In deciding whether to use a PPP or other contractual model to fulfill a particular governmental function, policymakers and planners must carefully consider a range of factors. These same factors should guide the monitoring of a PPP or contract once launched, for the government remains ultimately responsible for serving the needs of its citizens and must be vigilant in assuring that the private partner is meeting its obligations. A number of factors have been identified for consideration whether a contract with a private sector entity offers the most efficient form of service delivery, including:

• Cost -- these measures assess development and operating costs, compared to public sector equivalents;
• Risk -- these measures involve cost of operations and management and ensuring the best value to the public, while shifting the risk to the private partner;
• Incentives -- these metrics involve setting and achieving long-term performance objectives;
• Accountability; and
• Financing -- a comparative assessment of the cost of financing the project.

See European Commission, Guidelines for Successful Public – Private Partnerships (2003) pp. 14-16.

<<Previous: Important Considerations for PPPs and Other Contracts

Next: Policy and Regulatory Environment for PPPs and Service Contracts>>

Back to Beginning of Chapter