The Challenge of Public–Private Partnerships

The Challenge of Public–Private Partnerships

Learning from International Experience

Edited by Graeme A. Hodge and Carsten Greve

The aim of the book is to investigate how PPP reforms function in comparison to the more traditional methods of providing public sector services and infrastructure and who typically experiences the successes and failures of these reforms.

Chapter 4: Getting the contract right

Joanne Evans and Diana Bowman

Subjects: economics and finance, public sector economics, politics and public policy, public policy


Joanne Evans and Diana Bowman INTRODUCTION Public–private partnerships (PPPs) are notoriously hard to define. Stern and Harding (2002:127) characterize PPPs as ‘a loose term applied to any venture that embraces both public and private sectors’. In the wider sense, pretty much any form of public procurement of private goods and services would constitute a public private partnership. This is consistent with the approach of Broadbent and Laughlin (2003:332) who assert that ‘PPPs involve organisations whose affiliations lie in the public and private sectors working together in partnership to provide a service.’ In contrast, PPPs may be more narrowly defined as partnerships between the public and private sectors for the financing, design, construction, operation and maintenance, and/or provision of assets or infrastructure and associated services, which have traditionally been provided by the public sector (Webb and Pulle, 2002). Liddle (1996:12) argues that PFIs, a narrower form of PPP, are ‘basically a hire–purchase scheme that enables the government to buy big-ticket items without paying cash on the nail’. In the context in which the term is increasingly used, a public–private partnership is constituted by combining different aspects of public infrastructure and associated services to be provided by the private sector (Evans, 2003). This chapter will focus on PPPs in this context in its discussion of contracts. Despite the obvious difficulties in reaching a universal definition of PPPs, a number of key features of today’s PPP arrangements can been identified. Amongst...

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