In this chapter:

• Introduction to Public-Private Partnerships
  • Basic Resources: PPP Overviews
  • Reasons for Undertaking Public-Private Partnerships
  • PPP e-Government Case Studies
• Models of Public-Private Partnerships
  • Funding PPPs
• Other Arrangements with the Private Sector
  • Contracted Services
  • Outsourcing
• Important Considerations for PPPs and Other Contracts
  • Evaluation Factors for PPPs and Other Arrangements with the Private Sector
• Policy and Regulatory Environment for PPPs and Service Contracts
• Additional Resources on Public-Private Partnerships

In developing countries, governments face severe challenges in building infrastructure for the delivery of public services. These challenges may be met, in part, by turning to the private sector. While full privatization of certain government services (water, telecom) has been a practice for some time, a new form of collaboration between the public and private sectors has arisen in recent years: Public-Private Partnerships (PPPs).

As the International Monetary Fund points out “There is no clear agreement on what does and what does not constitute a PPP.” IMF, “Public-Private Partnerships” (March 2004). Basically, however, PPPs are contractual agreements between public agencies (national, regional, provincial, or local) and private companies to supply infrastructure assets or services that traditionally have been provided by governments. Further, in a true PPP, the private sector partner not only stands to profit from a successful project, it also assumes some of the risk of failure. (In contrast, under ordinary procurement contracts, the private sector vendor is likely to be paid whether the project is successful or not.)

When first conceived, PPPs were used mainly for physical infrastructure projects, such as prisons, hospitals, and power plants. As the need for modern communications systems has increased, PPPs have been developed around access to ICT resources. Quite recently, e-Government projects have been the subject of PPP initiatives.

A point of distinction: Many ICT development projects involve private support, but they are not true PPPs because there is no transfer of risk. To take just one example, Cisco Systems, through the World Economic Forum’s Global Education Initiative and other initiatives, has teamed with governments, school administrators, local and global companies, and NGOs around the world to develop curricula, train teachers, and provide IT infrastructure to schools in poor regions. To take another example, in Jamaica the Ministry of Education has established a program to improve the education and training system and to produce graduates with skills to meet the demands of the global economy. Cable and Wireless Jamaica Ltd, the national telephone operator, is a major sponsor of the project. See “Jamaican Education Launches Public-Private Partnership, International Institute for Communications and Development”. Some of these privately supported ICT development projects are covered in the Donor Guide accompanying this Toolkit, but they are not within the purview of this chapter.

Resources:

• PPP e-Government Case Studies
• Reasons for Undertaking Public-Private Partnerships

Next: Basic Resources: PPP Overviews>>