PUBLIC-PRIVATE PARTNERSHIPS

Public-Private Partnerships across Multiple Countries

Public-Private Partnerships across Multiple Countries

Public-Private Partnership

Public-private partnerships (PPPs) are contracts or formalized relationships between a public sector institution and a private sector institution, relating to the provision of public services or infrastructure. All PPPs involve the transfer of risk between the parties, through the transfer of ownership, control, financing, or operation of the service. In contrast to wholesale privatization, the responsibility for a PPP is shared between the private and the public sectors and regulated by the latter (Walzer & Jacobs 1998, pp.233).

There are significant national variations in the definition and practices of these partnerships, and their levels of formalization range from simple commercial contracts to the establishment of autonomous organizations with various degrees of authority. Countries as diverse as Canada, Ireland, and South Africa have set up governmental PPP units. PPP policies and models, such as the Public Finance Initiative in the United Kingdom and the build-operate-transfer model, which is well established in Australia and Asia, have gained popularity among policymakers and have, therefore, been imported and adapted by other states. Leading international financial institutions and development agencies, such as the United Nations and the World Bank, have shown strong support for PPPs as a strategy for development and poverty reduction, and the private sector is now a central actor in public service delivery, in many developing countries (United Nations 2008, pp.1).

PPPs are, like privatization, subject to political contestation. Proponents of this model repeatedly claim that PPPs can bring in finances and resources otherwise unavailable to the public sector. It is also argued that PPPs represent “value for money,” as private sector business principles are more efficient and because PPP involves the transfer of risk to a private contractor. In contrast, opponents see the profit motive as unsuitable for the realm of public services, which is seen as constituted by the notion of Public need. It is held that private contractors can only make a profit on public services through wage and benefit cuts and the introduction of cost recovery as a pricing principle (Francis 2010, pp.1). Another criticism that has been raised is the effect of PPPs on public accountability and their perceived lack of democratic input. While proponents include “third-way” governments, business interests, and conservative political parties, the opposition to PPPs is often spearheaded by trade unions, social movements, and leftwing governmental organizations (Horan 2009, pp.1).

World-Wide Application of Public-Private Partnerships

PPPs in Canada

British Columbia, The Vancouver City, decided to create a public-private partnership, by bringing in partner from the private sector, to convert the toxic gases such as methane and other green house producing gases. Green house gases are a major reason behind increasing global warming. A PPP structure was approved, and the construction, financing and design of cogeneration plant were undertaken by the private sector. This land was using landfill gas as an input for energy production. The recovery process includes converting produced heat into hot water, which is then sold to a green house ...