PPPs

Public-private partnerships (PPPs) are long-term contracts in which a public authority collaborates with a private sector partner to procure and manage infrastructure or services that are traditionally provided by the public sector. The private partner typically designs, builds, finances, operates, and maintains the asset for a defined period, after which it is transferred back or handed over to the public sector. PPPs are intended to deliver public infrastructure and services with improved efficiency, quality, and risk management while preserving public oversight and accountability.

In a PPP, the private sector bears development and lifecycle risks, while the public authority retains policy responsibility and overall control. Payment to the private partner is usually linked to availability or performance rather than the volume of usage, and funding may derive from private capital, public funds, or blended financing. Contract terms include service standards, performance monitoring, and remedies for underperformance.

Common PPP models include design-build-finance-operate (DBFO), build-operate-transfer (BOT), and concessions, as well as variations that transfer ownership or long-term maintenance responsibilities. PPPs are frequently used for transportation projects, water and wastewater facilities, hospitals, schools, prisons, and other public utilities.

Public sector justification rests on value-for-money assessments, lifecycle costing, and risk transfer analyses. Proponents argue PPPs can accelerate delivery, improve maintenance, and mobilize private capital, while critics point to higher long-term costs, complex contracts, reduced transparency, and exposure to private-sector risk through renegotiations.

Governance involves clear contracting, independent oversight, performance measurement, and public reporting. Many countries employ standardized procurement processes and post-audits to ensure accountability and assess value-for-money over the project lifecycle.