Public Private Partner Ship in Social and Infrastructure Sector
Literature Survey
Rational for PPP: 1) PPP allows the government to tap the private sector’s capacity to innovate. Instead, the government will spell out the services it needs, and the desired outcomes/outputs. The private sector can then introduce innovative solutions to meet the government’s objectives. 2) In a PPP project, the government and the private sector share the responsibilities of delivering a service depending on each party’s expertise. 3) In a PPP project, access to private capital frees government capital to be used in projects with higher public policy objectives 4) When structured appropriately, PPPs will deliver public services that can better meet the needs of the public without compromising public policy goals and needs. 5) The government will also ensure that public interest is protected in all PPP projects and that service delivery will meet public needs at the best value for money when the private sector is brought in to provide government services. While service delivery through a PPP changes the means of delivering services, it does not change the government’s accountability for ensuring that the services are delivered. The department’s focus shifts from providing the service to managing the service provider.
PPP Models:
The PPP models vary from short-term simple management contracts (with or without Investment requirements) to long-term and very complex BOT form, to divestiture. These models vary mainly by:
1) Ownership of capital assets 2) Responsibility for investment 3) Assumption of risks, and 4) Duration of contract.
The PPP models can be classified into four broad categories in order of generally (but not always) increased involvement and assumption of risks by the private sector. The Four broad categorizations of participation are:
1) Supply and management contracts 2) Turnkey projects 3) Lease 4) Concessions 5) Private ownership of assets.
Supply and Management Contracts:
A
Rational for PPP: 1) PPP allows the government to tap the private sector’s capacity to innovate. Instead, the government will spell out the services it needs, and the desired outcomes/outputs. The private sector can then introduce innovative solutions to meet the government’s objectives. 2) In a PPP project, the government and the private sector share the responsibilities of delivering a service depending on each party’s expertise. 3) In a PPP project, access to private capital frees government capital to be used in projects with higher public policy objectives 4) When structured appropriately, PPPs will deliver public services that can better meet the needs of the public without compromising public policy goals and needs. 5) The government will also ensure that public interest is protected in all PPP projects and that service delivery will meet public needs at the best value for money when the private sector is brought in to provide government services. While service delivery through a PPP changes the means of delivering services, it does not change the government’s accountability for ensuring that the services are delivered. The department’s focus shifts from providing the service to managing the service provider.
PPP Models:
The PPP models vary from short-term simple management contracts (with or without Investment requirements) to long-term and very complex BOT form, to divestiture. These models vary mainly by:
1) Ownership of capital assets 2) Responsibility for investment 3) Assumption of risks, and 4) Duration of contract.
The PPP models can be classified into four broad categories in order of generally (but not always) increased involvement and assumption of risks by the private sector. The Four broad categorizations of participation are:
1) Supply and management contracts 2) Turnkey projects 3) Lease 4) Concessions 5) Private ownership of assets.
Supply and Management Contracts:
A