Sample Material of Current Public Administration Magazine
Public Private Partnerships
Different Types of Public Private Partnerships
Public private partnerships or P3s can best be described as the
future of infrastructure projects. Viable alternatives for promoting better
infrastructures using just a small amount of money from local governments were
sought and studied during the construction crisis. Public private partnerships
can provide a solution to problems of financing, job completion, and investing
in large projects without sacrificing government finances.
There are several types of public private partnerships. They
depend on the needs, the options available, and the size of the project being
considered. Power generator projects and infrastructure projects appear to be
options that are best suited to public private partnerships.
Operation and Maintenance P3s
The private component of the partnership operates and maintains
installation of the project, while the public agency acts as the owner of the
The public component of the partnership acts as a contracting
officer. It looks for funding and has overall control of the project and its
The private partner designs and builds the facility while the
public partner provides the funds for the project. The public partner has
control over possession of the project and assets generated.
The private partner designs, builds, and operates the facility
or project. The public partner acts as the owner of the installation and gets
the funds for construction and operation.
The private partner designs, builds, and operates the project
for a limited time, then the facility is transferred to the public partner.
The private sector provides financing and design, then builds,
possesses, and operates the project. The public partner only provides funding
while the project is being used or is active.
The private partner builds and transfers the project to the
corresponding public partner. The public partner then leases operation of the
facility to the private sector under a long-term lease agreement.
The public partner builds, possesses and operates the project
for a limited time until the installation is transferred, free of charge and
including ownership, to the public agency.
The private sector must build, possess, and operate the facility
and has control over profits and losses generated by the facility through time.
This is similar to a privatization process.
The public owner leases the facility to a private firm. The
private company must operate and provide maintenance for the facility per
specified terms, including additions or a remodeling process.
The public agency partners with a private company, conceding all
exclusive rights to operate and maintain the facility for a specific period of
time under certain contract terms. The public partner has power over the
ownership, but the private partner possesses owner rights over any addition
incurred while it's being operated under its domain.
The public partner makes a complete or partial transference of
the installation to the private sector. The government might include specific
clauses in the sales agreement requiring investment and modernizations of the
facility and a continuation of the services being provided.
The World is Moving into P3
With limited funding and increasing constraints, many government
agencies are looking into different models of P3s as a way of maintaining
updated infrastructures without having to make large investments. These type of
projects can be very useful, but their costs must be closely controlled to make
them cost-effective solutions.
Source – The Balance
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