnership
    Public/social/private partnership
    Public/social/private partnerships are methods of co-operation between private and government bodies.-Models of cooperation between the market and the state: examples from Austria:...

     (PSPP)
  • Public Works and Government Services Canada
    Public Works and Government Services Canada
    Public Works and Government Services Canada is the department of the government of Canada with responsibility for the government's internal servicing and administration....

  • Private participation in railway share
    Private participation in railway share
    Private participation in railway share refers to a different approach of private investment, public private partnership either in infrastructure, rolling stock or to increase the railway transportation share as a major challenge for the future of the globe as a sustainable mode of transport...

  • USAID


Further reading

  • Burnett, M. "PPP – A decision maker's guide", European Institute of Public Administration, 2007
  • Chinchilla, C. "El nuevo contrato de colaboración entre el setor público y el sector privado", Revista Española de Derecho Administrativo nº 132 (2006)
  • Gonzalez Garcia, J. "El contrato de colaboración público privada", Revista de Administración Pública, nº 170 (2006).
  • HAacker, Violaine, "European Public-Ptivate Partnership on Media Literacy : a Boon to Adapt to Change", Comenius Journal, September 2011, pp. 10-11.
  • Linotte Didier, Un cadre juridique désormais sécurisé pour les contrats de partenariat, AJDA, n° 1/2005 du 10 janvier 2005.
  • Monera Frédéric, Les financements innovants de services et de projets publics, Revue de la Recherche Juridique – Droit prospectif, PUAM, 2005-1, p. 337 & s.
  • Moszoro M.
    Marian Moszoro
    Marian Moszoro Մարիան Մոշորո , Polish economist, in 2005-2006 he was Undersecretary of State, Deputy Minister of Finance of Poland, the youngest ever in the history of the Ministry.-Biography:...

    , Gasiorowski P. (2008), 'Optimal Capital Structure of Public-Private Partnerships', IMF Working Paper 1/2008. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1087179
  • Colman, J. (2002), ‘Mumbo jumbo…and other pitfalls:Evaluating PFI/PPP projects’, National Audit Office PFI / PPP Conference "Bringing about beneficial change, London, May.
  • Economic Planning Advisory Commission (EPAC) (1995), ‘Final Report of the Private Infrastructure Task Force’, Australian Government Publishing Service, Canberra.
  • Economic Planning Advisory Commission (EPAC) (1995), ‘Interim Report of the Private Infrastructure Task Force’, Australian Government Publishing Service, Canberra.
  • Harris, A.C. (1996), ‘Financing infrastructure: private profits from public losses’, Audit Office of NSW, Public Accounts Committee, Parliament of NSW, Conference, Public/Private infrastructure financing: Still feasible?, Sydney, September.
  • House of Representatives Standing Committee on Communications Transport and Microeconomic Reform, (1997), ‘Planning not Patching: An Inquiry Into Federal Road Funding’, The Parliament of the Commonwealth of Australia, Australian Government Publishing Service, Canberra.
  • Industry Commission (1996), ‘Competitive Tendering and Contracting by Public Sector Agencies’, Australian Government Publishing Service, Canberra.
  • Minnow, Martha and Jody Freeman (2009), Government By Contract: Outsourcing and American Democracy, Harvard U.P.
  • Möric, K. (2009), 'Les partenariats public-privé – le choix du partenaire privé au regard du droit communautaire, Editions Larcier, 264 p.
  • Quiggin, J. (1996), ‘Private sector involvement in infrastructure projects’, Australian Economic Review, 1st quarter, 51–64.
  • Spackman, M. (2002), ‘Public-private partnerships: lessons from the British approach’, Economic Systems, 26(3), 283–301.
  • Strauch, L. (2009), ‘Public Private Partnership in European Road Infrastructure: PPP as Investment Asset Following the M6 Road Project in Hungary’,VDM.
  • Nazar Talibdjanov and Sardorbek Koshnazarov, UNDP & Chamber of Commerce and Industry of Uzbekistan, Public-Private Partnership in Uzbekistan: Problems, Opportunities and Ways of Introduction (2008–2009)
  • Monbiot, G. (2000), ‘Captive State, The Corporate Takeover of Britain’, Macmillan.
  • Venkat Raman, A. and JW Bjorkman (2009), 'Public Private Partnerships in Health Care in India: Lessons for Developing Countries'. London. Routledge.
  • PwC Health Research Institute (2010), 'Build and beyond: The (r)evolution of healthcare PPPs' http://www.pwc.com/us/ppphealth

External links

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