What is a public private partnership?

 Public private partnerships involve collaboration between a government agency and a private sector company that can be used to finance, build, and operate projects, such as public transportation networks, infrastructure projects, public service delivery activities and so on. It is a contractual agreement between the government and the private organisations also referred to as providers, to render or provide services to the citizens within the specified time-frame, budget, quantity and quality. An important point to be kept in view is under this partnership arrangement, accountability for the delivery of public services is retained by the public sector, whereas under privatisation, accountability is on the private sector.

The World Bank (2012) defines the PPP concept as “a long-term contract between private party and government agency for providing a public asset or service, in which the private party bears a significant risk and management responsibility.”

The Organisation for Economic Cooperation and Development (OECD, 2012) formally defines PPPs as “long-term contractual arrangements between the government and a private partner, whereby the latter delivers and funds public services using a capital asset, sharing the associated risks.”

The PPPs are also called 3Ps. The Government of India defines 3Ps as “a partnership between a public sector entity (sponsoring authority) and a private sector entity (a legal entity in which 51 per cent or more of equity is with the private partner/s) for the creation and /or management of infrastructure for public purpose for a specified period of time (concession period) on commercial terms and in which the private partner has been procured through a transparent and open procurement system. The Government of India recognises several types of PPPs, including: User-fee based Build Operate Transfer or BOT model, Performance based management/maintenance contracts and Modified Design-Build (Turnkey) contracts.

Today, there are many PPP projects in various stages of implementation throughout the country. PPPs have been implemented in multiple countries, and are primarily used for infrastructure projects, such as the building of highways, ports, schools, hospitals, transport systems, water and sewerage systems etc. It is a paradigm shift in the role of the government from direct provision of goods and services to alternate service delivery mechanisms. This is seen as a sustainable financing and institutional mechanism with the potential of bridging the infrastructure gap.

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