What is public-private partnership?
Public-private partnership (PPP) is a set of types of medium and long term collaboration between a public sector authority and a private party aimed at fulfilling socially significant tasks on mutually beneficial terms. Specialists have different understanding of what forms of collaboration can be classified as PPP. The broad interpretation of the terms suggests that PPP is a constructive collaboration between government and business not only in economics, but in politics, culture, science etc. The basic features of PPP in its narrow (economic) interpretation are the following:
- The parties involved in PPP are the government and the private business;
- Collaboration is regulated on the official legal basis;
- All the parties concerned have equal rights;
- PPP has clearly expressed public and social orientation;
- Resources and contributions of all the parties involved in PPP are consolidated;
- All financial risks and expenses as well as gains are distributed among the parties in proportions set in advance.
As a rule, PPP suggests that the government does not join business projects but on the contrary, it invites private business to take part in realization of socially significant projects.