Public Private Partnership (PPP)

Public Private Partnership means partnership between public sector and private sector in financing, designing and developing infrastructural facilities. In a PPP, the private sector may contribute money, expertise and technical know-how. Infrastructures like power, transport, education, healthcare, waste management, etc are maintained through PPPs.

Features of Public Private Partnership

  1. PPP projects are for the benefit of public.

  2. Government remains actively involved throughout the life of a PPP project.

  3. PPPs are mainly used in government projects of higher priority.

  4. In a PPP project, the funds, expertise and experience of both the private and public sectors are combined.

  5. In a PPP project, the degree of responsibility and the level of risk are shared between private and public sector.

Merits of Public Private Partnership

  1. PPPs approach helps in faster implementation of projects.

  2. It helps in higher quality services as there is a combined expertise of public and private sector.

  3. It helps to reduce costs due to efficient management practices.

  4. In PPPs the risk is divided between the government and the private sector.

  5. In PPPs, the funds are invested both by the public and the private sector. So government is relieved of the botheration to borrow money.

  6. The government is accountable for the cost and quality of public services.

Demerits of Public Private Partnership

  1. Private sector aims at profit maximisation, but such an approach may not be desirable for public works.

  2. There is possibility of leakage of important secrets of the country.

  3. Sometimes there may be delays in the completion of crucial projects because of the conflicts between the government and the private firm.