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Introduction

There is no single, internationally accepted definition of Public-Private Partnership. This Reference Guide takes a broad view of what a PPP is, defining it as:

A long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility and remuneration is linked to performance.

This definition

  • Encompasses PPPs that provide for both new and existing assets and related services;
  • Includes PPPs in which the private party is paid entirely by service users, and those in which a government agency makes some or all payments;
  • Encompasses contracts in many sectors and for many services, provided there is a public interest in the provision of these services and the project involves long-life assets linked to the long term nature of the PPP contract.

The project functions transferred to the private party—such as design, construction, financing, operations, and maintenance—may vary from contract to contract, but in all cases the private party is accountable for project performance and bears significant risk and management responsibility. PPP contracts typically allocate each risk to the party that can best manage and handle it—risk transfer to the private party is not a goal, but is instrumental for full transfer of management responsibility and for the alignment of private interests with the public interest. What is a PPP: Defining "Public-Private Partnership" provides more information on the range of contract types that constitute PPPs under this definition and the different nomenclature used to describe them.

Throughout this Reference Guide, the term “infrastructure” is used to cover the range of sectors and services for which PPPs are used. In this context, “infrastructure” encompasses economic, social, and government infrastructure—that is, the “basic physical and organizational structures” needed to make economic, social, and government activity possible (using the Oxford English Dictionary definition). How PPPs Are Used: Sectors and Services further describes the range of sectors and services for which PPPs are used.

At a minimum, a PPP will include a long-term commitment to provide infrastructure services—this implies the design and construction of infrastructure, or the renewal of existing assets, and the provision of long-term asset-maintenance. Most PPPs include additional services, including the full operation of the infrastructure when the private operator is able to commit to service quality and performance, and the procuring authority is able to define that same quality and performance. These additional services should also take place over the long term.

Practitioners can, if their projects are well-selected and their PPPs carefully structured, design and implement projects that optimize cost effectiveness and social well-being by aligning private partner profit objectives with public sector service objectives that support the public interest.

A substantial body of knowledge on Public-Private Partnerships (PPPs) has been generated across the world by a broad spectrum of practitioners from government, the private sector, international development institutions, academia, and expert advisors. This Reference Guide helps readers navigate this body of knowledge. It introduces key topics on PPP, sets out options, and directs readers to examples and references where they can learn more.

What is in the Reference Guide

The Reference Guide is divided into three modules:

  • Module 1: PPP Basics—What and Why? Provides an overview of Public-Private Partnerships (PPPs)—what they are, how they are used to provide infrastructure assets and services, their benefits, and their pitfalls
  • Module 2: Establishing the PPP Framework. Describes the elements of a sound legal and institutional PPP framework—that is, the policy, processes, institutions, and rules that together define how PPPs will be identified and implemented, and that promote good governance of PPP programs
  • Module 3: Implementing PPP Projects. Provides guidance on each stage of developing and implementing a PPP project—from initially identifying candidate projects to managing PPP contracts through the project lifetime

Each module begins with an introduction, providing an overall framework for the module's content, and listing any helpful overview references. The modules are divided into sections, each covering a different topic.

PPP Reference Guide Modules and Who Should Read Them

Module

Who Should Read It?

Module 1:

PPP Basics: What and Why

  • Anyone who wants to learn more about what PPPs are, and how they can be used to provide infrastructure assets and services
  • PPP practitioners looking for material to help articulate the benefits and risks of a PPP program to stakeholders within and outside governments

Module 2:

Establishing the PPP Framework

  • Government officials in the process of, or considering, developing or refining the policy, legal, and institutional framework that governs how PPPs are implemented
  • Finance ministry officials or other stakeholders concerned about public financial management for PPP programs

Module 3:

PPP Cycle

  • Government officials responsible for developing or refining PPP processes
  • Those responsible for developing, assessing, or implementing PPP projects, or for engaging advisors to support the PPP process—including PPP practitioners looking for tips from global experience
  • Other stakeholders interested in learning more about how PPPs work

Using references

These references are highlighted in bold type, and followed, in parenthesis, by an author and a year, for example: ‘(Delmon 2016)’ or ‘(OECD 2015b)’, where ‘b’ differentiates between different works published in the same year by the same author. When convenient, a location within the reference will be added after a comma, such as (Delmon 2016, chapter 15). All references can be found in the Reference List. Clicking an in-text citation will route the reader to that source. 

Key references for each section will be listed at the end of the section and can alternatively be accessed through the right sidebar of each page. An example of a ‘key reference’ table is provided below. In some cases, the key reference tables are organized by subject area, within the overall topic. Readers who just want to quickly get a sense of the most important references on the topic can refer directly to these key reference tables.

Key References

Example