What is –

– Public Private Partnerships and what are the advantages
Public Private Partnership is a certain kind of relationship between the state and the private sector. As a rule, these relations in the future are either mid-term or long-term ones.

Partnership implies –

– Not only the distribution of risks and profits, but also the use of specialists and resources of state and private sectors to achieve the objectives corresponding to the interests of the state.

Application of the scheme of –

– Public Private Partnership helps improve the efficiency of correct budget implementation, ensure a more accurate realization of the project, as well as the implementation of an increasing number of projects for a certain period.

Used when –

– The scheme of the public private partnership greatly improves the quality of the services offered, gives the possibility of transferring some of the risks to the private sector and, most importantly, ensures more efficient use of resources.

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The Advantages for the state sector

  • Provision of positive dynamics of growth in the socio – economic environment, as well as obtaining additional funds to the state budget
  • Construction of objects with the help of attraction of state capital
  • Ability to transfer part of the risks to the private investors for adequate remuneration
  • A reduction of cash payments and financial relations with the private sector in case of their non-compliance on the quality of work performed
  • Ability to use the involved managerial and intellectual capital from the private sector for project management
  • The possibility of reducing the additional costs to operate the facility

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The Advantages for the private sector

  • Getting the help of the state to realize the project in administrative or political context.
  • Share of the risks involved with the state.

The possibility for the private sector to obtain the necessary guarantees for the work from the state, such as:

  • Partial or full refund of investor funds in the event of an unsuccessful project
  • Return on investment in the form of the right to receive income from the operation of the facility
  • Ensure a minimum income
  • The cost of the project on the basis of a predetermined proportion
  • Retention of the possibility of strategic control by the private sector through a special project company.