Public-Private Partnerships Defined A public-private partnership (P3) is a contractual arrangement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.
A broad view of what Public-Private Partnerships is:
A Long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility and remuneration is linked to performance. This definition
• Encompasses PPPs that provide for both new and existing assets and related services
• Includes PPPs in which the private party is paid entirely by service users, and those in which a government agency makes some or all payments
• Encompasses contracts in many sectors and for many services, provided there is a public interest in the provision of these services and the project involves long-life assets linked to the long term nature of the PPP contract.
Public – private partnerships Reference Guide, book version3, 2017, the World Bank publications.
European Commission (EC, 2004):
The term “public-private partnership”, in general, refers to forms of co-operation between public authorities and the world of business which aim to ensure the funding, construction, renovation, management and maintenance of an infrastructure of the provision of a service.
International Monetary Fund (Hemming & Staff team 2006, p. 1; Hemming, 2006, p. 3):
“Public-Private Partnerships (PPPs) refer to arrangements under which the private sector supplies infrastructure assets and infrastructure-based services that traditionally have been provided by the government. PPPs are used for a wide range of economic and social infrastructure projects, but they are mainly used to build and operate roads, bridges and tunnels, light rail networks, airports and air traffic control systems, prisons, water and sanitation plants, hospitals, schools, and public buildings”. “A typical PPP takes the form of a design-build-finance-operate (DBFO) scheme. Under such a scheme, the government specifies the services it wants the private sector to deliver, and then the private partner designs and builds an asset specifically for that purpose, finances its construction, and subsequently operates the asset (i.e., provides the services deriving from it).”
Organization for Economic Cooperation and Development (OECD, 2008, p. 12):
A PPP is defined as “an agreement between the government and one or more private partners (which may include the operators and the financers) according to which the private partners deliver the service in such a manner that the service delivery objectives of the government are aligned with the profit objectives of the private partners and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partners.” Despite many similarities between them, this OECD study also makes distinction between PPPs and concessions based on the amount of risk carried by the private provider and the main source of income of the private provider (i.e. user charges and fees paid by the government).
World Bank Institute (2012, p. 11):
A PPP is “a long-term contract between a private party and a government agency, for providing a public asset or service, in which the private party bears significant risk and management responsibility”.