What means PPP?

PPP (= Public-Private Partnership) refers to a long-term, contractually regulated cooperation between the public and private sector for the efficient fulfillment of public tasks in combining the necessary resources (e.g. know-how, operational funds, capital, personnel) of the partners and distribution existing project risks appropriately according to the risk management competence of the project partners which is carried out by using the conditions laid down by the law.

There is a great variety of definitions for PPP available worldwide. The contents and objectives may vary according to the country specific background and the specific interests of the individual author.

Additionally, there exist four main characteristics of PPP:

  1. efficiency gained through appropriate sharing of risks and responsibilities; the public sector retains mainly sovereign tasks and the private sector bears those for implementation;

  2. lifecycle and private investment as crucial elements of PPP´s incentive structures;

  3. long-term contractual relationship;

  4. innovation, in particular through output specification, servcice levels and payment mechanisms, as a new way of describing the services to be supplied.

One of the major objective of PPP is to transfer tasks and responsibility for the provision of infrastructure to the private sector, in order to gain efficiency, cos reliability and financial security.

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