Public-private partnerships are needed to structure the collaboration between a government agency and a private-sector company so it can be used to finance, build, and operate projects. The projects are in the areas of public transportation networks, government refinancing, public and private universities and pre-DIP and DIP. Our involvement in structuring the financing of a project through a public-private partnership can allow a project to be completed sooner or make it a possibility in the first place.
Normally we will structure a public-private partnership with a contract period of 25 to 30 years or longer. The financing is aggregated where the private sector provides the capital but requires payments from the public sector and/or users over the project’s lifetime. The private partner participates in designing, completing, implementing, and funding the project, while the public partner focuses on defining and monitoring compliance with the objectives. Risks are distributed between the public and private partners according to the ability of each to assess, control, and cope with them.
- Public-private partnerships allow large-scale government projects, normally with projects like roads, bridges, or hospitals, to be completed with private funding.
- These partnerships work well when private sector technology and innovation combine with public sector incentives to complete work on time and within budget.
- Risks for private enterprise include cost overruns, technical defects, and an inability to meet quality standards, while for public partners, agreed-upon usage fees may not be supported by demand—for example, for a toll road or a bridge.