Public-private partnerships (PPPs) are agreements between governments and the private sector to provide public infrastructure and services, with private entities financing the projects and transferring assets back to the public sector at the contract's end. Governments consider PPPs for enhanced efficiency, technology integration, and local capability development while ensuring budgetary certainty and timely delivery. Successful PPPs demand political will, a clear framework, risk sharing, and project prioritization, although they come with potential disadvantages, such as higher costs and complex long-term agreements.

1. PUBLIC PRIVATE
PARTNERSHIP
SUBMITED BY:
Divyajit (Reg. No. 16351050)
Section A
Masters of Business Administration
Indian Institute of Tourism & Travel Management
Gwalior - 474011

2. Definition of PPP
• Public private partnerships (PPPs) are agreements between
government and the private sector for the purpose of providing
public infrastructure, community facilities and related services.
• The private sector enter into a contract with government for the
design, delivery, and operation of the facility or infrastructure and
the services provided.
• The private sector finance the capital investment and recover the
investment over the course of the contract.
• The asset transfers back to the public sector at the end of the
contract.

3. Why Should Governments Consider PPP?
Governments look to the private sector for other reasons:
• Exploring PPPs as a way of introducing private sector technology and
innovation in providing better public services through improved
operational efficiency.
• Incentivizing the private sector to deliver projects on time and within
budget
• Imposing budgetary certainty by setting present and the future costs
of infrastructure projects over time.
• Utilizing PPPs as a way of developing local private sector capabilities
through joint ventures with large international firms, as well as sub-
contracting opportunities for local firms in areas such as civil works,
electrical works, facilities management, security services, cleaning
services, maintenance services
• Using PPPs as a way of gradually exposing state owned enterprises
and government to increasing levels of private sector participation
(especially foreign) and structuring PPPs in a way so as to ensure
transfer of skills leading to national champions that can run their own
operations professionally and eventually export their competencies by
bidding for projects/ joint ventures

4. What makes a successful PPP?
• Political will
• Government commitment
• PPP Champion
• Clear output specification
• Appropriate risk sharing
• Value for money
• Performance management

5. Requirements of a Successful PPP Program
• Political commitment (continuity of policy)
• Enabling legislation (enabling legislation - concession laws,
tax anomalies)
• Expertise (capacity-building in both sectors)
• Project prioritization (focus to improve success rates)
• Deal flow and standardization (regularity of deals based on
standard contracts)

6. PPP Advantages
• the necessary investments into public sector and more effective
public resources management;
• Ensure higher quality and timely provision of public services;
• Mostly investment projects are implemented in due terms and do
not impose unforeseen public sectors extra expenditures;
• A private entity is granted the opportunity to obtain a long-term
remuneration;
• Private sector expertise and experience are utilized in PPP
projects implementation;
• Appropriate PPP project risks allocation enables to reduce the risk
management expenditures;
• In many cases assets designed under PPP agreements could be
classified off the public sector balance sheet.

7. PPP Disadvantages
• Infrastructure or services delivered could be more expensive;
• PPP project public sector payments obligations postponed for the
later periods can negatively reflect future public sector fiscal
indicators;
• PPP service procurement procedure is longer and more costly in
comparison with traditional public procurement;
• PPP project agreements are long-term, complicated and
comparatively inflexible because of impossibility to envisage and
evaluate all particular events that could influence the future activity.

8. Thank You  