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Public - Private Partnerships

Public-private partnerships (PPPs) are commonly used for infrastructure projects like bridges, tunnels, and airports. PPPs provide advantages such as risk transfer from the public to private sector and allowing governments to conduct other investments. However, PPPs also involve risks like potential price increases for users if private firms take on uncontrollable risks.

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Simona Alexandra Ceburiac
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20 views1 page

Public - Private Partnerships

Public-private partnerships (PPPs) are commonly used for infrastructure projects like bridges, tunnels, and airports. PPPs provide advantages such as risk transfer from the public to private sector and allowing governments to conduct other investments. However, PPPs also involve risks like potential price increases for users if private firms take on uncontrollable risks.

Uploaded by

Simona Alexandra Ceburiac
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Public – private partnerships

When we speak about public-private partnerships the first thing that comes into my mind
is the most common sector where we can found them, infrastructure. We have PPPs in transport
infrastructure such as bridges, tunnels, airports, but also in municipal infrastructure – wastewater
facilities – and public service accomodations – prisons, school buildings.
These PPPs projects have many advantages, but they also have disadvantages.
One of the main benefits is the transfer of risks, because there is a possibility to transfer
most or all of the risks to the private entity, which can and want to explore opportunities even
though they involve risks. Government can extract long-term value-for-money through appropriate
risk transfer to the private sector over the life of the project – from design/ construction to
operations/ maintenance.
Another advantage is the possibility for conducting other public investments. PPPs are utilized
as a way of developing local private sector capabilities through joint ventures with large
international firms, as well as sub-contracting opportunities for local firms in areas such as civil
works, electrical works, facilities management, security services, cleaning services, maintenance
services.
Another benefit is the transfer of new technologies. We can say that PPPs represents a way of
introducing private sector technology and innovation in providing better public services through
improved operational efficiency.
Despite all of these advantages, there are also a number of potential risks associated with Public
Private Partnerships.
So there is a political and social risk for the private partner because some projects may be more
politically challenging to implement then others. It may exist a public sector workforce, that
doesn’t want to be transferred to the private sector, significant land or resettlement issues.
It also may increase the prices charged to the users of the infrastructure, because if private
firms bear risks beyond their control, like the risk of existing assets, their price for the service will
reflect this.

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