PPPs have been highly controversial as financial instruments, mainly due to the fear that the return on public investment will be lower than the return on investment for the private lender. PPPs are closely linked to concepts such as privatization and the provision of public services. [1] [6] The lack of a common understanding of what a PPP is and the secrecy of its financial details make the process of assessing the success of PPPs complex. [7] Proponents of P3 emphasize risk sharing and the development of innovation,[7] while critics denounce its higher costs and liability issues. [8] For example, the cost-benefit and effectiveness outcomes of PPPs are mixed and often incomplete. [9] There are many factors for PPPs[2][43]. Proponents argue that PPPs allow the public sector to leverage the expertise and efficiency that the private sector can bring to the provision of certain facilities and services traditionally purchased and provided by the public sector. [44] Critics argue that PPPs are part of an ideological agenda to privatize public services for the benefit of private companies. [8] Public-private partnerships also carry risks from the point of view of the public and taxpayers. Private operators` partnership with the government can prevent them from being accountable to users of public services because they cut too many corners, provide inferior services, or even violate people`s civil or constitutional rights. At the same time, the private partner may be able to increase tolls, tariffs and fees for related consumers who may be forced by law or by a geographical monopoly to pay for their services. BOT (Build-Operate-Transfer), BOOT (Build-Own-Operate-Transfer), BTO (Build-to-Order), ROT (Rehabilitate-Operate-Transfer) and similar terms Governments have used such a mix of public and private efforts throughout history.
[15] [16] Muhammad Ali of Egypt used “concessions” in the early 1800s to obtain public works at minimal cost, while concession companies made most of the profits from projects such as railways and dams. [17] Much of the early infrastructure in the United States was built through public-private partnerships. Although there is no formal consensus on a definition, the term has been defined by large companies. Contract management is a crucial factor in the provision of joint services,[57] and services that are more difficult to monitor or fully record in the language of the contract often remain under municipal control. In the 2007 survey of U.S. city executives, hospital operation and management were ranked as the most difficult service and the least difficult cleaning of roads and parking lots. The study found that municipalities often do not adequately monitor cooperation agreements or other forms of service delivery: “In 2002, for example, only 47.3% of managers who dealt with private companies as procurement partners reported that they evaluated this service delivery. By 2007, that figure had fallen to 45.4 per cent.
Performance monitoring is a general concern of these investigations and the scientific critique of these arrangements. [13] [14] This term is used in Civil Code countries to refer to a supply option for buildings/facilities. PPP (APP in Latin America) – as a legally defined term rather than as a concept, leases are more commonly seen in types of operation and maintenance contracts based on existing infrastructure (i.e. without tangible capital requirements) and are generally applied to user-paid PPPs (including asset monetization structures). In some countries, the term “leasing” may be reserved for project contracts where the government remains responsible for capital expenditures and the private partner is only responsible for normal maintenance and operation. Cost-benefit assessment procedures were incorporated into the PFI and its Australian and Canadian counterparts from the late 1990s and early 2000s. [8]:Chapter 4A 2012 study showed that the value-for-money framework as an effective method of evaluating PPP proposals was still insufficient. [45] The problem is that it is not clear what the catchy term “value for money” means in practice and in technical detail. A Scottish listener once called it a “technocratic mumbo-jumbo”. [8]:Chapter 4 Research has shown that, on average, governments pay more for PPP projects than for traditional publicly funded projects. [45] [46] These higher P3 costs are attributed to these systemic factors: although PPPs are an old phenomenon, they were not seriously studied by scientists until the late 1980s, when they were used in public administration and management in both developed and developing countries. PPPs have been the subject of political controversy and scientific debate, including the advantages and disadvantages of PPPs compared to traditional government services and the nature of the partnerships they generate.
One form of P3 that has taken hold in U.S. cities in the 21st century is asset monetization agreements. They affect a city`s revenue-generating assets (parking lots, garages and meters, street lighting, toll roads, etc.) and convert them into financial assets that the city can lease to a private company in exchange for operation and maintenance. These transactions are usually conducted during periods of financial hardship for the city, and the immediate revenues that communities receive in these stores are used to pay off debt or fill budget gaps. Detroit`s bankruptcy in 2014 included numerous asset monetization agreements of this type. [84] For the purposes of this PPP Certification Guide, all nomenclatures listed here are synonymous with a PPP with private financing. Concession is a traditional legal term of the Civil Code. A concession is essentially the legal title or institution that, in an administrative jurisdiction, authorizes the government to transfer economic rights of use of a public property to a private partner.
Some jurisdictions refer to the types of contracts by describing the functions assigned to the private party by the contract or by using acronyms for these descriptions. For example, a contract can be described as a design, construction, financial, operation and maintenance contract or DBFOM. Infrastructure PPPs can be understood at five different levels: as a particular project or activity, as a form of project implementation, as an explanation of government policy, as an instrument of government, or as a broader cultural phenomenon. [7] Different disciplines often focus on different aspects of PPP phenomena. [7] Engineering and economics mainly focus on utilitarian and functional aspects such as overall cost and quality of projects compared to traditional methods of execution of large infrastructure projects. In contrast, public administrations and political scientists tend to view PPPs more as a political brand and a tool for governments to achieve their goals. [28] Sometimes (p.B. when the term DBFO is used), the “maintain” function is considered implicit in transactions.
Similarly, for contracts without transactions in the narrow sense of the term (interface with users, including collection of royalties), the “operation” O is sometimes omitted. Public-private partnership (PPP), a partnership between a government agency and the private sector in the provision of goods or services to the public. The policy areas in which public-private partnerships (PPPs) have been implemented include a wide range of social services, public transport and environmental and waste management services. This term refers to PPPs where the government controls the PPP company and usually holds the majority of the shares. Public-private partnerships involve collaboration between a government agency and a private sector company that can be used to finance, build and operate projects such as public transport networks, parks and convention centres. Funding a project through a public-private partnership can allow a project to be completed earlier or make it possible in the first place. Public-private partnerships often involve concessions on taxes or other operating revenues, protection against liability or partial ownership of nominally public services, and ownership of private for-profit entities. The World Bank Group helps low- and middle-income countries develop public-private countries. Although PPPs were launched in First World countries, they immediately received a lot of attention in countries in transition, as they promised to open up new sources of financing for infrastructure projects that could result in jobs and growth. However, the lack of guarantees for investors` rights, trade secret laws, special public expenditures for public infrastructure and the possibility of basic food receipts from user fees have made it difficult to implement public-private partnerships in countries in transition. .
