PPP implementation throughout the world: A general selection/implemetation scheme

Endemic budgetary constraints have led governments in several developing and developed countries to seek new ways to finance the ever-increasing need of new infrastructure networks. A solution is for the public to partner with private investors and to use private sector finance and expertise to procure public infrastructure systems through the arrangement known as public-private partnership (PPP or P3). The main benefit of private investor involvement in public infrastructure is the proven private sector capacity of meeting the infrastructure service needs while securing the best value for money. However, efficiency gains will depend critically on the right allocation of risks between the private and public sectors. The aim of this study is to present the main typologies of PPP arrangements, their characteristics, new trends, and analyze how they have been adopted throughout the world.The analysis of their main characteristics is centered on the three most important aspects of the PPP transaction: the risk transfer to the private partner, the use of the private financing, and the use of private expertise and management skills. Furthermore, the discussion on the strength and weakness of the PPP procurement in some countries in the world sketches a theoretical framework in the implementation of PPP/PFI, which could be very useful for both who wants to improve the models currently used and who approaches PPP for the first time.