Public-private partnership, PPP
Public-private partnership, PPP, is a collective term for several different types of collaboration between public and private actors. Fundamentally, it is a procurement form with a long-term agreement between a public client and a private supplier.
The entrepreneur takes responsibility over a longer period.
The contractor takes overall responsibility for design, construction, operation, maintenance, and financing over a longer period. The contractor is also responsible for completing the project on time and within budget. It is a type of functional procurement focused on lifecycle delivery.
Based on external private financing
The OPS model differs from other forms of collaboration as it partly relies on external private financing. The external financing can constitute a larger or smaller part of the project's total cost and can come from the contractor, banks, or pension funds. External financing creates strong economic incentives for time-efficient deliveries because revenues to the contractor begin upon the project's completion when the benefit is delivered to the public client.
Owned by the public sector
The property or facility is continuously owned by the public sector. When the project is completed, the operation and maintenance responsibility is returned to the public sector, and the building or facility must be in the agreed condition to avoid maintenance debt. Assignments carried out through public-private partnership often have a long warranty period and are best suited for larger projects where the public sector will continue to own the property or facility, but where payment is spread out over time, similar to rent.
