features,types,Advantages,disadvanatges,public private process

1. INTRODUCTION
 In today’s world of complexity and rapid pace it is almost
impossible to do anything alone
 Due to rising price , changing pattern and increasing use of
sophisticated technology .

2. PUBLIC PRIVATE PARTNERSHIP
 Public : It generally refers to government or organization
functioning under state budget.
 Private: It refers to the profit/ non- governmental sector.
 Partnership: It’s a an agreement between two or more profits. It
reflects the mutual responsibilities of shared interests.

3. Agreement between government and the private sector
for the provision of a public good and service by the latter.
Its involves private financing , construction, and
management of key infrastructure etc.

4. FEATURES OF PUBLIC PRIVATE PARTNERSHIP
 Service- oriented : The PPP approach deals with the facilitation of long-term
public services. It includes roads for transportation, dams for electricity and
water supply and street lights for lighting.
 Innovation: With the involvement of the private firms, the PPP approach also
initiates the implications of creativity and new technology to the infrastructure
projects
 Participants: The two parties involved in the public-private alliance are; the
government and the respective private company.
 Risk Allocation: Infrastructure projects involve high risk; thus, PPP helps the
government to transfer this risk to private firms.
 Long-term Relationship: These projects are usually for years; therefore, the
government authority and the private entity remains associated for an
extended period.
 Resource Sharing: The capital, financial, design and other resources
required, are shared between the government and the firm for successful
project accomplished.

6. 1.Build-Operate-Transfer (BOT)The toll road construction projects are
illustrated under this conventional model. The private company construct
the road, collect toll or revenue (for the contract period) and then pass its
possession to the government.
2.Build-Own-Operate (BOO) It is though very similar to the BOT model;
here, the possession of the facility remains with the private entity itself.
3. Build-Own-Operate-Transfer (BOOT) To recover the cost of
construction and incur gains, the private firm, after development, keeps the
possession of the facility up to the contract period. After which it passes on
the ownership to the public sector.
4.Build-Lease-Operate-Transfer (BLOT)
The private company uses a leased public property to develop a facility. It
functions on this property for the lease period to recover cost and earn
revenue. Later as the lease expires, the land is handed over, back to the
government.
5.Design-Build (DB) This is the basic form of P3 where the private
company layouts and constructs the facility as per the government
requirements, after complete risk assessment. In return, it takes a fixed
amount as its charges.

7. 6.Design-Build-Finance (DBF)The private sector firm undertakes a
project to design the layout, build the facility and meet the capital cost
involved in such designing and construction.
7.Design-Build-Finance-Operate (DBFO)In the DBFO model, the private
company is responsible for planning the project layout, facility construction,
arranging the required capital and operating it till the grant period. The facility
operations revenue meets the cost incurred and generates profit to the
company.
8.Design-Build-Finance-Maintain (DBFM)This model can also be termed as a
management contract. Here, the public sector entity remains associated with the
project from the beginning to the end.
The process starts right from designing of the layout, to construction, funding
and lifetime maintenance of the facility. The firm either charges a fixed sum or
shares profit; also, it is involved in the project’s managerial decision making.
9.Design-Build-Finance-Maintain-Operate (DBFMO)
It is an extended version of DBFO. Here, the private firm prepares the blueprint,
builds up the facility, invest the required sum and carry out the operations to
generate revenue. Since the company undertakes the project for a long-term, it has
to take care of the maintenance work too.

8. 10.Design-Construct-Maintain-Finance (DCMF)
In the DCMF model, the private entity understands the government
specifications and accordingly designs, develops, upkeeps and invest in
a facility. This facility is then leased out to the government body itself.
11.Operation and Maintenance(O&M)
This model involves assigning of a sub-contract to the private companies
for running and up keeping a facility.

9. ADVANTAGES OF PUBLIC PRIVATE PARTNERSHIP
 Early Completion Bonus: To improve efficiency, the private companies are
motivated through bonus if they complete the project before time.
 Cut Downs Tax: The cost-efficient infrastructure projects help the
government to save funds and thus, provides for a reduction in the tax
rates.
 Project Completion Efficiency: When the standard time for completing a
project is estimated, its execution and fulfilment become more competent.
 Project Feasibility: As the project’s risk involvement and practical
implementation are well-analyzed, the chances of failure reduces
remarkably.
 Superior Quality Standards: PPP approach initiates benchmarking for the
desired quality of the project .
 Excellent Infrastructure Solutions: This has been possible since, the
proficient private companies work in collaboration with the government,
where each of them contributes their best.

10. •Better Return on Investment: The ROI of the P3
infrastructure projects might be reasonably high in the long
run. The reason being it has been monitored and
accomplished by both parties together.
•Transfer of Risk: The government hands over the associated
risk along with the project to the private firms who have
relevant experience and knowledge in the area.
•Reduces Budget Deficits: In the PPP approach, the private
companies determine the cost and performs the capital
budgeting to avoid any shortage of funds in future.
•Ensures Efficient Government investment: Since P3
initially let the private companies invest their funds in the
infrastructure projects, the government can utilize its capital for
socio-economic welfare.

11. DISADVANTAGES OF PUBLIC PRIVATE
PARTNERSHIP
 Involves Risk for Private Firms: The public-private
partnership provides for the transfer of risk to the private
entities, overburdening them with the responsibility of failure.
 Raise Government Expenses: Due to the project’s high-risk
involvement, the companies usually demand huge
compensation, leading to a hike in government expenses.
 May Not be Cost-Efficient: At times, the government lacks
sufficient knowledge of the project cost. When the private
company holds the complete cost information; the public sector
may be misled.
 Dependency on Private Sector: The most significant
limitation of the PPP approach is that the government majorly
relies on the private sector for project undertaking and
accomplishment.

12. PUBLIC PRIVATE PROCESS

13. Planning: The government initiates the basic plan of the bridge and select a suitable
private company providing the best offer to undertake the project.
Financing: Now, comes the role of the private entity. It first analyzes the whole life
costing of the bridge and accordingly finances the project. This cost can be recovered
from the government later on.
Designing: The experts and engineers then draft the final layout of the bridge, and
both the parties give their input for the purpose. Also, a time frame is ascertained for
project accomplishment through the Critical Path Method.
Building: The company engages an experienced contractor and the labourers to
construct the bridge. The project completes efficiently within the estimated duration.
Operating: After the proper testing and quality check, the bridge is opened for the
public to use. Thus, facilitating the connectivity and conveyance for the natives.
Maintaining: As estimated in the whole life costing, after five years of use, the
bridge requires some repairing. Such maintenance cost is also borne by the private
company which has undertaken the project.

14. CONCLUSION
 Collaboration is inevitable when it comes to
substantial infrastructure projects requiring high
investment and expertise.
 Therefore, the government prefers to take the
assistance of professionals in the field. Here,
comes the role of private companies for the
accomplishment of such projects.