What is PPP
The Organization for Economic Co-operation and Development (OECD) defines a Public Private Partnership (PPP) as an agreement between the government and one or more private partners (which may include the operators and the financers). Within the agreement, the private partners deliver the service so that the service delivery objectives of the government are aligned with the profit objectives of the private partners. Furthermore, the effectiveness of the alignment depends on a sufficient transfer of risk to the private partners.
According to the International Monetary Fund, PPPs refer to arrangements in which the private sector supplies infrastructure assets and services that traditionally have been provided by the government. In addition to private execution and financing of public investment, PPPs have two other important characteristics: an emphasis on service provision and investment by the private sector. In this way, significant risk is transferred from the government to the private sector.
PPPs are involved in a wide range of social and economic infrastructure projects. However, they are mainly used to build and operate hospitals, schools, prisons, roads, bridges and tunnels, light rail networks, air traffic control systems, and water and sanitation plants.
The PPP Guide is consistent with the World Bank Group definition of PPP:
A long-term contract between a private agent (or private economic operator) and a public agent (also referred as government authority or public authority), for the development and/or management of a public asset or service, in which the private agent bears significant risk and management responsibility thorough the life of the contract, and remuneration is significantly linked to performance, maintenance and/or the demand or use of the asset or service.
(Important notice: The information quoted in this section are extracted from APMG International official website: