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Private public partnership

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  • 1.  ‘softer’ alternative to the word ‘privatization’ enable private organizations to get a market share of public service provision. It seems fair to say that a number of governments have tried to avoid using the terms “privatization” and “contracting out” in favor of speaking about partnerships
  • 2. PPP ; definition:
  • 3.  a specific form of privatisation was developed to deal with limitations on public borrowing. This involved using a private company to borrow money, build a new hospital, school, road, etc, and then operate it over many years, recouping the investment and profit from payments
  • 4. 2 general Forms of PPP:
  • 5. Claims and myths about PPPs:
  • 6. evaluation
  • 7. Framework for evaluating PPP proposals against public sector alternative Evidence Note1 Cost of Capital Interest + dividends PPP more Private sector has to pay expensive higher interest rates than government2 Cost of PPP more Higher cost of ‘turnkey’ construction expensive projects, offset by saving on cost of overruns3 Cost of operation Efficiency Neutral Empirical evidence suggests no significant difference4 Transaction costs Preparation PPP more Costs of preparing contracts &tendering expensive & tenders5 Uncertainty Renegotiation & PPP more Future renegotiations & contingent liabilities risky changes

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