What are advantages of PPP?

It is increasingly clear that governments cannot meet the constantly growing demand for services by acting on their own, and that there is a need to look for support from other sectors of society. Government revenues are usually not sufficient to meet spending demands. Partnerships can provide a continued or improved level of service at reduced costs. By developing partnerships with private-sector entities, governments can maintain quality services despite budget limitations.

Public-private partnership is one of the most promising forms of such collaboration. It is based on the recognition that both public and private sectors can benefit from pooling their financial resources, know-how and expertise to improve the delivery of basic services to all citizens.

If properly designed and implemented, PPPs can bring real benefits in terms of helping governments to finance infrastructure investment in a more efficient way, freeing up scarce resources to allocate them to other national spending priorities.

The advantages of PPP in a competitive environment are considered as follows:

  • to remove the responsibility of funding the investment from the government´s balance sheet;

  • to introduce competition;

  • to adopt managerial practices and experience of the private sector;

  • to restructure public sector service by embracing private sector capital and practices;

  • to achieve greater efficiency than traditional methods of providing public services.

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Contact person:
Tina Igličar