Definition: A public–private partnership (PPP) is a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. These schemes are sometimes referred to as PPP, P3 or P3 . Public Private Partnership refers to involvement of private enterprises in the form of management expertise or financial contributions in government projects meant for public benefits.
Features of Public Private Partnership
(a) Contractual Relationship: PPP is a contractual relationship between the government and the private sector organization in which the responsibility for implementing a project meant for public benefits or running is given to the private sector. The contract is usually for a specified ** which is mutually agreed between the two partners.
(b) Specific Project: PPP is confined to a specific project. This project may be one of the following types: contract for providing a particular service or asset to the public, for example to keep a city clean, operation and maintenance of electricity generation and supply system , operation and management contract for constructing a bridge and collecting bridge toll tax. Some of the commonly adopted forms of PPPs include management contracts, build-operate-transfer (BOT) and its variants, build-lease-transfer (BLT), design-build-operate-transfer (DBOT), operate-maintain-transfer (OMT), etc.
(c) Choice of partner by the Government: Government has the sole right to choose the partner to whom the contract may be given. For choosing the partner, the government may adopt any one of the following methods; competitive bidding or negotiations with suitable organizations and selecting the most suitable.
(d) Payment Mechanism: The government may pay to the private sector in alternative ways: contractual payment for implementing the project, grants in aid to cover a part of the project cost or giving right to the partner to levy charges on users of the facility created.
