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Other Arrangements with the Private Sector
Contracted Services
In many ways, PPPs are just a more sophisticated form of contracting or service procurement. Without using the term “PPP,” governments enter into many different kinds of contracts with private sector entities to provide various resources and services, including components of an e-Government program. The models include:
In many ways, PPPs are just a more sophisticated form of contracting or service procurement. Without using the term “PPP,” governments enter into many different kinds of contracts with private sector entities to provide various resources and services, including components of an e-Government program. The models include:
- Operation and Maintenance: A public partner (national, provincial, regional, local government or authority) contracts with a private partner to provide and/or maintain a specific service. Under this option, the public partner retains ownership and overall management of the public facility or system.
- Operation, Maintenance and Management: A public partner contracts with a private partner to operate, maintain and manage a facility or system that could provide a public service. Under this contract option, the public partner retains ownership of the public facility or system, but the private party may invest its own capital in the entity. Any private investment is carefully calculated in relation to its contributions to operational efficiencies and savings over the term of the contract. Generally, the longer the contract term, the greater the opportunity for increased private investment because there is more time available in which to recoup the investment and earn a reasonable return.