One of the newer concepts in public policy is the idea of the public-private partnership, or PPP. Essentially, PPPs are when the government works with private enterprise on a project. Public projects tend to be those that benefit society as a whole, and traditionally governments as representatives of the people have been the drivers of such projects. Private enterprise has often specifically avoided many types of projects because of the financial or operational risk involved. A public-private partnership is a form of development where government and private enterprise share the risk and capital expenditure in a project. The split will be different for every project, but it often involves the government taking on some risk in order to facilitate the project moving forward, on the principle that the project moving forward is in the best interests of the general public. In some instances, the government utilizes public-private partnerships to facilitate major infrastructure projects that the government does not want of finance alone, particularly if there is low appetite among the public for new debt (Sharma & Bindal, 2014).
Advantages & Disadvantages
In theory, a public-private partnership is a meeting of the minds with respect...
So the advantage for both parties is that the project goes forward. The government's interest is typically social in nature while the private enterprise interest is profit. The latter point is self-evident by definition of private enterprise, but for government there is often some question about whether it receives anything other than theoretical benefit. One theory is that if government finances an asset, it will be able to do so at a lower borrowing cost than private enterprise, but then the private partner will operate the asset, which in theory will be more efficient. Thus, the PPP will deliver economic efficiency while lowering the cost of capital (Nisar, 2007).
The main disadvantages lie in the governance, or at least the perception of governance, in PPPs. There are risks that the governance of a project is out of public hands, even while the public still bears some of the risk. Further, government can use a PPP to reframe a pet projects -- stadiums are popular -- in such a way that the public is exposed to risk without approving the risk. The PPP is therefore an end-around to public governance that government uses in order to ensure its projects move forward, the actions of government quite contrary to its rhetoric (Wettenhall, 2003).…
Public Private Comparator Public Sector Comparator (PSC) in the Public-private partnership (PPP) Process Increased global financial pressures have caused many government entities to cut costs in any way possible. One way is to outsource services or projects to private companies. However, when comparing costs, the public sector frequently bases its cost calculations for a project by omitting certain types of factors. These can include employee benefits, utilities, or total administrative costs. As
Private Security and Homeland Defense Most of the critical infrastructure in the United States is regulated by the public sector, but owned by the private sector. As a result, protection of U.S. critical infrastructure is a major challenge because of complexities in both the public and private sectors. Moreover, safeguarding critical infrastructure is complicated by the sophisticated and growing assortment of cybersecurity challenges (Brooks par, 2). Given the involvement of the
Public Private Police Relationship between private and public police Before discussing the relationship between private and public police it is important to understand what the terms policing, private space, and public space mean. Policing can be defined as the "preservation of peace, that is, to the maintenance of a way of doing things where persons and property are free from unwarranted interference so that people may go about doing their businesses normally"
Partnerships in Human Services There is a growing need to provide more efficient human services in the face of increasing demand which has steadily increased over the past 2 decades and which is projected to continue to increase for the foreseeable future (Radey & Wilkins, 2011; Samples, Carnochan and Austin, 2013). Partnerships between public and private organizations have demonstrated effectiveness in contributing to this goal, thereby making their effective implementation
The assessment becomes biased, especially when a PSC is compared to the PPP bid of a willing company. Moreover, if un-affordability and budgetary limits exclude traditional procurement, the project will not progress. This is the case when the submitted bids do not reflect value for money and there is no delivery. This situation and the strong desire to deliver may indicate an inclination to bias the PSC to make
If, on the other hand, the net present value of the public sector comparator is lower than the net present value of the public-private partnership, then the PPP is too expensive and ineffective and it does not represent the adequate solution for the provision of the public service (Grimsey and Lewis, 2007). The public sector comparator identifies the value of money for the project in the case in which it