Benefits Of Public-private Partnerships Research Articles

Revolutionising Public Private Partnerships: A Transition to the Fifth Industrial Revolution

Purpose: The purpose of this article is to examine Public Private Partnerships (PPPs) in the Fifth Industrial Revolution (5IR). Government does not have the capacity to deliver services by itself. As a result, PPP have played an important role to assist government in delivering services in an efficient and reliable manner. Amongst the benefits of PPPs are value for money, risk transfer and affordability. Partnerships are increasingly important to assist government in achieving development goals. The fourth industrial revolution (4IR) presents a number of implications in terms of government service delivery. PPPs are necessary to navigate these changes. This article aims to determine how PPPs can be improved to transition to the 5IR. The 5IR entails a supersmart society where humans are the pivotal link in overseeing technology. Methodology: This article is descriptive and conceptual in nature. Unobtrusive methods are used to synthesise and integrate extant research. Findings: A conceptual model is developed to illustrate the necessary elements in forming a PPP ecosystem that is relevant to the 5IR and human-centric. Originality/Value: Very little research has been done on the 5IR, particularly no research has been done on the purpose, scope and nature of public private collaboration for improving PPPs in the 5IR.

The private in the public: The case of Norwegian private zoning plans

This paper investigates the Norwegian practice of private regulation planning (or private zoning plans), seeking to discern if and how the processes and resulting plans align with the acknowledged benefits of public private partnership (PPP). To assess the topic, we have employed a mixed-methods case-study approach, combining document studies with stakeholder interviews. Two cases were studied in two different municipalities in mid-Norway. We focused on the role of participation and the adaptation between private zoning plans and the holistic ambitions in the local comprehensive plans. Public participation is mandated by law in all municipal planning but the incentives to develop the role of participation might be neglected in private plans. Another observation is the challenge with aligning private initiatives with the overall ambitions phrased in the local comprehensive plan. As a general conclusion we state that these observations and the fact that the Norwegian planning system allows for private actors to take an active role in the planning process, could trigger more studies on the effects of the public-private partnership in the Norwegian planning system.

Public-private partnership: problems of contractual settlement

Given the benefits of public-private partnership (PPP), PPP relations, as well as the problems that arise in the contractual settlement of such relations are becoming increasingly important. Legislative requirements for the contractual form of partnership and an open list of contracts that can be concluded within the PPP do not differ in their clarity and clarity of interpretation, which results in the ambiguity of views on the rule of law when concluding agreements. Therefore, it is essential to analyze the problematic aspects of contractual regulation of relations in the field of PPP and suggest ways to solve them. The work aims to study the problems of contractual settlement of PPP. Research methodology such methods as the dialectical method, analysis and synthesis, induction and deduction, proof and refutation, comparison, generalization. As a result of the study, the problematic aspects of concluding agreements in the field of PPP were analyzed. In particular, it was concluded that today, despite the legal basis for the implementation of PPP, the implementation of such projects has some problems that are manifested in both legal and organizational areas. One of the problems is the greater role of the state partner in the implementation of PPP projects, which is manifested in the expanded scope of rights compared to the private partner (ownership of facilities created in the implementation of PPP projects), and, accordingly, lack of business interest in participation in projects not on mutually beneficial terms.

Public-Private Partnerships for Information Sharing in the Security Sector: What’s in It for Me?

There is little research on public-private information sharing partnerships within the security sector and the benefits it may bring to both sectors. This contribution uses insights from previous research on the benefits of public-private partnerships from organisational science, information management, innovation economics, and technology studies to examine whether they are also valid within the security sector. In a first phase, this analytical framework is used to screen insights from partners involved in triple-helix collaboration in the field of innovation, technology and security. In a second phase, in-depth interviews are conducted with public and private actors involved in setting up a pilot project where information exchange is central. The research results show that traditional benefits such as increased effectiveness, efficiency, improved relationships, creation of learning opportunities and obtaining a strategic, operational, and/or economic advantage that were found in other contexts are also confirmed in the security sector. In addition, Belgian security actors saw improved decision-making and service delivery, increased personnel safety and a more integrated security chain as potential benefits. Understanding these benefits may facilitate the design of future public-private partnerships in the security sector.

ANALYSIS OF THE FACTORS THAT DETERMINE THE FEATURES OF THE ORGANIZATION OF PUBLIC-PRIVATE PARTNERSHIP IN THE INNOVATION ACTIVITY OF UKRAINE

The objective of the article is to clarify the nature and benefits of public-private partnership and analysis of factors influencing its organization and dissemination in innovation. The usefulness of introducing public-private partnership in the innovation sphere is due to the possibility of combining state regulation of innovation development with the potential of private business, which should be considered as a carrier of managerial, human, and financial capital. Society is interested in the organization of public-private partnership in innovation because the result of achieving its strategic goal would solve several socially important problems, which include employment growth, increasing real incomes, spreading innovation, and accelerating socioeconomic progress. Methodology. During the analysis, public-private partnership was considered as a complex open system with the use of systematic analysis methodology in the study, which allowed to emphasize certain aspects of the specific nature of its operation. Results. Public-private partnership in innovation is a form of relationship that arises between the public sector and private business on a medium- or long-term basis and involves the creation of innovation infrastructure, production, and distribution of innovation products on mutually beneficial terms, which is achieved by providing a specific form financing, the common interests of the participants and the distribution of possible risks between them. The organization of public-private partnership, especially in the field of innovation, is influenced by a significant number of factors among which it is useful to outline institutional, legislative, economic, internal, and external, direct, and indirect. The institutional factor determines the nature of institutional policy that affects public-private partnerships. Legislative factors provide for legal regulation of the establishment and further operation of public-private partnership in the field of innovation. The economic factors influencing the organization of public-private partnership include credit, tax (tax holidays, reduction of income tax rates, tax credit), investment and depreciation (reduction of depreciation, increase of depreciation rates) policy. Practical implications. As a result of the analysis, several benefits that both the public sector and private business receive from the spread of public-private partnerships in innovation are outlined. The reflection of institutional, legislative, economic, and other factors of the organization of public-private partnership will allow to consider their influence for the intensification of innovative activity as a basis for increasing the competitiveness of the national economy. Value/originality. The use of systematic analysis allowed to outline the main factors that contribute or conversely the spread of public-private partnership in innovation in Ukraine. Considering their action will minimize the negative manifestations and make full use of the positive aspects, which will be an important factor in enhancing innovative growth on the basis of public-private partnership. Economic and other factors of public-private partnership will allow to take into account their impact to enhance innovation as a basis for increasing the competitiveness of the national economy.

PUBLIC-PRIVATE PARTNERSHIP AS A MECHANISM OF STRUCTURAL TRANSFORMATIONS IN ECONOMY OF UKRAINE

The article provides an overview of the content of public-private partnership in terms of obtaining the expected socio-economic effects in the form of available public goods of appropriate quantity and quality, and outlines the goals of projects within this activity. It also outlines the principles, key success factors and benefits, as well as the structure and stages of selection of PPP projects. Key organizational and institutional elements of the formation and implementation of projects and programs at the regional level are also presented. In addition, the article describes the imperfections and inconsistencies of PPP regulations based on the legal analysis of Ukrainian legislation. At the same time, the article presents the factors that influence the effectiveness of public-private partnership and presents the most important measures that are used to measure this phenomenon. The criteria for PPP creation and development are described, as well as its principles and stages for choosing a private partner. Then the author presents an analysis of the dynamics and trends of joint projects in the framework of public-private partnership in Ukraine. The system of methods and tools used to investigate the effectiveness of PPP projects is explored. The benefits of public-private partnership are identified and the author tries to emphasize its social and economic importance at local and regional, national and international levels. External and internal factors of public-private partnership development have been analyzed, and on the basis of this the future prospects of this phenomenon have been reviewed. An important part of the article is the presentation of the characteristics of PPP models and forms, in particular the generalized structural and functional model of such a partnership. Secondly, the attributes of the design and economic environment that enhance the utility of public-private partnership are presented. Thus, it has been determined that PPP is one of the effective tools for the implementation of infrastructure projects by attracting extrabudgetary funding and their quality management of the private sector, becoming relevant in the framework of state policy. Keywords : public-private partnerships, structural transformations, infrastructure projects, institutional environment, methods of analysis, models.

Механізм розвитку інноваційного потенціалу аграрного сектору України в контексті забезпечення його економічної безпеки

Статтю присвячено дослідженню питань удосконалення механізму розвитку інноваційного потенціалу аграрного сектору України у напрямку забезпечення його економічної безпеки й обґрунтуванню відповідних стратегічних імперативів. Метою статті є дослідження науково-прикладних засад функціонування механізму формування та розвитку інноваційного потенціалу аграрного сектору України як напрямку забезпечення його економічної безпеки та підтримки лідерських позицій на міжнародному ринку агропромислової продукції.Наукова новизна. Запропоновано наукові положення щодо розробки механізму розвитку інноваційного потенціалу аграрного сектору з метою забезпечення його економічної безпеки, який включає впорядковану сукупність принципів, завдань, важелів, методів (економічних, адміністративних) та інструментів впливу на виконання цільової функції щодо задоволеності потреб суб’єктів у результатах використання інноваційного потенціалу галузі. Визначено стратегічні імперативи забезпечення розвитку інноваційного потенціалу аграрного сектору в Україні.Висновки. Однією з головних проблем сучасного аграрного сектору України, що потребує вирішення, є відсутність дієвого механізму розвитку інноваційного потенціалу, який дозволятиме здійснювати протидію можливим загрозам щодо забезпечення економічної безпеки, інноваційно-інвестиційної діяльності, використовувати наявний потенціал та в цілому підтримувати належний рівень продовольчої безпеки в Україні. Представлено структуру механізму формування та розвитку інноваційного потенціалу аграрного сектору, який є однією з ключових підсистем загальної системи державного регулювання, що включає сукупність методів (економічних, адміністративних), принципів, функцій, завдань, важелів та інструментів впливу на формування і розвиток інноваційного потенціалу в умовах глобалізації.Визначені стратегічні імперативи реалізації механізму формування та розвитку інноваційного потенціалу аграрного сектору в Україні: розробка стратегії інноваційного розвитку аграрного сектору на засадах ефективності використання наявного інноваційного потенціалу; модернізація сировинної складової; структурна переорієнтація для впровадження органічного виробництва; використання інвестиційних стимулів для підтримки інноваційного потенціалу аграрного сектору; використання переваг державно-приватного партнерства у контексті формування та реалізації інноваційного потенціалу аграрного сектору та ін.

Aspiring Top Civil Servants’ Distrust in the Private Sector

Ce travail étudie les croyances envers le secteur privé des étudiants souhaitant intégrer la haute fonction publique en France. Pour ce faire, nous analysons les données d’un sondage réalisé à Sciences Po, grand établissement français connu pour former une grande partie des hauts fonctionnaires mais aussi des étudiants souhaitant travailler dans le secteur privé. Les résultats indiquent que les étudiants souhaitant travailler dans la fonction publique font preuve d’une plus grande méfiance envers le secteur privé (comparativement aux autres étudiants), pensent davantage que diriger une entreprise est aisé, et perçoivent significativement moins de bénéfices au recours à des partenariats public-privé. Ils déclarent également plus fréquemment que les travailleurs du secteur privé sont motivés par leurs intérêts propres. Ces résultats ont de fortes implications pour comprendre le niveau de la réglementation du secteur privé en France, ainsi que la coopération entre les secteurs public et privé.

Factors and “illusions” influencing the choice of PFI-type public private partnerships

PurposeThe purpose of this paper is to critically assess some of the micro- and macro-economic reasons for using public finance initiative types of public–private partnerships (PPPs) and how a lack of transparency may result in an “illusion” of making optimal, rational decisions related to them. A series of balances that decision makers need to make in order to choose whether or not to use PPPs are set out, as well as 15 potential “illusions” may affect such decisions.Design/methodology/approachThis paper synthesizes published evidence and develops a framework for analyzing PPPs.FindingsA wide range of factors influence the choice of PPPs, including: budget enlargement; efficiency and value for money; certainty of expenditure and delivery; flexibility; financing costs; risk sharing; procurement process and transaction costs; legacy and public assets; and the wider impacts on the local economy. However, reasons why PPPs can provide improved infrastructure and services may not be realised due to in-built incentives, behavioural biases and implementation shortcomings. Necessary support for PPPs includes strong, robust and transparent regulatory and governance systems, the dissemination of good practice to all partners, consideration of alternative funding models and high-quality advice and training.Research limitations/implicationsThe paper sets out a number of reasons for using PPPs, and also assesses potential drawbacks and identifies areas where greater research is required. A number of potential “illusions” are identified, whereby decisions may be affected by factors not explicitly or transparently considered, hence giving the decision an “illusion” being rational.Practical implicationsPPPs are significantly influenced by the socio-economic, legal, legislative and financial system they are embedded in. A clear process for approving projects and recognising all the costs and benefits of PPPs is needed, including developing criteria and instruments to measure each phase of a PPP and its overall value added to the economy and society over its lifetime. Full transparency, having suitable support and explicitly taking account of potential “illusions” affecting decisions, could lead to different decisions, including the decision not to progress the project or to use alternative funding and development methods.Social implicationsDecisions on PPPs should be based on a clear and transparent long-term basis which includes the perspectives of the full range of stakeholders to help improve the appropriate operation and social sustainability of a PPP.Originality/valueThe paper sets out some key arguments for and against the use of PPPs in different circumstances, including why non-optimal decisions may be made.

ДЕРЖАВНО-ПРИВАТНЕ ПАРТНЕРСТВО ЯК МЕХАНІЗМ ПІДВИЩЕННЯ ЯКОСТІ ВИЩОЇ ОСВІТИ

The article analyzes public-private partnership as a mechanism for improving the quality of higher education. It was noted that today business is actively promoting the development of social investments in the field of higher education. The author draws attention to the fact that the main content of companies' social responsibility is their interaction with educational institutions, their structural units, educational and research teams, expanding the presence of companies both in the educational process itself and in governing bodies. If earlier the private sector was limited only to charitable assistance, sponsorship or simply donations, today it is focused on active participation in the life of a higher institution in its development, improving the material base, including within the framework of public-private partnerships. A characteristic feature of recent times is the creation of corporate universities, both in companies themselves and in institutions of higher education. It is noted that public-private partnership in the field of higher education is becoming a strategic alliance that regulates the integration interaction of participants: the state, companies, non-governmental organizations and higher educational institutions at different stages of the life cycle of educational services. The benefits of the state are transformed with the help of the mechanism of publicprivate partnership, it turns out to be in the development of the commercial sector for the supply of public goods to improve the quality and innovation of educational services. For the private sector, the benefits of public-private partnerships are manifested in the development of a "public" component in the supply of private goods based on corporate social responsibility, the ability to assess and attract knowledge to a specific business, concerns higher education institutions, then the benefits of public-private partnerships are manifested in extra-budgetary financing the educational process, bringing the effectiveness of educational services and scientific development to the commercial level of implementation in order to obtain new competitive advantages in educational services, as well as public-private partnership can be considered as a tool for solving such problems of modern higher education as; pooling and raising funds to improve the quality of educational programs. It has been proved that the mechanisms of public-private partnership in the foreseeable future can become one of the main directions of financing the development of infrastructure and campuses of higher education institutions.

Assessing the Economic Potential of Public-Private Partnerships (PPPs): An Ex-ante Cost-Benefit Analysis for Agricultural R&D in Southern Philippines

With the growing emphasis on reducing costs within the government, it is increasingly important for public research institutions to adopt more cost effective approaches for the provision of public services, while at the same time aiming to enhance the use of innovations and research outputs to reduce poverty and improve the livelihoods of more people. Public-private partnerships in agricultural R&D have been recognized as an effective method to address these issues. This paper has examined the cost and benefits of public-private partnerships (PPPs) in agricultural research and development. With the assumptions on the benefits of PPP based on literatures and case studies reviewed, the results of the cost-benefits analysis suggest positively higher returns to the investment in collaborative research (With PPP) when compared with non-collaborative research (Without PPP). The technology adoption scenarios have also shown that the estimates of the increase of adoption rates and the earlier adoption expectation are highly relevant and significant for getting a higher return on the investment. The analysis concludes that the inclusion of the private sector in public research and development initiatives in agricultural R&D can generate higher welfare benefits that have the potential to provide positive net benefits and bigger impact for the agencies working in the research partnerships.

Financing Development Through Public Private Partnerships (PPPs) in Botswana

Largely due to chronic fiscal stress since the recent global economic crisis, there are calls for alternative ways of financing economic development. Public Private Partnerships (PPPs) have been identified as such alternatives. There is an increasing awareness that the private sector is not a competitor but a strategic partner in the drive for economic development. Therefore, governments are leveraging on the benefits of PPPs. Using the case study of Botswana, which is experiencing revenue challenges as diamonds have not been selling well since 2008, this theoretical paper explores the possibility of using more PPPs to finance economic development. Grounded in interpretivist research methodology, using the survey research strategy and using secondary data sources in the form of a desk survey, it concluded that there is a case for the increased use PPPs to finance economic development. It further concluded that while there is demonstrated appetite for PPPs, to date, only a few projects have been procured through PPPs. Hence, moving forward, and given the deteriorating revenue situation, there is a need to use more PPPs to deliver economic development. Finally, the paper argues that there is a need to reform the current PPP legal-institutional architecture and bench-mark and peer-learn from best PPP practices in Africa such as South Africa and Nigeria and beyond.

Public-private Partnership and Smart Growth — Principles, Challenges, and Mechanisms for Effective Action

The term smart growth is not new, but in the context of public-private partnerships, it gains a new meaning for social development, creation of a favorable environment for actions and successful entrepreneurial thinking. Essentially, smart growth combines a well-functioning educational system, medical and transport infrastructure, energy sector, etc. The triangle of knowledge and the triple helix (universities, government policies and business environment) can successfully be implemented in these sectors.PPP presents all favorable conditions for smart growth and forms a circle of organizational measures and scalable models of interaction. In order for any society to prosper, quality and effective educational environment are needed, as well as new knowledge and innovations that enhance the quality of life. Smart growth plays a significant part of the development of any economy and social environment. Why is PPP the basis for this growth? What is included and what are the benefits of public-private partnerships? The answer to these questions can be found in the interpretation of the partnership as a whole. It is used in the concept of “inclusive growth” as part of “inclusive business”, “cross-sectoral partnership”, a partnership for continuous development, etc. This study aims to find the factors that will ensure sustainable development and functioning of the PPP in support of smart growth. The barriers to this desirable interaction and possible ways to minimize them will be examined.

Yes Bank: bringing sustainability in agriculture through Public-Private Partnerships (PPPs)

Structured abstract Subject Area: Strategy – dealing with a particular type of strategic alliance (Public Private Partnership) as a strategy to enter a new business segment. Study level/applicability MBA and other similar programs at the postgraduation level. Case overview The current case deals with Yes Bank, one of the largest private sector banks in India. The main objective of the case is to help the students to understand the banking industry, and the structure and implementation of Public–Private Partnership (PPP) at a large Indian Bank. The case also intends to highlight the cost and revenue drivers for a particular industry. Yes Bank is contemplating entering into the Indian Agricultural financing sector that has huge potential. The case describes how to analyze the sector using Porter's five force model. Also, there are several modes of entering the sector, including joint-ventures, mergers, direct investments and PPPs. The case describes the benefits and issues associated with each of the mentioned strategies. Further, the case also describes the challenges and benefits of PPPs as a mode of generating growth opportunities. Expected learning outcomes The case can be a part of a banking course as well as a strategy course. The current case allows the students to make decisions while dealing with situations pertaining to sustainable development and implementation of PPPs. The major expected learning outcomes of the current case are: to be able to understand industry structure, using the banking sector as an example; to be able to list down the revenue and cost drivers for Indian banks; to be able to identify investment drivers for a particular industry, such as agriculture; to be able to analyze the agricultural financing industry using the Porter's five force model; to be able to analyze different modes of entering a new sector and the challenges associated with each one of them; and to be able to comprehend the role of PPPs in entering new areas of business. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Expanding the Market for Infrastructure Public-Private Partnerships: Alternative Risk and Profit Sharing Approaches to Align Sponsor and Investor Interests

Realizing the potential taxpayer benefits of public-private partnerships (PPPs) in infrastructure investment, including higher quality per dollar and faster project delivery, depends on allocating project risks to the party best able to manage them. Arguably, demand risk is the most important source of uncertainty affecting an infrastructure project’s financial viability, particularly in the case of new build, or “greenfield” projects in which the private partner’s compensation is determined by user volume, but for which no history of use exists. PPPs have typically used the basic user fee or availability payments models to allocate all demand risk and (therefore revenue risk) to either the private partner or the government, limiting the number of PPP deals that investors and project sponsors may find attractive. However, recent deals have migrated away from the basic user fee arrangement after several prominent PPPs using it encountered financial difficulty.This paper presents three alternative incentive structures for PPP contracts that can potentially benefit both public sector sponsors, by delivering higher quality per dollar, and private investors, by generating attractive returns. The rate of return model, price cap model, and “sharing” model all apply principles from the regulation of privately-owned energy and telecom infrastructure to PPP projects that generate user fees. In addition, these alternative risk- and profit-sharing approaches may create choices that are attractive to investors and sponsors with risk preferences and return expectations not accommodated by more commonly used models. By expanding the options for sponsors and investors to consider in PPP negotiations, these incentive structures have the potential to increase the number of PPP deals and improve the odds of the projects’ long-term success.

Preface: building trust in agricultural biotechnology partnerships

The 2011 famine in the Horn of Africa and the spectre of food price volatility have led to renewed interest in boosting local agricultural production in Africa. The surge in interest is occurring at a time when the impact of climate change on agriculture is becoming a central theme in policy discourse. These trends are inspiring the need to foster agricultural research as a way to raise productivity, diversify production and protect the environment [1]. It is widely held that long-term strategies to boost African agriculture will have to include the application of biotechnology. However, policy discussions on the role of biotechnology in African agriculture are marked by widespread distrust. The main sources of the distrust include concerns over the safety of genetically modified organisms (GMOs), fear of corporate control of the food sector, and uncertainty over the workings of publicprivate partnerships (PPPs). The collection of papers in this special issue sheds light on why establishing trust among business, government, research institutions and the public is central to efforts to introduce agricultural biotechnology. The authors of these papers draw from experiences in Burkina Faso, Egypt, Kenya, Nigeria, South Africa, Tanzania, and Uganda to provide lessons for building effective partnerships based on trust. In addition, the papers contain real-life examples that show which PPPs have worked well, what undermined their evolution, and how their lessons could be shared to inform policy decisions and practical actions. The papers are being published at a critical moment in the evolution of African agriculture. First, the continent is currently considering ways to become an important player in global agricultural production. The strategies being pursued by most countries in Africa include consideration of the role of agricultural biotechnology. By 2011, only three African countries (Burkina Faso, South Africa and Egypt) were commercially producing genetically modified (GM) crops. Recent decisions in Kenya to adopt a law that would approve the cultivation of GM crops, for example, were accompanied by extensive debates that underscored the importance of building trust in the technology. Second, discussions over the introduction of GM crops are occurring in the context of broader interest among African countries to put science and technology at the center of their development strategies. Much of this interest has been inspired by the dramatic benefits that mobile phones have brought to the continent. Two decades ago, mobile phones were viewed with the same suspicion and concerns over trust in related information technologies; such automation raised concerns over their implications for employment. The evolution of mobile technology in Africa now serves as a reference point in balancing between the benefits and risks of new technologies. These lessons are likely to lead to discussion on agricultural biotechnology. Third, there is an increase in the number of PPPs seeking to foster the adoption of agricultural biotechnology. Those involved in these partnerships are seeking ways by which they can address the general anxiety arising from uncertainty over the structure, performance and benefits of PPPs. These actors will find valuable lessons in these papers on how to address such concerns. These articles differ from much of the material available today in several important ways. First, they open the door for exploring the theoretical and practical implications of focusing on trust as a way to build confidence in new technologies. Second, they provide inspirational practical examples in each of the countries and institutions analyzed. Finally, they will be invaluable to a wider audience, including policy makers; donors; entrepreneurs; researchers; investors; and students of agricultural policy.

The diffusion of risks in public private partnership contracts

PurposeThe UK government argues that the benefits of public private partnership (PPP) in delivering public infrastructure stem from transferring risks to the private sector within a structure in which financiers put their own capital at risk, and the performance‐based payment mechanism, reinforced by the due diligence requirements imposed by the lenders financing the projects. Prior studies of risk in PPPs have investigated “what” risks are allocated and to “whom”, that is to the public or the private sector. The purpose of this study is to examine “how” and “why” PPP risks are diffused by their financiers.Design/methodology/approachThis study focuses on the financial structure of PPPs and on their financiers. Empirical evidence comes from interviews conducted with equity and debt financiers.FindingsThe findings show that the financial structure of the deals generates risk aversion in both debt and equity financiers and that the need to attract affordable finance leads to risk diffusion through a network of companies using various means that include contractual mitigation through insurance, performance support guarantees, interest rate swaps and inflation hedges. Because of the complexity this process generates, both procurers and suppliers need expensive expert advice. The risk aversion and diffusion and the consequent need for advice add cost to the projects, impacting on the government's economic argument for risk transfer.Originality/valueThe expectation inherent in PPP is that the private sector will better manage those risks allocated to it and because private capital is at risk, financiers will perform due diligence with the ultimate outcome that only viable projects will proceed. This paper presents empirical evidence that raises questions about these expectations.

Public-Private Partnerships for Infrastructure Delivery

Important alternatives have developed to augment traditional modes of creating and supporting infrastructure by public financing overseen by public authorities. One of these is the public_private partnership (PPP) which joins a government agency with a private project-based legal entity to finance, design, operate and maintain a facility for use by the public. PPPs are defined and differentiated from other types of project governance arrangements. Several of their subtypes are described and a brief history provided of the changing pattern of connections linking public and private entities in the provision of public infrastructure. Some of the most common myths and misconceptions characterizing the costs and benefits of PPPs are identified and discussed. The chapter concludes with a set of recommendations regarding how this form can be more productively employed in developing infrastructure projects in the United States.

Rhetoric and Reality of Public–Private Partnerships: Learning Points from the Australian Experience

While public–private partnerships (PPPs) have lately come to be seen as an attractive vehicle to deliver public services, in academic circles, opinions remain divided about their impacts and performance. While the proponents strongly justify PPPs by citing a range of benefits, including enhanced efficiency, cost savings, risk transfer, and value for money, the critics tend to dismiss such assertions and label PPPs as risky and wasteful ventures that eventually lead to much higher costs. Thus, PPPs have been the source of an intense debate and controversy. This article is a contribution to this debate. Based on a review of two leading PPP projects in Australia, it argues that although PPPs may help achieve some short-term objectives, their overall performance falls short of expectations and declared objectives. The article shows that the benefits of PPPs are often exaggerated, that the projected risk transfer is incomplete or unrealistic given the long term nature of projects, and that the contract documents governing the relationships between parties are unable to capture all risks and uncertainties. Finally, it argues that there is a need to augment capacity and skills on both sides, and to undertake a far more careful and considered assessment of the costs, benefits and risks of PPPs.

Public-Private Partnerships In Spain: Lessons And Opportunities

Public-Private Partnerships (PPP), a marriage between public- and private-sector activity, have been employed for almost two decades as a third way to optimize the use of public funds and boost the quality of services traditionally provided by the public sector. Their use has spread from the United Kingdom to Europe and beyond, and has expanded from the transport sector to innovative projects in health, education and others. In Spain, successive governments have seized on PPPs as a solution to budget constraints at a time of dwindling EU aid and stricter fiscal targets. As a result, the use of PPPs at all levels of government has exploded since 2003 and most recently culminated in a major infrastructure plan which relies on the private sector for 40% of its total investment. Undoubtedly, this trend will bring benefits to the Spanish population in terms of more abundant, lower-cost and higher-quality services. However, there are risks implicit in the way PPP is unfolding in Spain that could limit and even undo these benefits unless steps are taken to coordinate, monitor and follow up public-private projects and to communicate their virtues to the public. Spain presents an interesting paradox in the history of PPP. While it is one of Europes oldest, most active and most enthusiastic users of PPP, it is at the same time one of the countries that has demonstrated least interest at an official level in informing, monitoring, regulating and following up projects to ensure that their deepest benefits are being achieved. Relying on PPP only for private financing entails a risk that the benefits of PPP will not be realized and public services will actually become more expensive and less satisfactory over the medium and long term. The Spanish government is advised to take steps similar to those taken in the United Kingdom, to ensure that PPP is managed correctly and hence becomes an asset and not a liability to Spanish citizens.