Public-Private Partnership (PPP) Model

• PPP is an arrangement between government and private sector for the provision of public assets and/or public services. Public-private partnerships allow large-scale government projects, such as roads, bridges, or hospitals, to be completed with private funding.
• In this type of partnership, investments are undertaken by the private sector entity, for a specified period of time.
• These partnerships work well when private sector technology and innovation combine with public sector incentives to complete work on time and within budget.
• As PPP involves full retention of responsibility by the government for providing the services, it doesn’t amount to privatization.
• There is a well defined allocation of risk between the private sector and the public entity.
• Private entity is chosen on the basis of open competitive bidding and receives performance linked payments.
• The PPP route can be an alternative in developing countries where governments face various constraints on borrowing money for important projects.
• It can also give required expertise in planning or executing large projects.