Edited by Graeme A. Hodge, Carsten Greve and Anthony E. Boardman
Chapter 9: Different Delivery Models
Colin F. Duffield Introduction Common definitions for PPPs range from concession-based financing arrangements where repayment is based solely on user charges, to institutional PPPs. Such institutional PPPs frequently comprise mixed ownership structures involving public and private joint ownership. Other models involve a ‘special purpose vehicle’ (SPV), straight project finance arrangements under long-term contractual arrangements between the public and private sectors to provide a service for the term of the contract. The definition adopted for PPPs in this chapter is that of a long-term contract based on service outputs where there is significant risk transfer to the private sector. Typically these long-term contract obligations involve design, major procurement, operation and/or maintenance along with the provision of significant private finance. The transfer of responsibility for long-term service outcomes to the private sector is conceptually undertaken on the basis that bundling aspects of technical, commercial and financing activities (i.e. design, procurement, construction, operation and maintenance, business operations and project/facility financing) brings efficacy (or effectiveness), efficiency, sustainability and value for money. To understand if PPPs are likely to bring such value to a particular situation it is important to know the contextual situation and industry’s appetite for risk, the commercial opportunity and the availability and cost of finance. It is also important to understand the myriad of alternative procurement strategies that may provide mechanisms to achieve high performance. This chapter takes us through the range of ‘counterfactuals’ on the techniques to procure major public infrastructure, from simple public works, through competitive tendering, design and...
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