Public Private Partnerships

Public Private Partnerships

The Worldwide Revolution in Infrastructure Provision and Project Finance

Darrin Grimsey and Mervyn K. Lewis

This path-breaking book considers the recent trend for governments to look increasingly to private sector finance, provided by private enterprises constructing and managing public infrastructure facilities in partnership with government bodies.

Chapter 10: An Assessment

Darrin Grimsey and Mervyn K. Lewis

Subjects: economics and finance, financial economics and regulation, public finance, public sector economics


CHARACTERISTICS OF PPPS This volume has examined the role of public private partnerships for infrastructure. Perhaps the most distinctive feature of the partnership mode is its flexibility, and this characteristic can be illustrated in a number of ways. First, the arrangement encompasses a variety of public sector–private sector interactions, such as leasing, franchises, concessions, BOT, BOOT, DBFO, DCMF, and joint ventures. Second, PPPs have been applied to a range of infrastructure categories: ‘hard economic’ (roads, bridges, railways, telecommunications, etc.); ‘hard social’ (hospitals, schools, water supply, sewerage, prisons, etc.); ‘soft economic’ (R & D facilitation, technology transfer); and ‘soft social’ (community services). Third, partnership-type arrangements operate in countries as diverse as Australia, Bulgaria, Chile, France, Malaysia, the Netherlands, the Philippines, Poland, Portugal, South Africa, the United Kingdom and the United States, to name some examples. PPPs allow for situations where revenues come from tolls and charges on the general public, to ones where the public sector is the customer and procures and pays for the services. The payment schedules build in many service quality and performance incentives. Fifth, if properly structured, a PPP contract is able to take account of new service demands and future monitoring and reporting requirements that may develop over the lifetime of a project. We have been at pains to argue that while all the different organizational arrangements that come under the rubric ‘private public partnership’ are ways of engaging the private sector in infrastructure, the degree of ‘partnership’ involved does differ. A successful partnership is based...

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