Regulation, Institutions and Community
Chapter 3: Organising long-term relationships between PPP/PFI partners
Public–private partnerships/Private Finance Initiatives (PPPs/PFIs) are long-term public contracts relying on cooperation between public and private entities to provide public infrastructures and services, while allocating risks between them. In materially delivering specific infrastructures and services, PPPs/PFIs connect public authorities, contractors and individual users in the regulatory space. In setting up PPPs/PFIs, public authorities have to make a whole range of choices, accentuated by the polycentric issues PPPs/PFIs involve: the likely but unknown changes necessary over their long duration and the various third parties affected as users, taxpayers or otherwise. This chapter maps how the public and private actors within a PPP/PFI relate to each other and according to which legal or non-legal principles discretion is exercised in the PPP regulatory space. PPPs/PFIs need to coordinate the interests pursued by each partner, i.e. the public interest and the private contractors’ economic interests. In the exercise of discretion linked to this coordination, three different moments are relevant: the elaboration, signing and performance of the PPPs/PFIs. For each of them, a basic set of techniques is identified: public procurement, relational nexus and contract. When present in these techniques, the law starts from the logic of competition or opposition. Therefore PPPs/PFIs are basically organised according to a market-analogue model. However, this only tells part of the story, as dialogue and cooperation are also needed.
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