Public-Private Partnerships

infographic showing public private partnershipA public-private partnership (PPP) is an arrangement made between two or more entities from the public (government) and private (business) sectors, most often for collaboration on projects related to public infrastructure, community facilities and other similar services.

 

PPPs are typically long-term, and arrange for the sharing of investment, risk, reward and responsibility to the mutual benefit of both parties, ideally while contributing at least as much to the public good as would a purely government-run project.

PPP types and rationales

Various implementations of the public-private partnership exist, including:

  • The introduction of private-sector ownership to state-owned business; using the full range of possible structures and with the sale of either a majority or minority stake
  • Private finance initiatives; the public sector contracts private-sector service(s) on a long-term basis to leverage the latter’s management skills and its drive to succeed due to having private finance at risk
  • The sale of government services to wider markets; other arrangements where private-sector expertise and finance are used to exploit the commercial potential of government assets

Measuring success

For a PPP to be considered successful, it must be clear that any value added by such a public-private arrangement also benefits the users of public services and the community at large. To provide justification for any PPP arrangement, a government must:

  • Protect the public interest with a good-faith assessment of private-sector-proposed benefits and the costs of receiving them
  • Provide better value for the money and better management of money spent
  • Establishing regulations to ensure public services are accountable both to customers and the communities that rely on them
  • Maintaining as much government involvement in the PPP as continued public interest requires

References

"Public-Private Partnerships in Healthcare - HealthManagement.Org." HealthManagement, https://healthmanagement.org/c/it/issuearticle/public-private-partnerships-in-healthcare.

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