PPP Public Private Partnerships or PPP is a means for a Government to provide services to its people by partnering with a Private

entity in order to make a particular project more feasible. It is a contractual agreement between the Government and the Private sector that paves the way for the delivery of public infrastructure and/or public services.1 The partnership between the Government and a Private entity usually involves the latter in financing, designing, implementing, and operating infrastructure facilities and services.2 In other words, a PPP is a contract wherein Private entities would lend its hand to the Government and in return the former will receive from the latter some form of compensation either monetarily, or some form of government incentive. Value of PPP Through this scheme, the Government is able to encourage Private entities, which may have the money and technical expertise that the Government does not possess, to invest and help in the countrys campaign to serve its people. According to the Philippine Institute for Development Studies there are three key reasons why Governments resort to PPP. These reasons are: 1. It has been effective in assisting governments to respond to the increasing demand for infrastructure-related services 2. PPPs can help government to free up resources that could otherwise be used for an infrastructure project by shifting the burden of capital spending to the private sector 3. PPPs contribute to a more efficient delivery of service. Kinds of PPP3 1. Serivce Contract The Government hires a private entity to undertake and perform public services for a period. The Government only contracts out some parts of the operations to the private entity it hired. It, however, remains as the primary provider of the service. 2. Management Contract Like the service contract, the Government remains as the primary provider of the service. The only difference is that in a management contract, the daily management control and authority is assigned to the private entity.

Public-Private Partnership (2012, March). In Philippine Institute for Development Studies. Retrieved July 20, 2013, 1:00PM (Philippine Time) from http://dirp4.pids.gov.ph/ris/eid/pidseid1201_rev. pdf 2 PPP in Haryana (n.d.). In Public Private Partnerships. Retrieved July 20, 2013, 1:00PM (Philippine Time) from http://www.pppinharyana.gov.in/PPPinHaryana_WhatIsPPP.htm 3 Supra Note 1

3. Lease Contract In this type of PPP the private entity becomes responsible for the service in its entirety and undertakes obligations relating to quality and service standards. The Government in this kind of PPP is only responsible for new and replacement investments. 4. Concessions The private sector in this kind of PPP is responsible for the full delivery of services. It includes operation, maintenance, collection, management and construction and rehabilitation of the system. The private sector is also responsible for all capital investments and for providing assets. However, despite being responsible for providing assets, such assets are still publicly owned even during the concession period. The Governments role in this kind of scenario is merely regulating the price and quality of service 5. BOT These are specialized concession. The private entity finances and develops a new infrastructure project according to the performance standards set by the government. The private entity provides the capital required to build and operate a new facility. And after the stated period in the contract lapse, the private entity will return the facility to the Government.