From PFM Blog here is some excerpts on their primer on PPPs.
Though by no means a holistic definition, the primer briefly outlines public-private partnerships as being “arrangements in which the private sector supplies infrastructure assets and services traditionally provided by governments. Some authors add that the presence of external financing as a necessary condition; others focus specifically on design-build-finance-operate arrangements.”
The recent and sudden rise of public-private partnerships in the US is deceptive, as this approach to major infrastructure and capital intensive projects have existed for the last two decades in other areas of the world — with the financing primarily coming from Europe.
Developing countries, in particular, try to develop PPPs to address economic infrastructure bottlenecks. However, the trend is universal: a recent study of PPPs in Europe found that between 1990 and 2005, more than a thousand partnerships had been signed in the European Union alone, representing an investment of almost 200 billion euros.
The primer continues to summarize a framework over how to oversee PPPs to ensure that public assets are not recklessly placed under the supervision of private actors.
- PPPs should be limited to projects delivering greater Value for Money (VFM) than other forms of procurement.
- the contractibility of the quality of service,
- the transfer of a significant share of risks to the private sector,
- the presence of competition or incentive-based regulations,
- a sound institutional and legal framework,
- a sufficient level of technical expertise in the government, and, last but not least,
- the proper disclosure of PPP commitments, along with government guarantees, in government financial statements (and in debt-sustainability-analyses)
For the entire article, go here.