What are PPP’s

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Public private partnerships (PPP’s) refers to arrangements, typically medium to long term, between the public and private sectors whereby part of the services or works that fall under the responsibilities of the public sector are provided by the private sector, with clear agreement on shared objectives for delivery of public infrastructure and/ or public services.

It typically does not include service contracts or turnkey construction contracts, which are categorized as public procurement projects, or the privatization of utilities where there is a limited ongoing role of the public sector.

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PPP’s in infrastructure can be a means to enabling the development or improvement of energy, water, transport and telecommunications and information technology through the participation of private and government entities. Where governments are facing aging infrastructure and require more efficient services, a partnership with the private sector can help foster new solutions, including clean technology.

PPP’s combine the skills and resources of both the public and private sectors in new ways through sharing of risks and responsibilities. This enables governments to benefit from the expertise of the private sector, and allows them to focus instead on policy, planning and regulation by delegating day-to-day operations. In order to achieve a successful partnership, a careful analysis of the long-term development objectives and risk allocation is essential.

In addition, the legal framework must adequately support this new model of service delivery and be able to monitor and regulate the outputs and services provided. A well-drafted PPP agreement would be informed by both the laws of the country and international best practices to clearly delineate risks and responsibilities.